Starting a forex business requires various preparations. Forex is a business that involves currencies that have good value in the market. Therefore, traders must be able to determine which currency is good to be an asset. In addition to assets, traders must also be able to perform analysis so that the prediction of the movement of the assets they own can be known before opening a position.

One of the important things to do but tends to be often forgotten by traders is managing finances or what is more commonly referred to as Forex Trading Financial Management. Financial management is very vital in the world of trading. A trader who trades without having good financial management is tantamount to gambling.

Remember, trading is done to do business for profit, not gambling. Gambling will only make a profit if the player is lucky. However, trading profits can be estimated by conducting financial analysis and management.

Financial Management in Forex

Financial management is one of the efforts to protect the account you have. The way financial management works is to protect accounts by managing risk. Before entering into forex trading you must determine what percentage of the maximum asset risk of the assets you have. This is what sometimes makes financial management in forex also called capital management. Capital management is the process of placing capital in the present as well as capital planning for the future.

Over time the process of placing capital management will experience many evolutions and variations. This is where the various types of capital management eventually emerge. Here is some capital management that you can use.

Financial Management in Forex – Martingale Model Model

Martingale is capital management whose probability allows for similarity in value to what has happened before due to the multiplication principle. This method was first popularized by Paul P. Levy in the 18th century which is also one of the betting methods in France.

Martingale is defined as a process to gain profit and simultaneously be able to cover losses from previous transactions through the doubling of capital. So that if at any time capital management decreases, the size of the next transaction will automatically increase.

Financial Management in Forex – Anti-Martingale Model

From the name, this method is opposite to Martingale. In addition to the name, the system of this method is also different, namely not doubling the position when experiencing a loss. The risk of this capital management will increase along with the increase in profits. Addition only occurs if the position is profitable so that the goal of increasing profits can be achieved.

Financial Management in Forex – Cost Averaging

This method is similar to the Martingale because both focus on adding positions when the previous transaction suffered a loss. Broadly speaking, this method is to add to a losing position.

Financial Management in Forex – Pyramiding

This model is the opposite of the Cost Averaging method, which is to increase when you are in a profit position. Pyramiding has logic if the market moves as expected then it could be when the trend is happening. Additional positions also need to be made in the hope that it will continue in the direction of the trend.

Financial Management in Forex – Fixed Fractional Position Sizing

This capital management is most recommended by professional traders. It could even be that you have been using this method for a long time. Simply put, this capital management will determine the size of a fixed position based on a certain percentage of capital management from the amount of existing capital.

Thus the discussion about Forex Trade Financial Management, I hope this article is useful.

A new trader may become confused as to what option he or she should choose between binary options and forex trading. In fact, these two options are the most popular trading options that are newbie friendly. Hence, you should be cautious when picking the right option to begin your trading. This read offers a comprehensive overview of the similarities and differences between forex and binary options trading.

Both these trading options are similar in some ways but different in some other ways. First, we will take a look at the similarities between forex and binary options trading. Both the investment opportunities are tradable online. In fact, a trader can access these trading platforms around the clock, throughout the day and night. The amount of investment is quite low compared to stocks and futures. You can begin trading in forex or binary options with a small amount of capital which is less than $100 most of the time. A new trader will not have to risk a lot on these trading options. That’s why forex and binary options are both popular as newbie friendly investment opportunities on the market.

The trader profits or loses money based on the way the asset or currency moves. This is common to both these trading options. On the other hand, forex and binary options are both tradable on short-term time frames which are not the case when it comes to stock and futures trading. These are the major similarities of these two trading options.

There are many differences between forex and binary options trading. The profit and risk potentials are fixed at the start of the trade when it comes to binary options. For example, if a trader invests $10 on a trade that pays out 80% to winning traders, he or she will either lose $10 or make $8 at the end. Also, the trader gets to keep the initial $10 as well. That’s why binary options trading is considered more newbie friendly compared to forex. On the other hand, forex is more complicated since it is more variable. That’s why you should not invest in forex trading until you have the necessary experience to do so. Forex trading will not let you know the ultimate risk or profit potential until you close the trade.

You also have the option of having binary options software trade on your behalf, like Swarm Intelligence software that has recently been released to the public. This video has a full review on this trading software.

https://www.youtube.com/watch?v=gxhqzftHmno

In conclusion, these are some of the major similarities and differences between forex and binary options trading.

Insider training refers using undisclosed information for the purposes of making profit. This illegal trading is quite common in the world of stocks, shares and securities. It gives the phrase information is power a whole new meaning.

The more infamous form of insider trading is the illegal use of undisclosed material information for profit. It’s important to remember that this can be done by anyone, including company executives, their friends and relatives, or just a regular person on the street, as long as the information is not publicly known. For example, suppose the CEO of a publicly-traded firm inadvertently discloses his/her company’s quarterly earnings while getting a haircut. If the hairdresser takes this information and trades on it, that is considered illegal insider trading, and the SEC may take action.

Sourced from: http://www.investopedia.com/ask/answers/192.asp

If you thought that insider training was joke then wait till you know some of the people who have gone to jail because of it. One of them is of course none other than Martha Stewart. The famous homemaker was in prison for five months.

What Martha Stewart Did Wrong

On December 27, 2001, media mogul and celebrity homemaker Martha Stewart sold her stake in the biotech company ImClone. Two days later, the company’s stock dropped 16 percent when the Food and Drug Administration said it had rejected the ImClone’s main drug, Erbitux, for cancer treatment. Stewart had owned 4,000 shares of ImClone. By selling just before the FDA’s announcement, she avoided losses of $45,673, a tiny fraction of her net worth, which Forbes had estimated at $700 million just six months earlier. However, that trade would end up being one of the defining actions of her career – and the one that landed her in a federal prison.

Stewart was not the only ImClone investor who avoided heavy losses ahead of the FDA’s decision. On the same day she placed her trade, Sam Waksal, ImClone’s chief executive, had sold a $5 million stake, along with his daughters’ full holdings in the company.

Sourced from: http://coveringbusiness.com/2012/05/15/what-martha-stewart-did-wrong

Even business journalists have been convicted for facilitating insider trading. If you are a business reporter and you get information related to trading kindly do not leak it.

1. Foster Winans (AP)

Winans is a former Wall Street Journal writer who penned the influential “Heard on the Street” column in the early 1980s. Able to move markets with his words, he leaked inside information from his reporting to a stock broker, who would make beneficial trades on his behalf. The columnist was convicted in 1985 and remains a syllabus staple in journalism ethics classes across the country.

Sourced from: http://money.cnn.com/gallery/investing/2014/06/02/insider-trading-famous-cases/5.html

As much it is not easy to identify the direct victims of insider trading, the effects are still felt. This is especially true for the markets.

How it affects the market?

The impact of illegal insider trading is considered negative for both the small investors and for the markets. Illegal insider trading ensures that there is no fair play involved and there is no fair demand and supply of stocks, all detrimental to the functioning of a healthy capital market.

Illegal insider trading weakens the faith of investors in the investing system and an unchecked insider trading could keep off people from investing capital and this could potentially harm the economy as a whole.

Safety measures to detect insider trading

In India, the first set of regulations for insider trading was introduced in 1992 by the Securities and Exchange Board of India (SEBI). The regulations restricted insiders and companies in trading securities during times of possession of undisclosed price-sensitive information and barred them from sharing it with any other person outside the company.

Sebi has also prescribed disclosure norms for any directors/officers holding shares in the company besides amending the Model Code of Conduct in 2008 that restricts the directors/officers who have bought or sold shares from getting into an opposite transaction within the next six months to sell and buy shares.

Sourced from: http://www.rediff.com/money/report/perfin-how-insider-trading-can-impact-you/20091112.htm