Become part of the ayondo community and benefit from the knowledge and experience of investors with an affinity for the stock market. From day traders to trading system developers, you won't find a broader spectrum of like-minded people anywhere else. Look over the shoulders of professionals or use the opportunities to exchange ideas with others.
Some time ago, ayondo integrated Chat GPT into its information offering. Our development team is currently working on a Lab feature that will provide the community with AI-based financial news. The AI-FAQ section is also a lab feature designed by our innovation team. The exciting thing about it is that the social trading community can interact directly with the AI. In addition to the core function, the tool offers the possibility of evaluating the information content of the answer and at the same time suggesting the result for inclusion in the FAQ section. Feel free to give it a try, for example with this question.
Just a few weeks after its launch, the AI content section is already growing! The largest user-generated trading and investment encyclopaedia is currently being created here. Many thanks to the trading community for their commitment and positive feedback. This motivates us! Further exciting AI developments are on our developer roadmap!
Important Things to Know Before Trading
Skills Required for Trading:
Before investing with real money, consider the following factors:
Risks in Trading Currencies
Risks in Trading CFDs:
Reasons Why Traders Lose Money:
By addressing these factors and adopting a disciplined, well-informed approach to trading, traders can improve their chances of success and reduce their potential for financial loss.
1. Education and Research
2. Choose a Trading Style
3. Develop a Trading Plan
4. Practice with a Demo Account
5. Risk Management
6. Learn from Experienced Traders
7. Stay Updated on Market News
8. Monitor and Evaluate Your Performance
1. Education and Research
2. Develop a Trading Strategy
3. Manage Your Risks
4. Maintain Discipline and Emotional Control
5. Choose the Right Trading Platform and Broker
6. Network and Learn from Experienced Traders
Most Common Mistakes in Trading:
Before starting with trading, it's essential to consider the following best practices:
By considering these best practices, you can increase your chances of success in the world of trading.
MetaTrader is a popular electronic trading platform widely used by online retail foreign exchange traders. It is developed by MetaQuotes Software and allows users to trade in the financial markets, such as Forex, commodities, cryptocurrencies, and stock indices.
MetaTrader provides advanced trading tools and functionalities, including real-time charting, technical analysis, expert advisors (automated trading systems), and customizable indicators. There are currently two main versions of the platform:
Both platforms are available for desktop, web, and mobile devices, making them highly accessible for traders and investors. Additionally, MetaTrader offers a robust marketplace where users can buy, sell, or rent trading tools and automated strategies developed by experts all around the world.
MetaTrader brokers are financial institutions or companies that provide traders with access to the MetaTrader platform, enabling them to trade various asset classes like forex, commodities, indices, and stocks. The two main versions of the MetaTrader platform are MT4 and MT5. Brokers offer these platforms to clients for trading, analysis, and management of their trading accounts.
Features of MetaTrader brokers:
It is crucial to research and compare different MetaTrader brokers in terms of their fees, spreads, trading conditions, and regulation status to choose a suitable broker for your trading needs.
You can find a list of reputable MetaTrader brokers on various websites and trading communities, such as: Forex Church, ForexBrokerz, and DailyForex.
The best solution for trading currencies is a combination of various factors, tools, and strategies to make informed decisions and manage risks effectively. Some key elements to consider include:
In summary, the best solution for trading currencies involves a combination of education, a reliable broker, a well-developed trading strategy, strong analytical skills, risk management, and continual learning.
In stock market trading, a gap is the difference between the closing price of the previous day and the opening price of the current trading day. If the opening price is above the closing price of the previous day, it is called an up-gap; if it is below, it is called a down-gap.
Gaps occur when there is relevant information between the end of trading on one day and the start of trading on the next day that affects the price. They can be important for traders as they can serve as an indication of a possible trend reversal or a continuation of the trend.
The Sharpe ratio is calculated by adjusting the return of an investment for the risk-free interest rate and dividing it by the volatility of the investment (measured by the standard deviation of returns). The formula is:
Sharpe Ratio = (return of the investment - risk-free interest rate) / volatility of the investment.
The Sharpe Ratio is a measure of the excess return achieved by an investment compared to a risk-free investment (e.g. a money market account) per unit of risk associated with that excess return. The higher the Sharpe ratio, the better an investment has performed relative to its risk.
The Calmar Ratio is a risk-adjusted performance measure calculated by dividing the average annual return ratio of an asset by its maximum drawdown during the same time period. It is named after its creator, futures trader Jerry Calmar.
The result of the Calmar ratio indicates how many units of the asset's return one has experienced in downside risk compared to the disturbance margin of the market environment point. The higher the ratio, the better the investment product performed.
An exchange is a place where financial instruments such as shares, bonds, commodities and currencies are traded. There are different types of exchanges, e.g. securities exchanges, commodity exchanges and foreign exchange exchanges.
Trading on the stock exchange takes place via a central marketplace where buyers and sellers come together to conclude transactions. The stock exchange allows investors to buy and sell securities and other financial instruments by displaying the price in real time.
The exchange exists to make trading fair and transparent for all investors by establishing a set of rules and regulations governing trading and access to the market. It is an important source of capital for companies to raise funds by selling shares to the public.
Trading on the exchange is done through brokerage firms that act as intermediaries between buyers and sellers. Brokers are responsible for executing trading orders and reporting trading activity on the exchange.
Stock market prices can be affected by many factors, including political stability, economic conditions, labour market data and changes in corporate business performance. Investors use the stock exchange to adjust their investment strategies to meet needs and objectives.
The technical analysis of charts is based on the evaluation of historical price data and is used to predict future price developments. Various tools and indicators, such as trend lines, moving averages or Bollinger bands, are used for this purpose.
The aim is to identify patterns, trends and turning points in the chart and to derive forecasts from them. Technical analysis is particularly popular with traders who focus on short-term price movements, as it enables them to make quick decisions.
Capitalisation plays a crucial role in a trader's trading success. Sufficient capital enables the trader to open larger positions and thus potentially achieve higher profits. On the other hand, too little capital also carries a higher risk for the trader, as he may be forced to liquidate unfavourable positions or no longer implement risk management strategies.
Therefore, it is important that traders use appropriate risk and money management and have sufficient capital to implement their trading strategies.
There are many reasons why traders can lose money. Here are some of the main reasons:
To trade successfully, traders need to have a well-thought-out trading plan based on sufficient knowledge and strategies. They should be disciplined to stick to the plan and keep track of their trading activities. Traders should also be careful to manage their trading equipment appropriately and apply sound risk management techniques to limit their losses.
In options trading, an investor acquires the right, but not the obligation, to buy or sell a certain quantity of an underlying asset (e.g. shares, commodities, currencies) at a certain price at a certain time.
There are two types of options: Call options (calls) and put options (puts). An investor who buys a call option speculates that the price of the underlying asset will rise, while an investor who buys a put option speculates that the price of the underlying asset will fall.
In both cases, the investor has the right to buy or sell the security at a predetermined price (the strike price) during a specified period of time (the term). Options can be traded on different underlying assets and offer investors a way to diversify their portfolios and minimise their risk.
However, options also have a higher risk potential than buying or selling securities directly, as they have a limited time window and the investor has to pay the strike price in advance. It is therefore important to be well informed and carry out a careful analysis before starting to trade options.
The VIX or "Fear Index" is a volatility index that measures the expected fluctuations of the S&P 500 stock index. It is also known as the "fear barometer" because it is considered an indicator of market uncertainty and nervousness among market participants.
A high VIX number means that large fluctuations in the S&P 500 are expected, which usually indicates increased volatility and uncertainty in the market. A low VIX number, on the other hand, means that relatively stable market conditions prevail.
The VIX can be an important tool for investors and traders to better assess market developments and evaluate possible opportunities and risks.
Correlated financial markets are markets whose price movements are related to each other. When two or more markets trend in line with each other, they are called positively correlated markets. When they trend in opposite directions, they are called negatively correlated markets.
For example, stocks and bonds usually have a negative correlation: When stock prices go up, bond yields usually go down. Conversely, bond yields often rise when stock prices fall.
By identifying correlated markets, investors can diversify their portfolios while reducing the risk that all their investments will fall at the same time.
Seasonal effects on stock markets refer to recurring patterns that occur in financial markets throughout the year. These patterns can be due to various factors, such as seasonal fluctuations in demand for certain products or services.
An example would be the so-called "January effect", where stock markets often outperform in January. Another seasonal effect is the "summer lull", where activity in financial markets usually decreases as many traders go on holiday.
Seasonal effects can be used by investors to make investment decisions by using historical trends to estimate future probabilities. However, it is important to note that seasonal effects are not a perfect indicator of a market's future performance and can be overshadowed by other factors.
The profit factor indicates how much profit was generated in relation to the loss and is calculated by dividing the total profit by the total loss. A value of 1.0 or higher indicates that the strategy was successful. Example: A forex trader has executed 10 trades in one month, generating a total profit of 500 EUR. He also has a total of 5 losing trades and thus a loss of 250 EUR. The profit factor is calculated as follows: Total profit = 500 EUR Total loss = 250 EUR Profit factor = Total profit / Total loss Profit factor = 500 EUR / 250 EUR Profit factor = 2 The profit factor in this example is 2, which means that on average the trader has earned twice his loss as profit.
The profit factor is an important indicator to evaluate the effectiveness of a trading strategy. It is calculated by computing the ratio of total profit to total loss. The calculation is done as follows:
Profit Factor = Total Profit / Total Loss Size The total loss size is considered a negative value, so it is important to use a negative value in this calculation. A profitable trading system has a profit factor greater than 1. The higher the value, the better the effectiveness of the strategy.
Copy, mirror and social trading all have the goal that traders can follow each other and benefit from the experiences and decisions of other traders. Nevertheless, there are some differences between the three concepts:
Copy Trading: With copy trading, investors automatically copy the trades of other traders on their own account. The traders who are copied receive a commission for this. This means that the copied trades are directly imitated and the investor's own performance takes place in real time depending on the performance of the copy model.
Mirror Trading: Mirror trading is similar to copy trading. Here, investors also copy the trades of other traders, but these are automated trading programmes. It is therefore a combination of automated trading and social trading.
Social trading: With social trading, investors do not make any direct commitments. Instead, there is a platform where different traders disclose their trades and other investors can view and analyse these trades. Afterwards, everyone can decide for themselves whether and which trades should be copied manually. Here, too, one is charged for the transparency of the trades and for participation in the community.
These concepts can make it easier for beginners to start trading and for experienced traders to share their strategies and earn additional income.
The concept of a trailing stop is a trading strategy used to limit the potential losses on a trade. A trailing stop is a type of stop-loss order where the stop price is automatically adjusted if the price moves in the desired direction. In a long trade (buy), the stop price is set below the current market price, while in a short trade (sell), the stop price is set above the current market price. As soon as the trade moves in the desired direction, the stop price is automatically adjusted so that it is always a certain percentage or fixed amount below or above the current market price. This ensures that the trade is closed with a profit if the market moves in the right direction. If the price moves in the opposite direction, the stop price remains unchanged and once the price reaches the stop price, the position is automatically closed to limit potential losses. A trailing stop is a popular trading strategy used by many experienced traders to get the maximum profit from their trades while minimising their risk.
The concept of last look refers to a practice used by online forex trading platforms to determine the final price of a currency transaction. This involves a broker or market maker giving the trader a short delay before confirming or rejecting the transaction to determine the current market price. Some of the features of last look are:
Margin and leverage are closely related and influence each other.
Margin refers to the percentage of the total value of a trade that a trader must deposit as collateral to open a position. The higher the margin rate, the more equity is needed to open a position.
Leverage refers to the ability to control large positions with a small amount of equity. The higher the leverage, the larger the position a trader can open with a given amount of equity.
Higher leverage can allow a trader to open larger positions, which can lead to higher potential profits. At the same time, however, higher leverage can also lead to greater losses if the market moves against the trader.
It is therefore important that traders understand the relationship between margin and leverage and implement appropriate risk management strategies to protect their capital.
Conflicts of interest can occur in financial service providers when the company or employee obtains financial benefits through an action or recommendation that is contrary to the interests of the client. Typical characteristics of conflicts of interest at financial service providers may include:
Financial service providers have a duty to act in the best interests of their clients and to disclose and avoid conflicts of interest.
There are several reasons why many CFD brokers have established themselves in Cyprus:
So overall, Cyprus offers a favourable environment for CFD brokers targeting European clients.
The ascending triangle pattern is a technical chart pattern frequently used by traders to identify potential trading opportunities. It is formed by a horizontal resistance level and a rising trend line, creating a triangle-like pattern. This pattern is typically considered bullish, as it suggests that buyers are becoming more aggressive and are willing to buy at higher prices.
To trade this pattern, traders typically look for a breakout to the upside at the point where the resistance level and the rising trend line meet. This would indicate that buyers have overwhelmed sellers and have taken control of the market. Traders may enter a long position at this point and place a stop loss below the trend line to limit potential losses.
It is important to note that this pattern can be invalidated if the price breaks below the rising trend line, which would suggest that sellers have taken control of the market and the pattern is no longer valid.
As with any trading strategy, it is important to conduct thorough research and risk analysis before making any trades. Traders should also consider using other technical indicators and tools to confirm their analysis and reduce the risk of false signals or unexpected price movements.
There are several hidden risks in trading that both novice and experienced traders may not be immediately aware of. Some of these risks include:
To minimize these risks, it is important to develop a well-thought-out trading strategy based on sound analysis, as well as effective risk management. This includes staying up to date on market conditions and potential risk factors.
Currency trading, also known as foreign exchange trading or forex trading, is the exchange of one currency for another currency.
The basis for currency trading is exchange rates. An exchange rate is the value of one currency compared to another currency. Exchange rates are constantly changing and are influenced by factors such as political events, economic stability, and interest rates.
To invest in currency trading, you need a trading account with a forex broker. This gives you access to a trading platform that allows you to buy and sell currencies.
An important term in currency trading is the "lot." A lot refers to the size of your trading position. Standard lots are usually 100,000 units of a currency. There are also mini-lots, which is 10,000 units of a currency, and micro-lots, which is 1,000 units of a currency.
There are many different trading strategies in currency trading, all of which aim to make profits by predicting exchange rate movements. Some strategies are based on fundamentals, while others are based on technical indicators.
It is important to note that currency trading involves a high level of risk. One wrong decision can lead to big losses. It is advisable to practice with a demo account before trading with real money.
Difference contracts (CFDs) are popular financial instruments that allow investors to bet on the price movements of various underlying assets without actually owning them. Here is a brief breakdown of how CFDs work:
How do CFDs work?
A CFD is a contract between an investor and a broker that allows the investor to bet on the price movements of a specific underlying asset. Most CFDs reflect the underlying stock price, index, or commodity prices.
If the investor takes a long (buy) position, he will profit if the price of the underlying asset rises. If the investor takes a short position (sell), he will profit if the price of the underlying asset falls.
This means that the investor can make profits without actually having to own the asset. At the same time, however, this also carries risks, especially if a high degree of leverage is used. It is therefore very important to research thoroughly and develop a strategy before trading CFDs.
What are the advantages of CFDs?
What are the risks of CFDs?
How to choose a CFD broker?
CFDs can be a lucrative investment strategy for the experienced investor, but also carry a high risk. It is therefore advisable to research carefully and develop a strategy before deciding to trade CFDs.
Sure thing! Here's a study plan that integrates different skills and topics relevant to real money trading:
By combining various skills and topics in finance, you can develop a broader understanding of real money trading and identify the connections between them. Keep up-to-date with industry news and trends, participate in inter-trading forums, and continually enhance your knowledge to succeed in real-money trading.
The DAX (German Stock Index) and the DAX Future are two different financial instruments, but they are closely related. The main difference is that the DAX is a stock index, while the DAX Future is a futures contract on this index.
In summary, the DAX is a stock index that reflects the performance of the 30 largest German companies, while the DAX Future is a financial instrument that allows investors to bet on or hedge against the future performance of the DAX index.
Currency trading (or foreign exchange trading) refers to buying and selling currencies with the aim of making profits. Here are some important concepts and terms that can help you be more successful in currency trading:
The subject matter of a contract for difference (CFD) is the difference between the buying and selling price of an underlying asset such as stocks, indices, commodities, currencies or bonds. Essentially, a CFD is an agreement between the trader and the broker in which the trader speculates on the future price of the asset.
A CFD allows the trader to open a position in the underlying asset without actually having to own the asset. Instead, the trader receives the difference between the buying and selling price of the asset.
Compared to trading the actual asset, trading CFDs allows traders to trade with leverage, which means they can open larger trading positions than they could afford if they actually owned the asset. However, leverage also increases the risk of losses.
It is important to note that CFDs do not confer ownership rights in the underlying asset. Instead, traders speculate on the price movements of the asset and profit from the difference between the buying and selling price.
This module is another innovation from the ayondo Lab developer series, which is in an early beta stage. The first version was launched in early March 2023, just a few days after Salesforce and Slack announced the integration of a Chat GPT beta.
Further development and optimisation of the feature set is planned. As with other Lab features, the product development cycle thrives on community feedback. Feel free to contact us if you have suggestions that would improve the utility and usability.
Additional note on usage: The questions listed here come from the community. The answers were provided by the AI. Inclusion in the FAQ/QnA is done after quality assurance, but without making editorial changes. The AI's answers to certain questions are not identical in every case. They may address the same question twice in a row. It is very likely that the answers differ in content and sentence structure.
The images displayed in the header are AI-generated. The parameters for generating the image files are generated from keywords that visitors to the portals use in the search function here.
The feature is experimental in nature and should be considered and used as such. Its primary purpose is to give the community the opportunity to test the latest technology without further barriers or payment barriers. How you use the information provided by the AI is entirely your responsibility. We recommend always using at least a second source of information for verification. If you have any questions about the tool, please feel free to contact the community.
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We use this feature to give visitors the opportunity to rate the answer. The more downvotes an answer has, the more likely it is that a QnA will no longer appear in the overview. Watch the AI! The community is thus given an important role in the quality shearing process.
Notes on translations:
The translations are done by DeepL, another AI (Made in Germany).
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