Archive | June, 2013

Ask & Bid: Knowing the Spread

spread

One of the most frustrating things for new traders is overcoming the spread. The spread is the difference between the bid price and the ask price at a given time. You should always consider the spread before you enter a position, as the move you’re anticipating may not be significant enough for you to turn a profit.

This difference in price can dishearten some traders. When they’ve gone into a position on a currency with a wide spread, they’re starting off in the hole, and the price has to climb that much further before they make a profit. A tighter spread, however, means you can turn a profit that much faster, as the moves don’t have to be as big.

Spreads are directly tied to volume. When there’s less volume in the markets, spreads will be larger; when there is more volume, spreads will be tighter. Volume trends aren’t a secret by any means, and you can use this knowledge to your advantage. The markets see the most volume between 8am and 12pm EST. Around 5pm EST, the markets see the lowest volume of the day.

It’s also worth noting that certain brokers offer a fixed spread while others offer a variable spread. Variable spreads bring the potential both for tighter spreads during periods of high volume in the markets, as well as wider spreads when the market is seeing low volume. Though fixed spreads are generally wider than variable, they bring predictability during periods of market volatility.

We know—it’s just another thing you need to think about before you get into a trade. But as you take these things into consideration, you’ll start to just see these things without thinking about them! But for now just remember:

Less Volume = Wider Spread
More Volume = Tighter Spread

As a side note, we at the Apiary Fund have done everything we can to make our narrow spread work for our traders. If you’re not a part of the fund currently, check out our Trader Orientation Webinar to find out more about the unique advantages provided by the Apiary Fund.

 

Comments { 0 }

Announcing the Apiary Fund’s September 2013 Trader’s Summit

september2013We at the Apiary Fund have really enjoyed getting to meet and get to know our traders at our previous summits, and lots of those who have had the chance to attend have let us know how beneficial they felt the experience to be. That’s why we’re excited to announce the upcoming September 2013 Traders’ Summit!

To make it easier for more of our traders to attend, we’ll be starting the summit on Monday, September 2nd (which is Labor Day), so you shouldn’t have to take too much time off work!

Our three-day summits are really a worthwhile trip with live trading demonstrations and instruction, so we’d really encourage everyone to attend who can! To do so, we keep the cost at a fraction of most seminars. To learn more, feel free to visit the Apiary Summit website. There we have an approximate schedule, reviews of previous summits, and even a visitor guide to local attractions!

If you have any other questions, feel free to give us a call at 1-801-701-1650, or email us!

Comments { 0 }

Lots and Lots — Understanding your Position Size

Just as stock investments are measured in shares and futures investments are measured in contracts, investments in the currencies are measured in lots.

Simply put, 1 lot is 100,000 units of the base currency (You’ll recall that in any currency pair, such as EUR/USD, the first quoted currency is the base currency, and the second is the quote currency). So if you’re trading 1 lot of USD/CHF, you’re trading $100,000 USD. If you’re trading 1 lot of EUR/GBP, you’re trading €100,000 EUR.

I know, 100,000 of any currency seems like a lot, so don’t worry—you don’t have to trade full lots! In fact, we at the Apiary Fund encourage all our traders to at least start out with smaller position sizes. Traders will be able to protect themselves from larger losses by trading fractions of full lots, such as .10 lots (also called a mini) or .01 lots (also called a micro).

Hopefully you now know a bit more about lots and position size. For more information, check out our glossary!

Comments { 0 }

What is the Forex Market, and How Does It Work?

A market is simply a channel for exchange. You’ve probably heard of the Chicago Mercantile Exchange, or the New York and London Stock Exchanges. These are three of the many major centers of exchange. They actually serve as physical centers of exchange to facilitate trading. Stocks, bonds, options, derivatives, and futures are all traded freely on the floors of these trading centers.

The currencies market, however, is different. There is no central exchange playing host to hordes of traders. There is no money exchanging hands amidst endless shouting. Believe it or not, the currencies market, also called the foreign exchange or forex market, is the largest liquid market in the world. To better comprehend just how big the forex market is, let’s take a look at the numbers. The New York Stock Exchange, the largest exchange in the world, sees about $15o billion move through it every day. The forex market moves about $4 trillion each day– making it around 26 times as large!

Because it effectively dwarfs other markets, the forex market has some benefits to offer its traders. For example, because of its size, combined with the lack of a centralized location, currencies are virtually free of external control. Even the largest banks can’t throw enough weight around to manipulate the market–the amounts required would be too extreme. This means an even playing field for us individual traders and small trading operations!

There’s a lot to be said about the forex market, so if you’d like to know more about trading, feel free to visit us at www.apiaryfund.com or give us a call at 1-801-701-1650.

Comments { 0 }