Video Transcript. This course is open to learners who have completed all eight courses on the Foundations of Teaching for Learning MOOC. It revisits topics covered and focuses on what it really means to be a reflective practitioner. One of the great paradoxes of learning is that the more you know the more you become aware of what you don’t 26/7/ · Forex Beginner Course Part 1 – Forex Foundation MetaTrader 4 Mobile App Tutorial For Beginners Learn & Start Trading Forex in 16 Minutes Android/iOS We will be _The Alex Douedari Coaching Experience. Login
How Trading Conditions Can Affect a Trader’s Performance | Finance Magnates
While market volatility is cherished by day-traders as it provides a lot of potentially lucrative setups, they often lack a complete picture of all the factors that come into play when calculating total risk and trading cost. Professional traders and leading analysts Alex Douedari and Frank Alex douedari course have been following the markets for more than a decade and have witnessed times of extreme volatility and even market crashes, gaining invaluable insight into how volatility can affect profitability and how choosing the right broker can help traders avoid common pitfalls that may wipe their accounts clean.
Regulated forex brokers are obliged to disclose all applicable trading costs to their clients; some brokers offer far more competitive spreads; others offer smaller commissions and rollover charges while alex douedari course still promise no markups or have hidden fees.
Releases on the economic calendar occur throughout the day and depending on whether expectations are met or not, alex douedari course, can cause significant volatility. Just like retail traders, large Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash.
Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash. This can be differentiated as market liquidity or alex douedari course liquidity.
The most common ways to do so include a current ratio, quick ratio, and cash ratio. Its primary function is to ascertain how quickly a given asset can be bought, alex douedari course, sold, or exchanged without a disparity in market price. This is due to its widespread acceptance and ease of conversion alex douedari course other assets, forms of cash, or currencies, etc.
All other liquid assets must be able to be quickly and efficiently converted into cash, i. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc.
It is important to note that cash is not uniformly liquid for several reasons. The below examples encompass all types of assets and their corresponding level of liquidity.
Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons.
These are generally assumed to be quick assets. As such, these assets are liquid, alex douedari course. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery.
Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. For many individuals this is the most valuable asset they will own in their entire lives. However, selling a house typically requires taxes, alex douedari course, realtor fees, and other costs, in addition to time.
Real estate or land also takes much longer to exchange into cash, relative to other assets. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets. This can include among others, a real estate or property market, market for fine arts and collectable, and other goods. The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, alex douedari course, or other capital, regardless of utility.
This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is. Additionally, low liquidity refers to a higher spread between two prices.
One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. By definition, liquidity in stocks varies for a number of reasons.
Stocks alex douedari course low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. A good example of this is the real estate or property market, alex douedari course.
While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties. Liquidity providers play a key role in this regard. Accounting liquidity is a alex douedari course by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them.
This includes paying off debts, overhead, or any other fixed costs associated with a business. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.
If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity. This can be achieved using a total of four formulas: the current alex douedari course, quick ratio, acid-test variation, and cash ratio. Highly liquid assets will correspond to higher numbers in this regard. Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations.
Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments. The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities, alex douedari course.
In this sense, the cash ratio is the most alex douedari course of the other liquidity ratios, excluding accounts receivable, inventories, alex douedari course, or other assets. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control.
Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals. This metric is a commonly used as a measure in the investing, alex douedari course, banking, or financial services space.
Liquidity determines how quickly a given asset can be bought, alex douedari course, sold, or exchanged without a disparity in market price. Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize. All other liquid assets must be able to be quickly and efficiently converted into cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded.
Is a Home a Liquid Asset? Selling any property can incur additional costs and take a long amount of time. Additionally, there is often a price disparity from the time of purchase, meaning a seller may not even get its original market value back at the time of the sale.
Additionally, the company is a popular single-stock CFD offering at many brokerages, with very high volumes. Until you are eligible to withdraw or collect a pension, without early withdrawal penalty, it is not considered a liquid asset. The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash.
Read this Term providers do not know the outcome of news prior to their release and because of this, they look to offset some of their risks by widening spreads. Broadly speaking, liquidity providers will act as the both the alex douedari course and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity.
These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on the bid-ask spread. In doing so, these entities theoretically ensure greater price stability and also improve liquidity by making it easier for traders to alex douedari course and sell at any price level. Market liquidity providers also oversee an important service and take on a significant amount of risk. However, alex douedari course, these are still able to profit from the spread or by positioning themselves on the basis of the valuable information available to them.
Analyzing Liquidity Providers Relationship with BrokersIn addition, alex douedari course, liquidity providers also delivering interbank market access to retail brokers. They are typically large multinational investment banks, or other financial institutions that can be non-bank entities. Each liquidity provider is streaming executable rates to the broker whose aggregator engine is selecting the best bid and ask and streams it to clients to deliver the best possible spread. The broker is the direct counterparty to all trades executed with the liquidity provider and typically only uses them to offload flows which it finds uneconomical to internalize.
That said, some brokers are sending all of their flow to liquidity providers. Liquidity providers have a set of characteristics which are determining their suitability and reliability - such are order rejection rates, spreads, and latency.
Read this Term like banks and other alex douedari course institutional lenders can provide more competitive spreads that do not fluctuate wildly. Essentially, lower spreads that alex douedari course not widen too much in times of high volatility can help significantly reduce trading costs which translates to bigger profits and fewer losses. Of course, a competitive quote is not the only thing that guarantees lower trading costs, other factors such as latency, execution speed and slippage should also be considered.
Latency is essentially the time it takes for an order to be executed. Brokers with ultra-fast execution speeds can guarantee near-instant order placements which diminishes the possibility of negative slippage and reduces the risk of traders having to suffer greater trading costs. From a retail perspective, no matter how skilled a trader is in identifying market opportunities and anticipating trends, alex douedari course, avoiding unnecessary costs such as wide spreads, unwarranted markups, hefty commissions and hidden fees is crucial to their success.
Finding a fair, regulated, and reputable broker that minimises trading costs and is fully transparent about their fees and charges can help traders optimise their performance. To learn more about BDSwiss product offering click here. To learn more about BDSwiss Partners Program alex douedari course our website. Data provided by BDSwiss BI Research Team.
Disclaimer: The above content was prepared by the BDSwiss Research Team. Any data and information contained herein should not be considered investment advice in any way.
The above article was published for background and informational purposes only. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent alex douedari course if necessary.
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The Secret to Forex Success: Combining Technicals \u0026 Fundaments with Alex Douedari
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