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Monday, October 15, 2012

An Introduction to Short Selling

The simplest explanation of short selling is that it is opposite to going long. When going long you buy a financial instrument like stock or currency pair, wait for appreciation in price and then sell the instrument for a profit. In short selling you sell the instrument first, wait for a depreciation of price and then buy the instrument to make a profit. The strategy is a little more complex as it requires burrowing of the instrument before you can sell it. The burrowing is usually done from a broker who charges an interest margin for it.

Many markets and nations have restrictions on short-selling. Many believe that unregulated short selling can cause adverse effects on market. The speculation is a collective effort of short sellers can create a negative sentiment in market and can cause price decrease. Shorting can create adverse effects when there is a market crisis or when followed by spreading false rumors and when traders are doing naked short selling - selling the instrument without actually burrowing that.

There are no short selling restrictions on online forex trading or online CFD trading. The fact that it is not controlled by any nation or market allows traders to easily go long or short at any time they want. Actually in global forex market the price changes show high correlation and offer good chances of short selling.

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Tuesday, October 9, 2012

Benefits of Simulated Forex Trading Qatar

Simulated or demo trading is the practice using easy-to-use programs or sometime real trading software systems for imitate actual stock, CFD or forex market trading. Most of these online simulated trading software systems try to match real-market scenarios. There are many benefits of starting your trading career through a simulated trading program.
  • You can know how the market works. You will get a chance to monitor price changes, buy, sell, place a range of orders and to know the executions. Some advanced simulators also charge broker fees, commissions and margin costs if applicable.
  • Its far better than learning from papers and books. Simulated trading experience can cover lot more things in quick time than any forex trading tutorial. You are trading in almost real-market conditions, so you can experience almost all market forces.
  • Learning of indicators and terminologies. And you can realize that how changes in indicator values, news and opinions can cause price changes.
  • Testing your strategies. Everyone is expected to have some pre-determined strategies for trading currencies. Simulated forex trading an perfect platform for test these strategies, to evaluate the results and to make custom changes.
  • Know forex trading risks. The fact that you start trading with a fixed amount of money, profits and losses can give you a clear idea about different market forces and the risks involved in trading.

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