Trade12 - Reasons Why Forex Traders Lose Money

Reasons Why Forex Traders Lose Money

Most forex traders end up troubled, it is said that 96 percent of them lose their money. Some traders do better than that, while it takes time for new traders to familiarize all trading things. Here are a few reasons of why forex traders lost money.

  • Start with small capital

Most forex traders are searching for an alternative way to get out of debt, or to generate easy money. It is normal for a broker to encourage an investor to trade large lot sizes, including high leverage in order to see bigger results with just a small amount of investment. However, starting with smaller amount might lead to worst times possible.

Thus, inexperienced investors in forex trading should not engage with small amount of capital. Start with $1000 for smaller trades, if not, you’re just putting yourself in trouble.

  • Mismanage of risk

With poor risk management even if you got skills and knowledge, all your money could be wiped out. Your job in forex trading is to secure what you have, and not to make profit. Simply because if your capital is worn-out, your ability to make profit will vanished.

Hence, learn to use your stops, and move them as soon as you reached a reasonable profit. In lot sizes, use a realistic one that your capital account. Most of all, get out if the trade is no longer making any sense.

Read about the need for proper risk control in forex trading.

Trade12 - Why Forex Traders Lose Money

  • Being greedy

Forex traders are being greedy as they feel like squeezing every last pip. They’re doing it before a currency pair turns and thought of throwing away the profitable trade. Remember, there is money to be made every day.

Therefore, do not practice being greedy. There’s nothing wrong to execute reasonable profit as long as you got more pips to go. The movement of currency changes every day, so there’s no need to chase for that last pip.

  • Indecisive Trading

Finding yourself in an uncertain decision makes you think of picking a wrong direction. For instance, you’ve opened a trade and it did not profit immediately, you start to close your trade and later realized that the market go back in the initial direction you just

You must choose a direction and stick with it. Switching back and forth will just surely wiped your account at a time.

  • Picking turning points

Inexperienced traders are normally undecided in picking turning points. A trade is placed on a pair, and while it keeps going in the opposite direction, they add to their position predicting that it will go in the right direction this time. If you continue this way, there’s a higher chance your trade will turn negative.

To avoid this, you must trade with the trend. If you think the trend will change and you witnessed an opportunity for new direction, wait for a definite trend change.

Learn more about the underlying principle of trend trading.

 

You can earn bigger profits and execute better trades here at Trade12 by reading the latest market updates. Striving to become the best forex broker for you, Trade12 reviews daily market events essential to your trading activities to help you improve your overall trading performance. Register an account now and enjoy a wonderful trading experience!

Cryptocurrencies: Pros and Cons

Investing in cryptocurrencies is definitely a gamble. We have just listed some cryptocurrency pros and cons.

Investing in cryptocurrency ICOs may be a huge gamble, so you need to know its pros and cons.

Investing in cryptocurrency ICOs may be a huge gamble, so you need to know its pros and cons.

Just like other kinds of investments, they can give you huge returns. But they also come with great volatility and risk. Nonetheless, it is an investment you wouldn’t want to ignore.

In other words, if you plan to invest on cryptocurrencies, you should be armed. You should know the basics, and you should know the pros and cons of your investment.

In this article, we have listed some of the pros and cons of diving into cryptocurrencies. Read on!

Trade12 review blog - cryptocurrencies have their cons that many investors value.

Cryptocurrencies have their pros that many investors value.

Let’s start with the Pros of CryptocurrencIES.

Number 1: Huge Potential for Returns

According to data, the $1000 invested in Bitcoin in 2013 would be worth over $400,000 today. Sounds good enough?

That figure has convinced many investors consider investing in cryptocurrency. Should you be one of them?

In a short span of time, ICOs have given large returns. Stratis was able to raise $600,000 in their June 2016 ICO. The price has risen 63,000 percent.

Spectrecoin raised $15,000 last January. They have witnessed a whopping 13,000 percent rise.

Number 2: Increased Liquidity

If you purchase equity in a startup, you need someone to buy it from you. Or you can wait for an acquisition or an IPO (initial public offering). That is, if you want to realize your profit.

In simple words, if an ICO (initial coin offering) can build a solid network, you as an investor have much more liquidity. Plus, you can sell the cryptocurrency for dollars almost right away.

Number 3: Clear Direction

Comparing startups with cryptocurrency ICOs, we find out that startups need overcome initial headwinds. As a result, they usually have to pivot many times.

You also expect that the startup will be vastly different from when it was founded.

With cryptocurrency ICO, upon investing, you know exactly what they do. You also know what they will do. And because of this, you can accurately and efficiently evaluate the product.

In the end, you can use that insight in determining your investment.

Cryptocurrency has its cons that many investors worry about.

Cryptocurrency has its cons that many investors worry about.

Now, let’s proceed to Cryptocurrency Cons.

Number 1: It is much more volatile

This is a big downside. Compared to the stock market or real estate, cryptocurrencies are much, much more volatile.

There have been different issues surrounding it. There were hacking incidents, and these caused investors to lose ALL their investments in a snap.

Moreover, even if these incidents are quite rare, they’re not actually unheard of. None a few have heard of massive drops in ICO values.

Number 2: Network Stall

The key to a successful cryptocurrency lies in its ability to offer a useful product. The product should attract a substantial number of users.

The danger, then, arises when it fails to attract users. Worse, users may never use the platform. Unsurprisingly, these things will inevitably result to a drop in price.

Due to lack of network engagement, many recent ICOs failed to perform after launching.

Number 3: Possible Mismanagement

If you come to think of it, a cryptocurrency is basically a startup. It is a business, and it has founders running it.

Cryptocurrency needs a solid founding team if it aims to move out of ICO phase. It needs efficient management if it aims to reach mass-market levels.

This should tell you to be careful. Look into the team’s background, and check everything. Evaluate their skill sets, and consider carefully. Check whether they actually and effectively execute the project.

Now that you know the Pros and Cons:

You must be up to date with the options you have. Technology changes and it is never static. Cryptocurrency is technology. Therefore, you need to follow it closely.

With tons of possibilities piling up daily, you must keep up more vigorously.

Additionally, you must remember that though portfolios should be balanced, you also need riskier assets. That’s what makes an ideal portfolio. In this time and age, ICOs sport numerous benefits that venture capital lacks.

Start thinking about ICOs. Start thinking about investing in them. Check what ICOs are currently available, and know how you can use them to generate tremendous returns for you.

You can earn bigger profits and execute better trades here at Trade12 by reading the latest market updates. Striving to become the best forex broker for you, Trade12 reviews daily market events essential to your trading activities to help you improve your overall trading performance. Register an account now and enjoy a wonderful trading experience!

Trade12 - tips for part-time forex traders

Tips for Part-Time Forex Traders

Not all market traders get involve full time, and of course, thanks to the advancement of technology, clients do not have to be a full-time trader to have access to the markets.

There are various part-time traders, including professionals, old retirees, and even students at legal age. Basically anyone who has to allocate most of their time on full time jobs or other things but still want to be a part of the market.

However, it is somehow difficult to trade part-time, as there are many obstacles to overcome before profiting consistently. But worry not, here are some strategies to help you and make your part-time trading effective:

SET YOUR PRIORITIES

As indicated above, part-time traders can be the ones who give most of their time to their full-time jobs, which is merely the main source of their income. Hence, compromising the quality of forex trading is not advisable. Setting your priorities applies to all, and it does not matter how long you have been trading. It may be for months or years, but setting your priorities straight is helpful to all. However, there is a catch for part-time traders: you have to keep the game extra tight. Since you are not available all the time, it is best to keep yourself disciplined and prepared when trading.

FOREX TRADING METHOD SHOULD VARY ON YOUR SCHEDULE

You might only have an hour or 2 to give time in trading every day, and in this case, it could limit your options. But there is a solution for that since you can trade during sessions that have low volatility. There is a strategy like scalping or switching to longer-term swing and position plays. Check your schedule and figure out your trading style from there.

Read more about the difference between Scalping and Swing Trading.

MAXIMIZE YOUR TRADING TIME

Managing your time wisely is essential when you are a part time trader. You only get little time with your trading so make the most out of it. Setting a routine when trading is also important. It does not only mean actual trading where you buy and sell. It should also include core tasks like journal recording, chart reviews or back testing. Whenever the market is moving slow, you cannot just stare at your charts and slouch around. Take that extra time as an opportunity for skill building in core trading tasks.

WISE MINDSET IS ESSENTIAL

It is impossible for a person to watch the charts 24/7 without a blinking eye. Keep in mind that it is okay to miss the huge moves as long as you are patient for a setup to materialize. Do not worry; pips are just always around the corner.

JOIN FORUMS

There are hundreds of discussion boards you can join in and you ensuring you, you are not alone in any trading situations. There are thousands of full-time and part-time traders in online forums where you can also learn from their experience. Socializing with these people can help and advise you with your trading.

TAKE IT SERIOUSLY

Even if it is only for part-time, trading can be very risky. You are investing your money, and even if you have lots to spare, stick to the idea of making profit, but it can also be a rainy day sometimes. It’s not even only the money you’re investing, but also your time. Invest to grow, take time to learn and make the most out of it. Maybe you are not aiming to be a professional trader, but it takes perseverance to see results.

Striving to trade with the best forex broker, have our exemplary brokers to guide you and be regularly informed with current market affairs.

What is forex though? Find out at Trade12 and be a part of our company’s growing excellence!

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 review to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

*Note that this article has been contributed for another blog website, but was originally written by Trade12.

Trade12 - Building the Ideal Investment Portfolio

Building the Ideal Investment Portfolio

Investing isn’t as simple as blindly picking any stocks at your liking. It involves careful decision making, thorough analysis, and complete understanding on the risk and reward of investing. The key to making a profitable investment is to invest in a well-maintained portfolio. In line with this, asset allocation plays a very big role. It needs to conform to the investor’s risk tolerance, financial capacity, age, and goals. In order to systematically allocate assets in your investment portfolio, every investor must follow these steps:

Step 1: Determine your asset allocation

Investing doesn’t mean simply throwing all your money on stocks. There are different types of securities you can choose from, and the ideal portfolio will usually include several asset classes. Determining which asset class to invest in is entirely up to you, but make sure that you at least invest in a mixture of stocks and bonds.

Determining your asset allocation depends on several factors: your age, time horizon, financial capacity, and risk tolerance. For example, using your age to figure your assets would be:

110 – your age = the percentage of your assets that should be composed of stocks

Following the computation above, if you are at the age of 35, you would need to put 75% of your portfolio in stocks. This is also the percentage of risk that you should expose. Bonds are more of a low-risk investment, so the remaining 25% is left in good hands. Just remember that despite the high risk of stocks, they also usually end up with high rewards.

Trade12 - Determine Your Asset Allocation

Step 2: Diversify your assets

Now that you know the proper asset allocation for your age, it’s time to choose your investments. Avoid investing mostly on stocks from a single industry. Stocks are very risky investments, so the key here is to practice portfolio diversification. Try investing in a broad range of asset classes. A good tip is not to invest only on local stocks, but to international stocks as well.

Step 3: Add some index funds

To add more security for your portfolio, add in some index funds to your assets. An index fund is a pool of assets that is designed to replicate the performance of a particular market index. It provides instant diversification while paying for lower fees. Aside from these, they also guarantee higher returns over the long term.

Step 4: Rebalance annually

Once you’ve created your portfolio, it’s time to forget about it. Yes, you don’t need to check on your assets every hour. The rule of thumb is to invest for the long term to make the most out of the market. The only thing you need to do is rebalance your portfolio annually. You could sell some assets or buy some in order for it to match your original asset allocation.

Trade12 - Rebalance Annually

Step 5: Adjust your portfolio as you age

As you approach retirement age, you should adjust your portfolio to less-risky investments. The nearer you are to retirement, the more secure you should be on your investments. This is to ensure that you would have enough money once you retire. However, if you think that your investments would not generate enough money for you by the time you retire, you might as well fix it early or simply postpone your retirement until such time that you save enough.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - How to Conquer Your Investment Fear

How to Conquer Your Investment Fear

For anyone who has been in investing for so long, you may have seen all the different sides of the market. Currently, it is on its all-time highs. A trend that is this positive make speculators warn investors to prepare for a very devastating crash. We all know how these crashes had wreaked havoc in the past. Thus, it is normal for investors to develop market fears. But what are these market fears? How do we overcome them so as not to let them hinder us from the true potential of investing? Find out more about how to conquer investment fear as we go along this article.

Trade12 - How Did You Develop Market Fears

How did you develop Investment fear?

Fear is one of the five common emotions that go against you in trading. Before we talk about how to conquer it, let us first get to know how investment fear is developed. Investors who had bad experiences in the past usually develop a trauma that limits their investment potential. Most of those who are afraid to invest, develop market fears stemming from the fear of losing money or the fear of running into unforeseen risks. Lastly, those who are just planning to invest usually develop investment fear by not knowing where to start.

All of these are forms of investment fears. All of these are valid fears that stem from valid reasons. Running away from the cause of our fears is the common way of survival. But considering how huge the potential returns of the market, not investing would probably be the worst outcome of these fears. These fears make investors ignore logic, resulting to missed opportunities. Thus, we have to conquer them in order to fully maximize the potential of investing.

Trade12 - How Do You Conquer These Fears

How do you conquer these fears?

Accept the truth – There will always be risk involved in the market. There is nothing we can do to eliminate it. Instead, follow the steps below in order to hedge against it. Do not let your fear stop you from investing. The truth is investing in the market is the best way to grow your money over time. The only way that you would run into risk is when you start investing with no preparation at all. That’s when all your market fears come true.

Develop an action plan – There is no better way to gain the upper hand in the market than investing with enough preparation. You wouldn’t go to war without a plan, because that’s a great way to ensure a loss. Before you even start investing, educate yourself. Overcome your fears by knowing your enemy. Create a step by step plan which you would follow later on. That plan would be your road map to wherever your goal is.

Read more about the importance of a trading plan.

Be consistent – Now that you have a plan, be consistent with it and follow it slowly, but surely. You don’t have to go through the process quickly, build your pace and start from there. Becoming a systematic investor with a solid plan would help you overcome your fear of investing. Start by educating yourself and invest from there. A lot of instances would try to waver you from your plan, but the key here is to be disciplined and hold on to what you initially started.

Trade12 - How to Hedge Against The Risk of Losing Money

How to hedge the risk of losing money?

Start small – Do not go all-in when investing. Instead of simply throwing all your money in the market at once, start with whatever you are comfortable with and build from there. That way, you can start developing your strategy without risking too much if it doesn’t work out. Also make sure that you only invest what you can afford to lose. Set aside emergency funds and some cash enough to pay for your bills. Invest only the money that you aren’t planning to spend anytime soon.

Dollar Cost Averaging – The market undergo through some ups and downs. There is no assurance when is the right time to enter and exit the market. To take advantage of this behavior of the market, try investing through DCA or Dollar Cost Averaging. With this strategy, you can start with a small amount, and then automatically invest the same amount at regular intervals. Starting with any small amount could end up with a significantly huge amount after some time, while eliminating the various emotions you usually experience in investing.

Diversify your portfolio – Avoid investing heavily on a single asset. Diversify your portfolio by investing in various securities, or opt to invest on funds to get instant diversification. This way, if the market turns down one of your assets, it won’t have as much impact to your portfolio compared to focusing only on one investment.

Go long – The best way to lessen the risk in the market is by being a long-term investor. Not only would you be able to control the amount of returns that you’re already satisfied with, but you can also ride out most of the ups and downs of the market. Historically speaking, most investors had more benefit when investing over the long run.

Ignore your investments – Now that you are planning to stay invested for a long time, there is no reason to check your investments every minute since you are not planning to exit anytime soon. Lessen your anxiousness by letting your investments grow by themselves. Still, take time to rebalance your portfolio every now and then, but avoid making rash decisions over temporary market adjustments.

Read more about hedging techniques to lower your investment risks.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - Timing the Market Right Buy Low and Sell High Strategy

Timing the Market Right: Buy Low and Sell High Strategy

If you’re an investor who continuously looks for profitable strategies, you have most definitely heard of the advice buy low sell high. For years, this had been the mantra in market investing. But do you know what this really means and how to implement it in your trades? In this article, we are going to expound on the real way of buying low and selling high strategy.

Trade12 - The Buy Low and Sell High Strategy

The buy low sell high strategy

Without further explanation, we can get the main idea of this strategy just by looking at its name. It generally means to buy assets or enter the market when their value is low, and then selling them or exiting the trade when their value is high. However, there is a huge problem that hinders investors from fully executing this strategy. How would you know the right time of when to buy and when to sell?

Basing this strategy solely on the current price is not enough. You can’t just look at the charts and be able to recognize stocks that could be invested using this strategy. It is still important to do your research and make sure that the stocks you are looking at have the potential to make a reversal.

Buying low is basically following the principles of value investing. It involves investing in stocks that are sold at a discounted price. It doesn’t mean simply investing in cheap stocks because not all that are valued at a low price have the capacity to rise in value.

Selling high doesn’t necessarily mean trying to reach the peak of a trend. Nobody knows how far the market will reach or when it would set for a market correction. Trying to find the highest peak could just result to regret later on. Targeting a certain percentage increase in comparison to the initial value of which you entered the market could be more realistic.

Trade12 - How Hard is it to Implement

How hard is it to implement?

Seemingly, this strategy is very simple to follow. However, market fear is stopping investors from fully venturing the potential of the market. Most investors tend to follow the herd. In order to maximize the buy low sell high strategy, it is important to take lead and do not be afraid to expose yourself to certain risks. Do not just copy what others are doing. Discover the hidden gems in the market and then let the others follow suit.

Read more about the 5 emotions that go against trading.

There are also times that the trend enters a market bubble, which often drive prices to extremes. This usually results to market panics. During these times, following the buy low sell high strategy could be very beneficial. Take advantage of the extremely volatile trend to maximize your potential profits.

Bearish or bullish trends, on the other hand, tend to punish those who are looking for a good entry and exit points using the buy low sell high strategy. During these times, do not be afraid to hold on to your stocks, because as history has shown us, the market tends to ride the trend in all directions over time. Avoid making rash decisions because of fear and stick to what you initially planned. Just remember to prepare your stop loss in order to hedge your investments from declining too far.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - Can A Beginner Make Money in Forex Trading

Learn Hоw Tо Trаdе Fоrеx: Cаn A Beginner Make Mоnеу In Forex Trаding?

Contrary tо whаt еvеrу Fоrеx ‘еxреrt’ оut there wоuld have уоu believe, it’ѕ not easy tо lеаrn how tо trade Fоrеx аt аll. Trаding Forex iѕ оnе of the mоѕt сhаllеnging ѕkillѕ уоu саn ever ѕеt оut to learn, whiсh is еѕресiаllу daunting if you’re a bеginnеr juѕt ѕtаrting оut tо lеаrn hоw tо trade Fоrеx. If уоu’rе finding it hаrd tо lеаrn hоw to trade Fоrеx ѕuссеѕѕfullу right nоw, уоu’rе probably wоndеring: “Cаn a beginner make mоnеу in Forex trading?” By thе еnd of this article, уоu’ll knоw whаt уоu can dо tо mаkе mоnеу in Fоrеx trаding right now.

Can A Bеginnеr Make Mоnеу In Fоrеx Trading?

If you hаvе a lооk around thе mаnу Forex websites, fоrumѕ, seminars and magazines, it ѕееmѕ likе еvеrуоnе’ѕ mаking milliоnѕ оf dollars trаding Forex! Thе thing iѕ, Fоrеx trаdеrѕ love to tаlk аbоut thеir winning trаdеѕ аnd mаkе thеmѕеlvеѕ out to bе wildlу рrоfitаblе trаdеrѕ, but the rеаlitу is that оnlу 5% of Forex trаdеrѕ аrе соnѕiѕtеntlу mаking money. Yes, еvеn a bеginnеr саn mаkе money in Forex trаding, but thеrе’ѕ a big diffеrеnсе bеtwееn mаking mоnеу in Forex and making a full timе inсоmе, achieving finаnсiаl frееdоm, and building wеаlth thrоugh Forex.

What Stops Bеginnеrѕ From Mаking An Inсоmе

Sо what’s ѕtоррing beginners from making a consistent, lоng term inсоmе frоm trаding Fоrеx? Well, unlike thе рrоfеѕѕiоnаl Fоrеx trаdеrѕ working for thе big banks and hеdgе fundѕ, most bеginnеr trаdеrѕ lеаrning tо trade Fоrеx aren’t раid a full timе ѕаlаrу tо immerse thеmѕеlvеѕ in thе markets. If уоu’rе juѕt starting оut in Fоrеx, thеn уоu’vе рrоbаblу got a full timе jоb thаt уоu ѕреnd аt lеаѕt 8 hоurѕ a dау оn, аnd a family and social lifе оutѕidе оf thаt. Thаt mеаnѕ thаt you have a very rеаl ѕhоrtаgе of time tо get yourself tо thе lеvеl whеrе you саn trade like a рrо, and bеliеvе mе, it tаkеѕ a lоt оf timе and соnѕiѕtеnt еffоrt.

It tаkеѕ уеаrѕ of ѕtudу, рrасtiсе and rеаl еxреriеnсе in the mаrkеtѕ tо learn hоw tо trаdе Fоrеx ѕuссеѕѕfullу, аnd gеt tо the lеvеl where уоu can соnѕiѕtеntlу make mоnеу in Fоrеx trading. Nоt to mеntiоn thаt you’ll be tаking оn, for аll intеntѕ аnd purposes, аn unpaid раrt timе job thаt will сhаin уоu to уоur computer while уоu are trаding. It’ѕ something thаt will аliеnаtе уоu frоm уоur social circle, аnd put соnѕidеrаblе ѕtrаin оn your fаmilу rеlаtiоnѕhiрѕ as wеll. It’ѕ no wonder that mоѕt traders wаnting tо lеаrn hоw to trаdе Forex will givе up within 3 mоnthѕ, аnd nеvеr mаkе mоnеу in Fоrеx trаding.

Trade12 - What You Can Do to Make Money in Forex Trading Now

Whаt Yоu Cаn Dо Tо Mаkе Money In Fоrеx Trаding Nоw

So whаt can уоu do to mаkе money in Fоrеx trading right now? Prоfitаblе trading ѕуѕtеmѕ аrе rare, аnd уоu need to choose vеrу саrеfullу. Thаt said, if you can find a trаding system thаt wоrkѕ, you саn оvеrсоmе the biggеѕt challenges any trаdеr faces while they learn hоw tо trade Forex. Yоu’ll be аblе tо gаin vаluаblе Forex market еxреriеnсе, рrеѕеrvе уоur реrѕоnаl rеlаtiоnѕhiрѕ аnd mоѕt imроrtаntlу mаkе mоnеу in Fоrеx trаding whilе уоu learn hоw to trаdе Forex.

When you’ve built up the сарitаl аnd income оf уоur Forex ѕуѕtеmѕ ореrаtiоn, аnd have gathered up vаluаblе trading experience, уоu may dесidе tо trу оut trаding Forex for уоurѕеlf. Rеgаrdlеѕѕ оf whether you trade with аn automatic Fоrеx ѕуѕtеm in thе ѕhоrt, medium оr long tеrm, it’ѕ a роwеrful ѕоlutiоn thаt will enable уоu tо mаkе mоnеу in Fоrеx trаding еvеn if уоu’rе a bеginnеr.

Read more about what is forex and you should know about it.

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Trade12 - 5 Tips That Could Help You Analyze Earnings Reports Easier

5 Tips That Could Help You Analyze Earnings Reports Easier

One very important step in trading and investing is analyzing your prospective assets to ensure that they are profitable. For stocks, complete knowledge about the company offers a huge advantage, which is why it is not new that investors should learn how to understand earnings reports. In this article, we are going to talk about some tips that could help you analyze earnings reports easier.

Trade12 - What is an Earnings Report

What is an earnings report?

An earnings report is an official public report filed by companies that contain their profitability for a certain period of time. Earnings reports typically include information such as net sales, net income, earnings per share, etc. It is usually filed quarterly during earnings season, following the estimate of earnings issued by equity analysts.

Earnings reports act as a way to gauge the financial health of a company. A skill in understanding earnings reports is a must for investors to determine which companies are good enough for investments.

Trade12 - Tips That Could Help You Analyze Earnings Reports Easier

5 tips to that could help you analyze earnings reports easier

The most part of earnings reports compose of numerical data. Of course, not all people would want to stare at several pages full of numbers. Here are some great tips that could help you in order to analyze earnings reports easier:

Compare the results to historical data – Before anything else, you would need to compare the current results to the previous one. Determining which past results to compare with would depend on the kind of company you are looking at. Companies expected to have continuous growth all year round should be compared to the results of the previous quarter. Seasonal companies or those that have a certain strong month in a year, on the other hand, should be compared to the same quarter results of the previous year. Using this data, determine if the overall earnings had increased or decreased.

Compare the results to the expectations – Prior to the quarterly earnings reports, most companies would release an estimate expectation of the earnings that has been issued by analysts. Use this data to compare with the current results. Find out if the expected results were met and determine the reasons if they were not.

Check the factors that affected the results – Not all results are positive. Before making a final decision just because of numerical data, find out the factors that contributed to it. Some experience downturns on earnings reports are caused by temporary changes in the company and are expected to revert back to normal.

Look for other sources of information – Do not just focus on the information laid in front of you. If the company fell back this quarter, look for other information regarding the plans of the company. Some earnings may have fallen due to expenses on a new project that would be launching on the upcoming quarter. Disregarding that information can cause you to neglect a great opportunity in the future. It is likely that a representative from the company can give you guidance on these kinds of information.

Maintain a log of the company’s performance – To make your job simpler, keep notes on how the company is performing. You don’t need to keep a very formal log, just enough for you to understand it. That way, you can just look at your notes when you check the results for the next quarter without having to go through previous sets of earnings reports.

Conclusion

No matter how hard and time consuming it may seem to regularly read earnings reports, the knowledge you will gain can give you a huge advantage over those who simply trade blindly. Make use of this knowledge to help you in major decision making.  Make it a habit to trade in a strategic way. Do not just listen to what others say about the market and make sure to do your own research to avoid bias and manipulated information.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - 10 Crucial Points When Evaluating an Investment Opportunity

10 Crucial Points When Evaluating an Investment Opportunity

In the world of investing, opportunities come and go. It is a good practice to diversify, but it doesn’t mean simply investing in assets of different classes. The key to becoming a successful investor is by knowing how to recognize a great investment opportunity through accurate analysis. In this article, we would be focusing on 10 crucial points that an investor needs to consider when evaluating investment opportunities.

Trade12 - Crucial Points When Evaluating an Investment Opportunity

Crucial Points When Evaluating an Investment Opportunity

Security vs Growth – Decide whether you would prefer security over growth or vice versa. Usually, secured investments could offer less capital growth, while growth investments have a higher risk level involved than that of a secured investment. From there, you can start looking for an investment opportunity for your chosen kind of investment.

Market – Before starting an investment, make sure that the market you are entering has potential for growth. Analyze the current demands of the said market and make sure that the industry for your prospect asset is currently flourishing.

Opportunity window – Ask yourself, “is this the right time to invest?”. The answer may depend on the first key point. It may also pertain to the current price value and market reports regarding the prospect investment. Is it best to invest today? Are you not too late? Or how long would this opportunity window be open for investment? Make sure to identify the answers to all the said questions and determine the best time to enter an investment.

Exit points – Nobody could predict the market. You may try to completely evaluate an investment, but there could always be a chance that things may not go the way you think they will. Always prepare an exit point for unforeseen cases. You would need these exit points in order to mitigate possible losses that come with failed investments.

Returns – All kinds of investments have their corresponding risks. However, make sure to analyze whether the returns that you could potentially get from an investment is adequate relative to the risks it comes with.

Trade12 - Crucial Points When Evaluating an Investment Opportunity continued

Risk – identify the risks that come with your investment. Evaluate your comfort zone and know up to which level you can tolerate. You can also use this data when setting up your stop loss once you enter an investment.

Time value – Some investments result to good potential profits, but with greater risk. Determine if you prefer these profits over secured investments, which could generate fewer profits over time. You can also compare potential returns for a given time range with other investments to see which is best for you.

Growth potential – Analyze if your investment still has potential to grow, and the range up to which it can reach. Consistent growth that comes from marketing strategies and management is generally better than a one-time spike in value because of hype-causing market news that usually returns to normal after a while.

Avoid fraud – In the market, there are a lot of fraudulent headlines that are released to manipulate market prices. Make sure to check from unbiased news sources before you invest. Do not listen easily to news that usually results in an increase in price value. Do your research before making a major investment decision.

Price – Even great investments can result in a loss of money if you pay too much for the deal. Make sure to invest only when the price is reasonable. Fortunately, the market usually goes through a series of ups and downs. You can use this behavior of the market to enter an investment at a discounted price, and selling off at a higher price point.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - Stock Manipulation Through Naked Short Selling

Stock Manipulation through Naked Short Selling

Short selling had been a staple technique for investors who try to hedge against declining markets. It involves borrowing stocks from a broker to sell them at their current price, then buying them back at a lower price. However, there had been cases wherein investors do not actually possess the stocks before shorting them. This technique is called naked short selling, which would be explained in this article.

Trade12 - What is Naked Short Selling

What is naked short selling?

Naked short selling or naked shorting, is the method of short selling a security without borrowing it first from a broker. This method is already banned in most countries, as it results in a failure in delivering the shares paid by buyers. It is also known to have contributed to previous financial crises by forcing stock prices to go down through stock manipulation.

Naked short selling vs. Short selling

The usual short selling method involves borrowing a company’s stock and selling it in speculation that the stock’s value will decline. Once the stock price declines, the short seller buys the same number of stocks at a lower price to cover the original borrowed stocks. The diagram below shows the correct process of short selling.

Trade12 - Naked Short Selling VS Short Selling

On the other hand, naked short selling starts by selling stocks that are neither borrowed, nor ensured the capacity to deliver the stocks being sold. A buyer accepts the trade, but does not receive the stocks agreed upon. When the seller does not obtain the shares within the allotted time frame, it results in what we call a “fail to deliver”. However, the transaction generally remains open until the shares are acquired by the seller or the broker of the seller settles the order. Naked shorting is similar to the process of short selling, minus the part where the broker and short seller interacts.

Effects of naked short selling

Naked short selling can affect the liquidity of the securities involved. If the supply of the security is not readily available for trade, naked shorting could be used. It allows people to participate with the trade without actually possessing the share. There could be an increase in liquidity and demand for an asset with a very limited supply If more investors become interested in the same security.

It is safe to say that naked short selling generally contributes to fake price fluctuations through stock manipulation. It also results to unsettled transactions in the market that causes further problems. This is because both parties need to find a solution to obtain the shares in order to close the trade.

Because of these, numerous countries had banned naked short selling in their markets. It is also believed that the controversial method had contributed to some economic declines in the past years. However, due to various loopholes in trading systems, naked short selling continues to happen despite the strict warning of governing bodies to active investors.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!