Kodimax | Education
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Education

TRADING

HOW TO TRADE:

You will discover that our trading platform is a very simple way to speculate on the financial markets compared to other forms of investments. Consequently, you will have improved possibilities of making worthwhile and consistent profits by trading them. In particular, if you become a member of Kodimax then you will have the opportunity to gain as much as 87% profit per trade within an hour, even if you are a total novice.
You can increase your profit potential even more and minimize your risk exposure at the same time if you invest your time to study and master CFD option trading strategies. This article
introduces and discusses some of the more popular strategies which you’ll find great use for whether you are a novice or experienced CFD options trader.

PAIRING:

Also known as hedging and double position, this is a clever strategy which possesses the ability to provide you with a windows of opportunity for high returns while minimizing your risk exposure throughout the process. For example, imagine that you have opened a ‘call’ CFD option which had an opening or strike price of $20. Now assume that you have achieved a favorable position and are now in-the-money with the current price standing at $24. However, you are worried that a serious price retraction could occur which could wipe out all your profits and could even cause losses. To safeguard your gains from such an eventuality, you could, at this point, open a new ‘put’ option and pair it with your original ‘call’ one.
By doing so, you would create an opportunity window between $20 and $24. This is because if the price finishes within this range at the expiry time then you will receive profit payouts from both options. In addition, you would also significantly reduce your risk exposure because should the value of the price finishes outside this window at the expiry time then the profit of one of your options will almost totally negate the loss of the other.

STOP-LOSS TRADING:

Many traders use CFD options as a method to hedge their investments with other asset types because they have been proven to be very effective. For example, consider that you are trading the EUR/USD currency pair and you are considering utilizing a stop-loss in order to protect your account balance from suffering a serious drawdown. Instead of deploying a standard stop-loss, you could instead activate a CFD option in the opposite direction to your Forex trade by using the EUR/USD as its underlying asset. By doing so, you would provide a very effective protection for your EUR/USD trade.
However, although a stop-loss trading strategy looks quite simple at first sight, a successful one depends on the quality of your understanding and knowledge about factors such as risk
tolerance, trading asset, and your trading style and market conditions.

INDEX-ASSET DIVERGENCE TRADE:

This is another popular strategy that entails hedging a CFD option based on a company’s shares with one whose underlying asset is the trade index that includes the same firm. For example, imagine that you decide to open a ‘call’ CFD option with Apple because you think the value of its shares will rise in the near future. In order to hedge this trade and if you also believe that the stock markets will generally fall in value, you could also consider activating a ‘put’ CFD option based on the S&P500 of which Apple is a composite company.
Consequently, this strategy will help you minimize your risk and allow you to support your trust in trading your selected asset. In addition, you could provide yourself with the opportunities
to compound your profits, maximize your returns and minimize your risk exposure. For instance, with the example just described you could achieve a double profit pay-out when your calculations is proven correct.

COMPETITOR RELATIVE VALUE TRADE:

This strategy can help you profit using CFD options by exploiting the opposite price movements of two competing companies. For example, imagine that Microsoft is about to release a new product that is expected to provide a significant boost to the values of its shares.
In addition, you also deduce that rivals, such as Apple, could suffer market share decrease which will have f negative influences on the values of their shares. Consequently, by following your fundamental and technical analysis to the fullest you should open a ‘call’ CFD option with Microsoft and a ‘put’ one with Apple.
This action will then provide you with the opportunity to collect double profits by taking advantage of the competitor relative value trade.

COMMODITY STOCKS AFFECT TRADE:

Many traders consider this to be a very powerful and effective CFD options strategy. Basically, the idea is to exploit the variance in the movements of commodities on the share values of companies that trade them.
For example, significant movements in the price of aviation fuel can seriously influence the share values of airline companies. Consequently, if you believe that a spike in the price of aviation fuel is imminent then you could consider activating a ‘call’ CFD option with this commodity as its underlying option. In addition, you could hedge this trade by opening a ‘put’ CFD option based on the shares of an appropriate airline because you are anticipating them falling in value as a consequence of this development.
In summary, if you take your time to evaluate CFD options strategies such as those described above then you will find that this is a rewarding undertaking that could significantly boost your profits. This is because you can then provide with opportunities to compound your profits within the same time frame whilst minimizing your risk exposure in the process.
You will find by analyzing Kodimax CFD options trading platform that it has been specifically designed with this purpose in mind. You will be very impressed about the quality and quantity of the impressive trading strategies and tools which are available to all Kodimax clients especially.

The following CFD options strategies will now be explained with this intent in mind. They should help you improve your trading results under a number of different market conditions:

BULL STRATEGY:

You will require such a strategy if you determine that the price of the underlying asset of your CFD option is rising in value. You should then activate a ‘call’ CFD option under these circumstances.
For example, your technical analysis indicates that oil is very likely to increase from its current value of $110 over the short term. You are also aware that you will be entitled to an 87% profit if you open a ‘call’ CFD option with Kodimax using oil as its underlying asset. In addition, you also precisely know your risk exposure because if you finish out-of-the-money, you will receive a refund between 10% and 15%.
You next choose to deposit an investment of $1000 and opt for an expiry time of 30 minutes. That is it? These are all the decisions that you have to make. Now, when your expiry time expires and if the price of oil is just $1 higher than your opening or strike value, you will earn a profit of $780 in just 30 minutes.
This is a fantastic return for what appears to be a small risk exposure and with minimum effort. However, like any investment decisions you must ensure that you fully understand your objectives and risks before activating any new trades. In this respect, your goals and risks are well-defined as compared to other investment types. In summary, despite all benefits of trading using CFD options, you should always work and adhere to a well-developed trading strategy.

BEAR STRATEGY:

You will require such a strategy if you determine that the price of the underlying asset of your CFD option is falling in value. You should now activate a ‘put’ CFD option under these circumstances.
For example, your technical analysis indicates that the EUR/USD currency pair is very likely to decrease from its current value of 1.4000 during the next few hours. You are aware that you will be entitled to an 87% profit if you open a ‘put’ CFD option with Kodimax using the EUR/USD as its underlying asset. You also know precisely what your risk exposure is because if you finish out-of-the- money at expiry time then you will receive a refund between 10% and 15% of your initial deposit.
You next choose to invest a deposit of $2000 and opt for an expiry time of 1 hour. Now, when your expiry time expires and if the price of EUR/USD is just 0.0001 below your opening or strike value, you will earn a profit of $1560 in just 1 hour.
After you have mastered the basics of CFD options trading and are proficient at operating simple strategies such as the bull and bear ones just defined, you could consider learning how to use more sophisticated strategies such as the following one.

How It All Started

The modern age of digital currencies began when Bitcoin was released as the very first decentralized digital currency.  Until the release of Bitcoin, any digital currencies had been centralized, but Bitcoin changed all that.  Rather than being controlled by a single source or company, Bitcoin is created and stored in a peer-to-peer networking system and relies on what is supposed to be secure cryptography for its creation through the use of digital signatures known as blockchains.The idea of digital currency actually came about as far back as 1982 in a research paper published by cryptographer David Chaum.  He also formed the very first digital cash company called Digicash in 1990, but it was an idea ahead of its time and the company filed for bankruptcy in 1998.

Although there have been concerns put forward regarding the creation and use of digital currencies by illegal and terrorist organizations, the movement has more recently been gaining additional support and there are now several countries and global companies who are exploring the use of blockchain technology and cryptocurrencies for use in a variety of applications.

  • Bitcoin – As mentioned above, Bitcoin was the first decentralized digital currency and the very first Bitcoin was mined, or created, in 2009. The actual identity of the creator of Bitcoin is unknown, but it was released under the name Satoshi Nakamoto, which is a pseudonym for the programmer or group of programmers who introduced Bitcoins.  The Bitcoin system is a peer-to-peer decentralized system, with transactions occurring directly between individuals.

 

New Bitcoins are created through the process of mining, in which distributed computers around the world solve each block in the blockchain system. As a block is solved a new Bitcoin is added.  The system adjusts the difficulty of solving blocks every 2016 blocks, making each additional Bitcoin more difficult to be mined or created.  In this way Bitcoin has an artificial scarcity that has helped increase the price of Bitcoin dramatically since its inception.  There will only ever be 21 million Bitcoins created, which is expected to be accomplished in 2140 or thereabouts.

The price of Bitcoin has increased dramatically since its inception, but it is also considered to be extremely volatile.  In 2011 the value of one Bitcoin dropped as low as $0.30, but as of mid-2017 the value of one Bitcoin is roughly $2,400.  On 13 August 2017, Bitcoin hit an all-time high of $4,200. It has been estimated that Bitcoin’s price is 7 times as volatile as the price of gold, 8 times as volatile as the S&P 500 Index and 18 times greater than the U.S. dollar.

  • Ethereum–Ethereum is another decentralized digital currency, but is also a computing platform developed for its scripting functionality. It is quite new, having gone live on July 30, 2015 with a value of $1 per Ether coin.  The value of Ethereum has recently skyrocketed, nearly hitting $400 on June 14, 2017, but has since pulled back and trades around $240 per Ethereum coin as of mid-July 2017.

One interesting fact about Ethereum is that many corporations, financial institutions and even governments have begun developing their own systems and programs based on the Ethereum protocol.  This could be very positive for the currency, as broad adoption would be sure to increase the value of Ethereum.  Another factor of note is that Ethereum is currently seeing double the processed transactions when compared with Bitcoin.

Unlike Bitcoin, there are no plans to cap the number of Ethereum, however there are plans in place to reduce the growth (and hence inflation) of Ethereum between 0.5% and 2.0% by changing the verification of new Ethereum blocks to a proof of stake rather than proof of work.

Anyone interested in digital currency trading should certainly keep their eye on Ethereum as it promises to be vital to the growth of the digital currency economy.

  • Ripple – Ripple, with a market capitalization of more than $6.5 billion, is currently the third largest digital currency by market cap, eclipsed only by Bitcoin and Ethereum. That by itself should be enough for traders to keep their eye on price movements of the Ripple cryptocurrency.  With more than 38 billion coins, called Ripples, in existence, the value of the Ripple is quite lower when compared to other major digital currencies, topping out around $0.42 per Ripple in May 2017 and trading at just $0.238 per Ripple in mid-July 2017.

The original Ripple protocol was developed as far back as 2004 and was released as Ripplepay.com in 2005 as a financial service to provide secure payment options to members of an online community via a global network.  The current version of Ripple was developed in 2012 and was released in 2013.

Ripple differs in that it is a real-time settlement system, currency exchange and remittance network.  The Ripple network supports tokens that represent fiat currencies, other cryptocurrencies, commodities, and even frequent flyer miles or mobile plan minutes.  It is increasingly being adopted by banks as they feel it has a number of advantages over cryptocurrencies like Bitcoin, including price .  Large banks are using the Ripple protocol include UBS, Santander, and most recently SCB in Thailand.

Because of its ability to conduct transaction free cross-currency exchanges, Ripple bears watching by traders and investors.  It can be especially useful as a bridge when there is no market for a specific currency in that it will seamlessly convert any asset to the desired payment currency.  This could make the Ripple a very valuable digital currency soon.

  • Dash–Dash has undergone several changes in its lifetime, and was once known as Darkcoin and also Xcoin. It should also not be confused with a similar digital currency known as Dashcoin.  Dash is similar to Bitcoin in some respects, but it has been engineered to use two-tier architecture in its network to provide additional features and added safety.  Users of the Dash cryptocurrency enjoy both private and instant transactions.  Dash is also the first decentralized autonomous organization, with the first Dash currency created on January 18, 2014.

Dash has grown to a market capitalization of roughly $1.5 billion and has 7.42 million coins currently in circulation.  With a Dash coin currently worth $193.46 it is off a recent high of $209.77, but appears to be trending higher in the long term.  There is a daily turnover for Dash of over $100 million, making it a popular alternative to Bitcoin and other digital currencies.

Traders who are interested in Dash should be aware that this digital currency has one of the most active communities of any altcoin (the term altcoin is used to refer to any of the digital currencies other than Bitcoin).  Activity on the BitcoinTalk forum has reached more than 6400 pages, 133k replies, 7.9M reads.  This active community should certainly be one source of news and information that is constantly monitored by traders of Dash.

  • Litecoin – This digital currency was created as a fork of Bitcoin, and as such is very close in nature to the original digital currency. There are some differences however, such as almost zero payment cost and payment transactions occurring approximately four times faster than Bitcoin.  Litecoin was created in October 2011 by a former Google employee named Charlie Lee.  Litecoin has been a success since its inception and currently has a $2.5 billion market cap, with 51.9 million coins worth around $5 each in circulation.  Litecoin hit a high of $55.46 per coin on July 5, 2017 before pulling back, although the overall trend is higher for the digital currency at this time.

Litecoin processes blocks about four times faster than Bitcoin, and is set to release a total of 84 million Litecoins, again four times the number planned to be released for Bitcoin.  This will give Litecoin an artificial scarcity that should keep the price of Litecoin trending higher as it becomes increasingly difficult to mine the remaining Litecoins.

As one of the major digital currencies in use, Litecoin has a daily turnover of more than $130 million, traders should certainly keep an eye on Litecoin to monitor price movements and changes in market sentiment that could provide trading opportunities.

The Cryptocurrency Market

Even though the cryptocurrency market is just 8 years old, already it sees trading volumes exceeding $100 billion as of June 2017.  All that trading comes from over 800 different digital currencies, with more entering the market every month.  There is vast opportunity here for those willing to accept the risk of jumping into new markets.  Because of the volatile and rapidly changing nature of the cryptocurrency markets, prospective traders should do their own research regarding current trading volumes, active digital currencies, and opportunities in the markets.

Digital currency investors may benefit from the fact that these currencies are not tied to any central bank or single country.  This means they can be traded with ease 24 hours a day, 7 days a week, and 365 days a year.  One caution for traders who are new to the cryptocurrency market is that these digital currencies move based on different factors than you are used to with traditional currencies.  Rather than reacting to central bank policy and the economic strength of a given country, these currencies react to cyber-events such as hacking, or the release of new technologies.  And because the market capitalization of most digital currencies is quite small they can also be influenced by individual investors.

Imagine buying a $100 million USD position.  Certainly, it’s a large position, but it isn’t large enough to be noticeable in the billions of dollars of daily USD transactions.  This isn’t true for any of the digital currencies.  A $100 million position would be larger than the daily trading volume for all, but the largest, and such a position would likely have a huge impact on the pricing and volatility of the underlying digital currency.

The cryptocurrency market is growing rapidly but is still small compared to the global currency market.  This factor can be attractive to traders as they are on the forefront of trading in these new markets.  The only important factor to keep in mind is to remember the risks associated with trading in new and volatile markets and understand that losses can come just as fast as profits or even quicker.

 The above figures are not up to date. Please conduct your own research.

Global Market Schedule

These are the trading hours (GMT) for all the major global markets:

The Forex Market

The Forex market is the only 24-hour market, opening Sunday 10:00 PM (22:00) GMT, and running continuously until Friday 10:00 PM (22:00) GMT. If you live in New York (GMT-5) daily trade starts at 5:00 PM (17:00) local time and ends at 5:00 PM (17:00) the day after. Please be advised of the potential for illiquid market conditions particularly at the opening of the trading week. These conditions may result in smaller returns for some currency pairs based on market liquidity.

The Forex Day

The Forex day begins with the opening of Sydney’s Forex market in Australia at 10:00 PM GMT, and ends with the closing of New York’s market, a day after at 10:00 PM GMT, the market then immediately reopens in Sydney. The primary Forex markets, in the order of their opening times, are Sydney, Tokyo, London and New York. The Forex Market provides 24 hour access to trading opportunities, but the best time to trade is in those periods when different market trading hours overlap, as liquidity increases significantly. This tool allows the trader to know which are the periods when two My Forex trading sessions are overlapping.

The opening and closing times impact when you must close your day trades, and it is important to remember that a Forex day does not correspond to a calendar day. For example, if you are living in London (GMT), open a position at 9:30 PM then close it at 10:30 AM, your trade goes from one to another Forex day and a rollover/swap will apply. If you open a position at 10:30 PM and close it the next day at 11:00 AM, your trade is closed within the same Forex day and no rollover/swap will apply.

Stocks Trading Times

Stocks are only available to trade when the exchange that they are traded on is open. So for example if you wish to trade Apple stock that is traded on the NASDQ exchange in New York it can only be traded when the NASDAQ is open for trading.

CRYPTOCURRENCIES

While currency in one form or another has been around for millennium, up until the 21st century it has always been in a physical form. That form may be coins, bars, or even paper currency, but there has always been a physical representation of the currency we use in our daily life to buy goods and services.  Everything changed in 2009, when Bitcoin was released as open source software that is used to create a digital currency.  A digital currency, also known as cryptocurrency, is created through the use of specialized software and is stored only in a digital form on computers and servers throughout the world.  Since then many other digital currencies have come on the scene, with even more appearing on a monthly basis.  Yet Bitcoin is still the king when it comes to digital currencies – at least for the time being.  Read on to learn more of the history behind digital currencies and the details behind some of the most popular digital currencies.