International Banking and Finance

Summarization of Internet Trading Game

The ideal finical instrument of trade is determined by various factors. Starting with the number of resources the number of resources one has will indicate to great extent the type of instrument to trade, therefore forex has always been on offer where significant amount of companies leverages it .with the availability of a wide range of information about different currencies and with its low liquidity rate, forex became the best financial instrument to use .Performing thirteen different transaction simultaneously with different paired currencies including the GBP/USB,JPY/USD,NZD/USD, CAD/USD.

With unpredictability of economy due to the occurrence of the pandemic (corona virus), most countries economy are note stable leading to high volatility in stocks which has led to a loss of 19. 45GBP.Ths would have been worse if the risk management protocol was not initiated (Coskun, 2016). By using strategies such as stop lose take profit, considering the one percent rule and others as discussed below.

Introduction to Internet Trading Game

By using variety of currency to trade in the market, we increase the chances of gaining money, through making money by risking money by looking at the currencies which are moving. In such a case User preference is mostly recommended when it comes trading different pair types of currencies, single or multiple pairs have their own volatility. Hence, it is so risky to use one pair of currency alone to trade, this will require more attention to monitor the ever changing conditions .in case of a single pair of currency the user has to trade when it is trending, choppy and even when it is quiet. It may be beneficial if u master the art, most preferably using of multiple trade currency to increase these of gaining profit and reduce risk as demonstrated by the diagrams n the appendix.

With increasing need to cut down the losses attained by traders need to find a risk management and strategies (Hasan, 2015). Since a trader with a substantial profit can lose it through one or two trades, the only way to overcome this undesired outcome is to plan. Putting into consideration the one percent rule traders like me have come to realize, by doing centrally to this you putting you capital or trade account at a high risk of getting lost. For instance, using 8,061 .69pounds at least 80.61 pounds should be your maximum stake for a single trade. By 19.45 pounds in total of 13 transactions, I was taking precautionary measures to avoid a bigger risk of losing my money.

Nevertheless, with the ever changing economy currencies are prone to changes hence every trader is prone to get a loss rather by use of stopping loss and taking profit a trader can save by selling when the volatility of the currency has gone below a key support level (Cannington, 2016). This held the trade from going to a point of no comeback. On the other hand, trader may want to take the profit on the trade by selling a stock, limiting the addition upside when the risk occurs. This is more evident in the transactions I have conducted. Not forgetting the bottom line, by knowing when to enter or exit in order to know when to execute the trade.

General Sun Tzu's a former famously Chinese military personnel stated that “Wining of a battle deeply depends on the planning done before the fight. Which means planning and strategizing do not win battle instead wars. Likewise, traders who have succeeded in trading often use the phrase “trade the plan just the way you plan your trade, failure in doing so during war can easily be determined by the preparations and planning.

Ever evolving market places, online trading platforms have brought up many ways of engaging different participants through marketing and dung business. Work load has been eased and brought close to the feet of our doors and closeness of our eyes. A lot of businesses are conducted through the platforms. With variety of financial instruments clients and user have unlimited option of resources to choose from during trading. Such instruments include forex, derivatives, equities and so much more. Whether in a small business owner, institution player; looking to venture in wide variety of portfolio, this platform has come to eases the market accessibility, limited transaction cost, liquidity, availability of leverage and opportunity.

What has its good never lacks bad/evil, Online trading specifies easy markets some its demerits are: Online trading being marketed 24hrs a day 5 days a week, user have grown fond of it to an extent is an addiction to them. It has become a gamble between what the users who have shifted to trading. Uncertainty of the market and ever growing user of online trading price and volatility is high since the demand is too big for same product leading to competition, due it being a member of larger volumes plus participation in the market to virtual trading, timed volatility in pricing have increased its frequencies and magnitude. For example, the emergence of a pandemic such as corona may spike traders to sell and buy stock leading to high volatility which was not anticipated. The question that remains in trader’s head is the market going to fall (Cannington, 2017)

Cybercrimes related issue have emerged in financial world since the beginning of exchange. Criminals have evolved to cybercrimes since it is easy to manipulate data and acquire information about a user who are eager to make money, virtual trading is not left behind. The ideology of “get rich quickly “through online trading, abandoning simple rules such as analyzation and manipulation of market are always present in the trading systems. A wide majority of traders who have not succeeded in the online trade have been victims of such situations.

Online trading has merits likewise has its demerits, by exploiting the topics discussed by this articles. While online markets of recent past give a wealthy of chances, likewise they provide an extensive risk. This lives the ball in the hand of the trader to think if the merits outweigh its demerits, and if virtual trading is best suite of action considering the risk and capital. Third party sites such as opinions, research, news, prices, analyses and so much more are considered as general market commentary and are not considered during investments. FXCM is not responsible of any damages or losses incurred during directly or indirectly form use or depending on such information.

In order to archive an active trading ideology several methods are put into practice, every one of them with relatable market environment and never forgetting the risk involved in market trading. Day trading being one of the most common and a well-known active style (Davis, 2020). This is a type of trading where an individual trade by selling and buying stock on same the name day suggests. This type of trading was mainly conducted by the professionals or marketer there is well demonstrated in research where my transaction has been conducted over the same day.

Most famous and quickest ideology involved in trading is scalping. By utilizing various loopholes caused by prices and bid ask spread (David, 2020). Generally, the ideology of trading involves by making the spread or purchasing bid price and selling at the ask price to get the difference between relative price points. Some shorter time scalpers reduce the chances of get a risk related with trading ideology/ strategy. Scalpers like markets which are not involved in sudden price movement most preferably the quiet ones to potential repeat the spread on same bid ask prices

Like scalping the swing trading usually waits for the time the sequence if done before it pics a new sequence the trade sells and buys stocks during such short windows. Both the scalpers answering trading needs serous supervision of current markets for loop holes (Eakins, 2015). Using all the stipulated strategies, taking no risk by using risk management trading option. After monitoring the stocks and international news regarding economic, it would have been suitable to start buying and selling of stocks, with at most care and analysis of the ever changing currencies. Selling at least currencies of different type would have resulted to a better result unlike the loss I underwent after running thirteen simultaneous transactions.

Currency rates are ambiguous to predict; with the short time they take to seldom work. Economic conditions do shape long term trends which are seldom useful to short term. A fairly wealth country such as Australia, that is small and frequently depending of mining and agriculture. With lack of manufacturing industries Australia has made it hard for business to compete with its high interest rates. Putting that into consideration, their currency(dollar) is most likely trading on ground such as commodity prices, majority of Asian health resources importers and their high rates in their interests. With a stiff competition from Chinese yuan raisin its domination in the region, Australian state economy should be concerned about Australian dollar.

Having such a large some amount of money in your account acting as a demo for trial of money trading may bring a lot of impulsive purchase without considering the fact that it might be a true account. Transaction conducted should be based on currencies or another relatable financial instrument. As demonstrated in the diagrams below

In conclusion online trading is an easier way of monitoring economical change of various countries in context to their currencies (Albu, 2016). Forex trading if a good adventurous field to be exploited for job creation, unlike any other job online markets should be handled with care since fraud has boomed in the recent use of right means and being up to date with the ever changing economy of different countries specifically target for trading, it is easier to be able to trade. Risk taking is a challenge for most individuals, but where there is risk there is a potential of generating income hence it is good idea to be ventured into. So they say news flow affect trend in currency exchange, therefore in times of crisis like the current situation being faced by the world it should be considered to be of highest risk during trading which can result in volatility of currencies.

References for Internet Trading Game

Albu LL, Lupu R, Calin AC (2015) Interactions between financial markets and macroeconomic variables in EU: a nonlinear modeling approach

Connington, J., 2017. Are Markets About To Topple And Crash: Five Key Measures. [online] The Telegraph. Available at: <> [Accessed 24 January 2018].

Coskun Y (2016) Fundamentals of market discipline and custody risk management. Journal of Securities Operations & Custody 8: 163-175

Hasan MA, Wadud MA (2015) Testing Semi-Strong Form Efficiency of Dhaka Stock Exchange. Journal of Business & Economics 7: 213

Mishkin, F. And Eakins, S., 2015. Financial Markets And Institutions, Global Edition. 8th ed. Edinburgh: Pearson Education.

University of California, Davis. "Do Individual Day Traders Make Money? Evidence from Taiwan," Page 9. Accessed Mar. 5, 2020.

Connington, J., 2017. Are Markets About To Topple And Crash: Five Key Measures. [online] The Telegraph. Available at: <> [Accessed 24 January 2018].

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