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The stock market is often daunting and unpredictable, leaving even experienced investors anxious. With its constant ups and downs, it’s no surprise that many people hesitate to invest. However, as with anything in life, knowledge is power, and understanding how to navigate market volatility can help you make informed investment decisions. This is especially true for investors in Australia, where the stock market has seen its fair share of turbulence over the years. This article will discuss tips for dealing with stock market volatility in Australia, providing readers with the necessary tools to weather the storm and make intelligent investment choices.

Do your research

The first and most crucial tip for handling stock market volatility is to do your research. Understanding the current state of the market can help you make more informed decisions about which stocks to invest in, when to buy or sell, and how much risk you can tolerate. Researching involves keeping up with news and trends affecting the market domestically and globally. This information can help you anticipate potential market moves and react accordingly.

In Australia, factors such as changes in government policies, interest rates, economic data, and global events can all influence the stock market. Staying informed and understanding how these factors affect the market is vital to mitigating risk. Therefore, reading Australian financial news outlets regularly and following reputable market analysts and economists on social media can provide valuable insights.

Another essential aspect of research is analyzing a company’s financial health before buying stocks. Look at a company’s earnings, revenue growth, debts, and cash flow to determine its stability and potential for growth. Researching a company’s competitors and industry trends can help you make more informed investment decisions.

Diversify your portfolio

Portfolio diversification is critical in managing stock market volatility. Diversification means spreading your investments across multiple stocks, industries, and asset classes, reducing the impact of market swings on your portfolio. For example, if you only invest in one industry and that sector experiences a downturn, your entire investment will suffer.

A diversified portfolio may include stocks from different finance, healthcare, and technology sectors or investments in real estate or commodities like gold. By diversifying your portfolio, you can decrease your risk exposure while potentially benefiting from market upswing. However, remember that diversification does not guarantee profits, and regularly reviewing and re-balancing your portfolio is essential.

When you buy stocks with a broker such as Saxo Bank, you can also opt for exchange-traded funds (ETFs), a basket of stocks tracking an index or sector. ETFs provide instant diversification in one investment, often costing less than buying individual stocks.

Consider long-term investing

Investing for the long term can help investors ride out market volatility. Short-term fluctuations are inevitable, but the stock market has historically shown growth over an extended period. Therefore, consider investing in stocks with a long-term view and avoid catching up in short-term market movements.

Long-term investing allows you to take advantage of compound interest, where your returns are reinvested into your portfolio, potentially increasing your profits over time. It can save you from making rash decisions during times of volatility, which can lead to losses.

You can also consider investing in exchange-traded funds (ETFs) for long-term investment. ETFs are a collection of securities that track an index, such as the S&P/ASX 200 index, providing diversification and potentially more stable returns.

Don’t let emotions guide your decisions

Various factors, including human behavior, influence the stock market. Many investors make emotional decisions during volatile times, leading to poor investment choices. Fear and panic often drive people to sell their stocks when the market is down, potentially missing out on future gains.

To avoid making decisions based on emotions, have a well-defined investment strategy. Stick to your plan and avoid reacting impulsively to market fluctuations. It helps to remember that the stock market goes through cycles of ups and downs, and staying invested for the long term can help you ride out any temporary downturns.

Consider working with a financial advisor who can provide objective advice and help you stick to your investment strategy.

Keep an eye on your investments

Regularly monitoring your portfolio is crucial to managing stock market volatility. Keep track of how your investments are performing and make adjustments as needed. Reviewing your portfolio can help you identify areas of weakness, such as underperforming stocks, and take necessary action.

However, regularly checking the market is essential to avoid becoming consumed. Set realistic expectations for your investments and avoid obsessing over short-term fluctuations. Instead, focus on the long-term growth potential of your portfolio.

Be prepared for ups and downs

No matter how well you research or diversify your portfolio, stock market volatility is inevitable. Be prepared to withstand the ups and downs of the market by diversifying your investments, having a long-term view, and managing your emotions. Understand that temporary downturns are part of the stock market cycle, and staying invested for the long haul can potentially lead to significant gains.

It’s also essential to have an emergency fund outside of your investments. It can help you avoid selling stocks at a loss during difficult times.

Dealing with the currency trading industry is one of the most difficult tasks in the world. You might be a successful businessman but this doesn’t mean you will be able to make consistent profit in the trading industry. There are many things you need to consider before you can make a living out of trading. For instance, those who trade the market with emotions are always blowing up their trading account within a very short period of time. So if you want to survive in the investment business, you must learn the perfect strategy to control your emotions.

Though trading is a very tough profession, by following some simple rules you can easily make a decent living. New traders in Hong Kong are doing relatively well in this business since they learn about the most common mistakes in this business. Let’s learn the three most common mistakes for which the retail traders are struggling in this profession.

Addition to the trading industry

Trading can be an extremely addictive profession. New traders always want to stare at their trading chart to find quality trades. However, if you become addicted to this market it won’t take much time to start over trading the market. The movement you become addicted to this profession is the very moment you risk your entire investment. This will eventually lead you to over trade the market which is one of the major cause to lose money. You might think by placing more trades, you will be able to earn more money. But do some simple math and try to learn from the experienced traders in Hong Kong. You don’t have to execute tons of trades to secure a decent profit at the end of the month. Just stick to the basic rules of investment and focus on carrying out quality trade executions.

Not having a risk management policy

Without following strict money management rules, you will never become a successful Forex trader. Professional traders never risk more than any amount they can afford to lose. So, it’s very obvious you need to know about your risk tolerance level. As a new trader, you might feel comfortable by risking 3-5% of your account balance but this is nothing but a suicide mission. You should never risk more than 2% of your account balance in any trade even though you have the best trading system in the world.

Winning or losing doesn’t really matter as long as you trade with proper money management. Some of you might think you can easily make a huge profit by increasing your risk factors but you have think about the worst case scenario. Always be prepared to lose trades or else you will never be able to execute quality trades in this market.

Ignoring the high impact news

During the event of a high impact news release, the market becomes extremely volatile. Being a new trader you should never trade such markets since you might lose a big sum of money. Always remember, trading is all about finding quality trades with low risk. It’s true that you can easily make a huge profit by trading the high impact news but if you do some research, you will understand why the professional traders avoid trading the high iMac news.

The majority of the new traders learn technical analysis to trade the market. Once you master the art of technical analysis, you can easily execute quality trades but you will never know the proper way to assess the strength of the market trend. To do so, you must learn fundamental analysis. Once you master the art of fundamental analysis, you might feel fascinated with a news trading strategy. This is where you need to keep your emotions in control. Never try to make some quick profit from this market based on high impact news trading. Follow the conservative trading technique as it will save you from blowing up your entire trading account.

Many successful self-taught investors have started with forex investing. Forex investing is a great way to test the waters and start understanding how markets work. However, people who sell forex products often prey on this audience and make them believe that trading forex is the easiest way to make money through investing, which is not actually true.

While for some, forex might be their favourite way to trade, for others, it might not be the best choice based on what they’re looking for. In this article, we’re going to give you some of the pros and cons of forex investing so you can make a more informed decision.

Pro: Forex Trading Allows you to Start for Cheap

Forex allows you to trade with very low costs. There aren’t any real commissions to pay on forex since the majority of brokers will make money off the spread between currencies in the market. So, you won’t have to worry about additional brokerage charges, which eliminates an overhead. With equity trading, commissions will play a huge role in your trading strategy and they will have a major influence on your choice of brokers.

Con: Forex Often Lacks Transparency

Forex is not the most transparent market out there. Sometimes, you’ll only get access to quotes provided by your broker. You also might not know exactly how orders are fulfilled. And in some cases, you might not actually get the best price on a particular currency. Deregulation means that brokers have the upper hand in this situation and pretty much hold all the cards.

However, this can be avoided if you’re going for a broker that is regulated by reputable regulatory bodies. Forex brokers like markets.com, for instance, are regulated by the ASIC in Australia, the CySEC for European traders, and the FCSA in South Africa. If you want to learn more about them and what they have to offer, you can check out this markets.com review from Investing Goal. You’ll also find other reviews on the Investing Goal website if you’d like to explore what other options are available.

Pro: Works with Different Trading Styles

One of the best things about the forex market is that it’s open 24 hours a day, seven days a week, and it fits different trading styles. Forex is a great option for people who want to do some short-term trading. And while the markets never stop, you can still monitor when there will be lower activity for certain currency pairs.

For example, night time in Japan is daytime on the US east coast. Traders during this period can take advantage of the lower volatility during these periods to make high volume trades while anticipating movement during on hours. Forex also allows you to go for long-term positions as well and look at long-term developments for certain currencies. This makes forex one of the most accommodating markets out there. If you don’t want to make all the investing decisions yourself you can always use a copy trading platform to make things easier.

Con: Price Determination can be Complex

A lot of people falsely think that determining currency prices is much easier in forex then with other financial instruments, but they’re wrong. Price determination with forex has to take multiple factors into consideration at once. Global economic and political market conditions can be difficult to evaluate, and most trading is done using technical analysis, which accounts for much of the volatility in the market. Getting the technical aspect wrong is the reason why many trades go south and can be highly cryptic in some cases, making forex one of the most unpredictable markets out there.

Pro: Short Selling is Easy

One point in favour of forex is how easy it is to short sell currencies on the market. Since the market sees so much volume, the chances of getting stuck on a trade at any given time are slim to none, and you’ll always be able to find a buyer or a seller at any time. This will allow you to make money whether a currency is falling or soaring.

Con: Leverage can be a Double-Edged Sword

A lot of brokers out there use leverage as a selling point, and it can be a great option for people with limited capital who want to control larger assets. But with high potential for gain also comes with a high potential for loss. And what’s worse is that while leverage trading is often marketed towards beginners, beginners are much more at risk of incurring huge losses. So, we strongly suggest that you don’t engage in leverage trading unless you have a thorough understanding of it, have a strong grip on your emotions, and know when to cut losses short, and an equally strong capital allocation scheme.

Conclusion

As you can see, while the forex may seem like a great trading option for some, it isn’t for everyone. Make sure that you weight the positives and negatives of trading in the foreign exchange market and see if it’s actually the best option for you.

People with family and friends living abroad are faced with the constant problem of sending money to their loved ones. The challenge is usually finding a method they can use to transfer money without having to incur the high transaction costs or wait for days before the transfer is processed and completed. If you are in need of sending money abroad, the good news is that there are several methods you can use to transfer money at a cheaper rate and without delays. One of the best techniques on how to send money abroad cheaper is by use of Foreign exchange companies, also known as Forex or FX companies.

What is a Forex company?

Forex companies are companies whose main purpose is to offer international money transfer services. To do this, Forex companies use every aspect of currency exchange, and sometimes the even result to physical delivery of the cash to the receiver.

Advantages of FX companies

While banks are usually a safe bet when conduction any financial transaction, they are very problematic when it comes to sending money abroad. More often than not, banks will charge very high transaction fees and offer low exchange rates. The process is also characterized by long delays. In addition, you might have to open an account with a bank to enjoy their international money transfer service. These constraints only serve to make the process longer and more expensive.

FX companies are a better alternative when it comes to sending money abroad for the following reasons:

– FX companies charge very low transaction fees and some top companies even offer the service for free.
– Forex companies offer better exchange rates than banks. While most banks have an exchange rate margin that goes as high as 5%, FX companies’ margins can go as low as 0.5%.
– Unlike most banks, Forex companies do not have any hidden fees. You will always have a clear picture of how much you are paying before sending money.
– FX companies transactions are quicker (approximately 48 hours to send money anywhere in the world) compared to banks, which can take as long as 8 days.
– Sending money abroad with FX companies usually just requires you to go online and make the transaction, while with you must be physically present and undergo a lengthy process when using banks.

Sending money through a Forex broker

Here is how you can send money abroad cheaper using FX companies:

– Chose a favorable FX company to use based on your current location and the location of the recipient. You can do this comparing the services offered by different companies on the Internet.
– Open an account with the FX Company you have chosen. However, you should ensure that the website of the company is secured to guarantee the security of your account and personal information.
– Login into the website to check the exchange rates being offered.
– If you are satisfied with the rates, you can go ahead and send money. If you are not satisfied with the rates, you can always wait until they fluctuate to a favorable rate: most online interfaces used by these companies have exchange rates alert system that you can use.

Other ways to send money abroad at cheaper rates

Apart from Forex companies, there are other methods you can use to send money abroad at cheaper rates. They include:

Online accounts

Online accounts such as AlertPay and PayPal offer international money transfer services, with the transactions taking a few hours to a few days. With this accounts, you can send money by either using account to account transfer or bank to online account transfer. Transfer using online accounts is very cheap, and in some countries it is free.

Using wiring sites

Online wiring sites, for example, Western Union and Money Gram, offer international money transfer services to several locations around the world. Transactions using these sites are very fast, and they charge an amount of the money you are sending. The fees are higher than those practiced by the FX companies in 90% of the cases.

Sending pre-paid credit cards

Another trick of sending money abroad cheaper is by sending the recipient a pre-paid credit card that has the money. Credit card services such as MasterCard and Visa offer pre-paid credit cards, which you can load with funds and send to the recipient through post mail. The recipient will then access the funds by withdrawing them from their local ATM machine.

Conclusion

Having cash and not being able to send it to your desired location abroad due to high transaction charges is very frustrating. However, you can now be able to send money abroad without having to worry about high feesor lengthy delays by using the above money transfer solutions.

Razvan has a Master degree in Strategic Marketing and is heavily invested in online marketing for more than 5 years. But in the free time he loves to play team sports, read the latest finance news and drink artisanal beers. His latest project is SendMoneyAustralia.com.

Before you decide to jump into foreign exchange market as a broker or as an investor, you must acquire a basic knowledge of how this market operates and the terms used in it. The foreign exchange market never shuts down and operates 24 hours a day on all working days. It is the largest liquid financial market. It’s not like a typical ‘market’ or stock exchange. There is no central trading location. All the transactions are conducted over the telephone or electronic foreign exchange trading networks. The ‘interbank market’ is the primary market for currencies. First of all, remember foreign exchange has been abbreviated to ‘forex’ and ‘FX’ by the people who are active participants in foreign exchange trading. Here is a list of the basic terms used in forex trading.

• Exchange Rate: The exchange rate expresses the value of one currency in terms of another. For example, AUD/JPY = 88.6348352. This means, 1 Australian dollar is equal to 88.6348352 Japanese yen.

• Currency Pair: The two currencies shown in an exchange rate are called a ‘currency pair’. The first currency is known as the ‘base’ currency, and the second one in the pair is called ‘counter’ or ‘terms’ or ‘quote’ currency.

• Currency Codes: There are eight major currencies which are traded in the forex market. There is a three character code that denotes the country. The major currencies are;

USD = US Dollar
EUR = Euro
JPY = Japanese Yen
GBP = British Pound
CHF = Swiss Franc
CAD = Canadian Dollar
AUD = Australian Dollar
NZD = New Zealand Dollar

• Lot: The standard unit size of a transaction. A 100,000 units of the base currency are called a standard lot. If its 10,000 units, traders refer to it as ‘mini’ and 1,000 units are called ‘micro’.

• Pip: This is the smallest unit in price quote for currency. Beginners will note that forex traders quote currencies with 4 decimals. For example if a price is quoted as 1.2345 the last digit ‘5’ is known as ‘pip’. If it goes up by 3 pips it would be 1.2348.

• Bid and Ask Price: The bid price is the price at which the forex market will buy a particular currency from you. The ask price is the price they are ready to sell a currency to you. The market makes money when the ask price is higher than the bid price. The difference in the two prices is known as the bid/ask spread.

• Sell Quote / Bid Price: The sell quote is the currency on the left of the pair known as the base currency. For example, if AUD/USD = 1.0532/03, this means you can sell 1 Australian dollar at the bid price of US$ 1.0532.

• Buy Quote / Offer Price: The buy price is displayed on the right of the currency pair. This is the price at which you can purchase the base currency. It is also known as the market maker’s ask or offer price. For example AUD/USD = 1.0532/03 means that you can buy 1 Australian dollar for US$ 1.0532.

Once you are familiar with these basic terms of forex trading you can take the plunge and learn more advanced terminologies and how this unseen market operates.