Broker News, CFDs, Cryptocurrencies

Vantage FX Bitcoin Trading Now Available on MT4

Bitcoin Cryptocurrency

Vantage FX announced this month the addition of Bitcoin cryptocurrency to their MetaTrader 4 trading platform. In doing so, they have become the latest Australian regulated foreign exchange broker to add cryptocurrency trading to their clients.

We do realise this is the third post in a row we have done on cryptocurrencies. this is is a sign of increasing interest and popularity of the Crypto markets. However, we always aim to bring the latest news and offerings from the brokers listed at Online Brokers Australia, and hence why the last few posts have focused on the Bitcoin market.

Trade Bitcoin on MetaTrader 4

Many traders are turning to Bitcoin trading through a licensed Forex broker, rather than opening an actual bitcoin account. This is because the actual cryptocurrency account opening process, and executing a trade through 1 of the huge selection of cryptocurrencies exchanges can be difficult to understand and very time consuming. By choosing to trade Bitcoin with Vantage FX broker, you do not have to open a separate bitcoin account and can view bitcoin prices direct on the Vantage FX charts (rather than needing 3rd party charts). Simply fund your MT4 trading account and trade Bitcoin easily in one account with currency pairs, global indices or commodities markets.

By trading the Bitcoin CFD BTC/USD means that the trader will not be able to take delivery of the bitcoins, unlike in a Bitcoin exchange where they are delivered to the trader’s wallet.

Vantage FX bitcoin traders are able to go long, as well as short on the cryptocurrency pair BTC/USD. This means traders are not constrained in their bitcoin trading to only buy and hold trading strategies. The BTCUSD (Bitcoin CFD) leverage is initially set at 1:1.

The 1:1 leverage is also by design. David Billy from Vantage FX confirmed as a risk averse foreign exchange broker, VantageFX puts the safety of clients funds, as well as the company, at the forefront of everything they do.

Crypto markets are extremely volatile and so it is a conscious decision of theirs not to offer high leverage on Bitcoin. As always, we applaud brokerage firms that put the security of the brokerage firm and their client funds at the forefront of all decisions!

 

Vantage FX Bitcoin Specifications

Vantage FX Bitcoin CFD specifications

 
In offering Bitcoin (Bitcoin to USD), Vantage FX joins Pepperstone, AvaTrade, Plus500 and others offering Bitcoin trading to Australian traders. Read our full Vantage FX review for all ECN / STP and DMA CFDs offered by this Australian regulated broker.

Broker News, CFDs, Cryptocurrencies, Investing, Trading

Cryptocurrency Market Capitalization

Bitcoin Cryptocurrency

Cryptocurrency as an investment class hit a milestone in June (2017). The combined market capitalization (market cap), in Australian dollar terms, surpassed $100 billion! While bitcoin is the most popular and currently well known of all digital currencies, it is interesting to note that bitcoin, as at the end of June 2017, accounted for just over 44% (or around AUD 45 billion) of the total combined market cap of all cryptocurrencies.
 
You may now be scratching your head wondering if bitcoin makes up just over 44%, then what are the other digital currencies that heavily contribute to this combined $100+ billion AUD market cap? Below we have provided a list of cryptocurrencies by market cap (expressed in Australian dollars at the end of June 2017).
 

CryptoCurrency Market Capitalization Expressed in AUD

List of cryptocurrencies by market capitalization

  1. Bitcoin (BTC) – $45 billion (44.25%)
  2. Ethereum (ETH) – $31 billion (30.48%)
  3. Ripple (XRP) – $12 billion (11.80%)
  4. Litecoin (LTC) – $2.2 billion (2.16%)
  5. Ethereum Classic (ETC) – $2 billion (1.97%)
  6. NEM (XEM) – $1.7 billion (1.67%)
  7. Dash (DASH) – $1.3 billion (1.28%)
  8. Other – $6.5 billion (6.39%)

Source: CoinMarketCap

With the increased popularity and commentary on the cryptocurrency market, bitcoin in particular, we have noticed an increase in the number of CFD and Forex brokers either adding their first bitcoin product to the offerings (such as Pepperstone last week) or other brokers such as Plus500 which have recently added their fourth cryptocurrency CFD to their platforms.
 

Trading Cryptocurrencies with Contracts For Difference

In last weeks post we discussed Pepperstone Forex broker adding their first cryptocurrency bitcoin (BTC/USD) to their offerings.

Plus500 CFD service added Ripple (XRP) to their existing offerings in June 2017. Plus500 offer CFDs on the top 4 cryptocurrencies by marketcap. This allows traders to go either long or short on Plus500 Bitcoin, Ethereum, Litecoin and now Ripple XRP CFDs. Please keep in mind that Plus500 is providing contracts for difference (CFD) trading on the above digital currencies, which is leveraged and different to buying the currency outright.
 
If you currently own digital currency and wish to change to a different cryptocurrency please consider Changelly cryptocurrency exchange which has one of the most favourable rates.

Broker News, Cryptocurrencies

Trade Bitcoin at Pepperstone Forex Broker

Pepperstone Forex Bitcoin Broker

Pepperstone is proud to announce their first addition of cryptocurrency to their offerings. From July 2017 Bitcoin can now be traded at Pepperstone Forex broker. Pepperstone Bitcoin trading is offered as a leveraged instrument against the US dollar (code “BTC/USD” in Pepperstone’s trading platforms).

Cryptocurrency is often referred to as the money of the future and it’s global popularity is certainly being displayed in the current BTC USD price chart, however please remember that past performance does not guarantee the future performance of any financial instrument, Bitcoin included!

What is Cryptocurrency?

A cryptocurrency is essentially digital money (digital currency) used as a medium of payment or exchange and protected using cryptography to control the creation of additional units of the currency and secure the transfer transactions. Source: Wikipedia – Cryptocurrency

Pepperstone Bitcoin BTC to USD chart

What is Bitcoin?

Satoshi Nakamoto is the inventor of the first, and currently most well-known cryptocurrency called Bitcoin (BTC). Bitcoin became the first decentralized cryptocurrency (a decentralized digital cash system) in 2009, and since this time many alternative cryptocurrencies to Bitcoin have been created, and are commonly referred to as altcoins. Source: What is Cryptocurrency: Everything You Need To Know

The decentralized control, instead of a centralised banking system, is achieved via blockchain transactional database, acting as a distributed ledger.

We can delve deeper into the actual mechanics of Bitcoin in a future article, however for now we just wanted to provide a little context around the newest leveraged financial instrument being introduced by Pepperstone Forex broker.

Why Trade Bitcoin with Pepperstone?

  1. Traders can take advantage of Bitcoin’s large movements and volatility, without the need for an existing Bitcoin wallet or having to purchase actual Bitcoins;
  2. Bitcoin can be traded at Pepperstone with leverage up to 20:1;
  3. Receive institutional grade Bitcoin spreads & trade execution with no commission fees charged;
  4. Access BTC to USD (“BTC/USD”) easily from all of Pepperstone’s trading platforms; and
  5. Traders can hedge Bitcoin on a single Pepperstone account.

 

Risks of Trading Bitcoin

As with any leveraged trading, there is always risk to your capital as the the very nature of leverage means both the profits and the losses are magnified. Bitcoin is currently (2017) experiencing large volatility and movement in prices. While traders generally look for volatility to experience quicker price movement, if you are on the wrong side of the move, combined with leverage, this means not only is your capital is at risk but you can loose more than you have deposited.

Trading Bitcoin should therefore only be considered by experienced traders, who understand the risks involved and carefully read any PDS (product disclosure statement) and/or other offer documents provided by the bitcoin trading broker, in this case by leading Australian forex broker, Pepperstone Australia.

Equities, Investing, Trading

Never Turn an Online Trade into an Investment

Never turn a share trade into an investment

Host of the popular stock picks and market analysis program Mad Money, Jim Cramer, highlights a great point for traders and investors on the difference between online trading and investing. The quick answer: always understand why you entered a particular trade! You must be able to answer why you actually entered the position in the first place and is the premise for the investment or trade still intact?

James “Jim” Cramer (almost always referred to as Jim Cramer) is a former hedge fund manager and host of CNBC’s Mad Money and a co-founder of TheStreet Inc. Jim often asks his callers “why did they actually buy it in the first place?”. Is it for the purpose of an investment or part of a superannuation fund, or is it actually a trade?
There is a key difference!
 

Financial Trading and Investing

One of Cramer’s cardinal rules is to never turn a trade into an investment, and never confuse these two concepts.

Sometimes an investor will buy a stock for one reason, and then another reason happens. Then they decide to turn the trade into an investment and buy more as the stock goes down. Or perhaps the reason for the trade never happens, so they end up holding the stock.

“What’s the worst thing that can happen? The answer, of course, is plenty, and almost all of it bad,” Cramer said.

So, don’t fool yourself. If you know you purchased something for the purpose of trading, cut your losses quickly when it starts to go awry. Sure, there might be a time here and there where you could turn it into a long-term trade. But most of the time, you’ll be on the wrong side of the trade.

Source: Cramer clears up the key difference between trading and investing

The principles in the above article are important whether you are trading shares, contracts for difference on stocks, or any other financial instrument. Always understand the premise of the order you place and what is the next signal or event (irrespective whether you are a technical and/or fundamental trader) to take further action on the trade.

Broker Offers

TradeDirect365 Signup Bonus

I’m pleased to announce Online Brokers Australia has an exclusive bonus, with very few conditions (* see below) for anyone opening a new account with TradeDirect365 during the last week of July 2015. I have highlighted this as TradeDirect365 are not a broker that always has promotional offers available, and this one is exclusively provided courtesy of Online Brokers Australia via the links below…

Receive a $30 Welcome Bonus when you open and fund a new account with TradeDirect365 before 31st July 2015

Click HERE to open an account and claim your TradeDirect365 bonus

We are highly impressed with TradeDirect365 and our full review can be viewed here. Trade Direct 365 offers a strong, simple and efficient trading platform, as well as a far cheaper trading cost to traders.

The real difference is brought to the company by their CEO Davin Clarke, who clearly understands the features and functionality that are important. Davin has over 12 years of experience as a full time professional trader, earning his primary income through trading. Davin has extensive experience in trading shares, futures and foreign exchange markets both in Australia and other global markets. His key specialties are FX markets, DAX and SPI trading, which really shows in TradeDirect365’s quality, and best priced products I’ve seen for DAX, SPI and ASX share CFD traders.

TradeDirect365 Advantages
Click HERE to find out more about TradeDirect365

* July 2015 $30 Welcome Bonus for New Accounts Promotion Terms:

  • Promotion closes 31st July 2015
  • Only applies to new clients, referred by Online Brokers Australia opening a live account.
  • One A$30 welcome bonus per household.
  • Clients must deposit a minimum $500 into their account and place a trade before the end of August 2015.
  • Bonus will be applied after the first trade and can be withdrawn after 30 calendar days from the first trade.
  • TradeDirect365 reserves the right to make this promotion unavailable to clients considered to be abusing the promotion by any means.


TradeDirect365 CFD trading reviewed | cheapest fixed spreads

 
RISK NOTICE:
Contracts for Difference (CFDs) are a complex, leveraged financial product and requires a certain level of experience, so may not be suitable for everyone.
CFD trading carries a high level of risk to your capital and can result in losses that exceed your initial deposit. Please ensure that you understand all the risks involved.
If you are considering acquiring any financial product you should obtain and read the relevant Product Disclosure Statement and/or other offer document/s prior to making any financial decision.
If you are unsure of the risks, or have any doubt whether you have sufficient financial resources or experience to trade these products, you should take professional advice before trading.

 

Economy, Interest Rates

Reserve Bank of Australia Balancing Act

How will the Reserve Bank of Australia (RBA) balance the risk of a Sydney housing “bubble” against the otherwise sluggish Australian economy?

Yesterday (Monday 1st June, 2015) Treasury Secretary, John Fraser, declared that Sydney and parts of Melbourne were “unequivocally” a residential property bubble. He not only warned of a bubble but said there was unequivocal evidence that one existed. This is one of the strongest official warnings I’ve seen of a Sydney, and potentially partial Melbourne, property price bubble, however, it must be noted that this is not representative of the rest of Australia’s property market at the time of writing.

These comments follow comments by Greg Medcraft, the usually reserved chairman of the Australian Securities and Investments Commission (ASIC), a couple of weeks ago with warnings about a housing “bubble” in Sydney and to a lesser extent Melbourne.

The RBAs balancing act comes as all other economic signals indicate further rate cuts are more than just a possibility this year, however further cuts to the historic low interest rate may continue to fuel this Sydney residential housing “bubble” at a time when personal debt levels are also at very high levels again.

Interest rate changes are considered a “blunt” monetary policy instrument and therefore the RBA will have to consider the broader Australian economy, as they can’t laser target particular areas of the economy with interest rate changes.
 

So what will they do at today’s RBA rate meeting ??

I don’t believe the RBA will drop interest rates at todays June 2015 rates meeting however, given the following economic conditions I do believe we will see a further cut to the historic low rates before the end of 2015

  • the continuing sluggish Australian economy
  • sharp declines in resource-related capital expenditure
  • business investment in Australia contracting at its fastest rate in more than five years and no signs of improvement any time soon (The latest Australian Bureau of Statistics (ABS) Capital Expenditure Survey revealed total real capital expenditure fell by 4.4% and resource-related investment plunged nearly 14% compared with the same time last year. In addition, UBS chief economist Scott Haslem described the latest estimate of investment plans in Australia as “recessionary”, after being “bleak” last time)
  • continued increased unemployment levels which do not appear to have peaked as yet
  • subdued inflation figures and
  • an Australian dollar which although nowhere near prior highs (as I write this article the AUD is a little above 0.76 cents), is still likely to be higher than the RBAs preferred levels.

As always we don’t have a crystal ball however, I do strongly feel the RBA will leave rates on hold today and continue to monitor the effects of prior rate cuts and broader economic factors before the next move on the Australian interest rate.

Economy

Federal Budget 2015 Winners and Losers Ultimate Resource

Are you one of the winners or losers from this year’s budget?

This years federal budget is more subdued than last year’s budget, with small business and national security being the big winners.

Below is the complete source of Australian Federal Budget 2015 reference documents you need to understand Treasurer Joe Hockey’s second budget, and breakdown who are the winners and losers.

Australian Government Budget Official Web Site: includes Transcript of the Treasurer’s budget night speech, overviews, full budget papers, archive of past budgets and much more.

Budget 2015 Winners and Losers: Great visual representation of the 2015 budget winners and losers.

AFR Federal Budget 2015: The Australian Financial Review’s article summarising the winners and losers.

Budget 2015 Cheat Sheet – What you need to know: An excellent article which includes plenty of charts and tables to easily highlight key areas including:

  • Underlying Cash Balance
  • Government Revenue
  • Government Spending
  • Australian Economic Outlook
  • Debt Position.

SMH “Your five-minute budget summary”: Summary of the key budget elements.

AFR Budget Explorer: Take a trip down memory lane with the Australian Financial Review’s interactive Budget Explorer graphic.
Explore this interactive graphic to “see how Labor and the Coalition have managed the federal budget during the past three decades; the economic challenges they have faced; and the reforms they have put in place”. SOURCE: Australian Financial Review

 

INFOGRAPHIC: The budget winners and losers   SOURCE: The Conversation
Budget 2015 Winners Losers Infographic Source: The Conversation
SOURCE: The Conversation

Please let us know if you’ve found some other quality articles and links in the comments below.
 

Australian Federal Budget 2015 Winners and Losers

Economy

What would a Greek default look like?

While Greece continues to struggle to secure a deal on it’s debt obligations, Standard & Poors today (16th April 2015) have further downgraded Greece’s long & short-term sovereign credit ratings to ‘CCC+/C’ from ‘B-/B’, citing worsening economic conditions due to prolonged negotiations between the government and creditors.

“Without deep economic reform or further relief, we expect Greece’s debt and other financial commitments will be unsustainable,” S&P said.

While Greece denies it’s about to default on it’s debt obligations, the CNBC article below looks at what a Greek default may look like…
http://www.cnbc.com/id/102584164

“I think default is inevitable,” Michael Hewson, chief markets analyst at CMC Markets, told CNBC Tuesday.

“Whatever happens, even if they agree some tranche of aid for Greece, its economy is not going to achieve the rate of growth it needs to start paying down the debts. There is no prospect of Greece not defaulting, in my view, and if markets don’t realise this they’re living on another planet.” Source: CNBC

Image Credit: Aris Messinis | AFP | Getty Images

Interest Rates

ASX RBA Rate Indicator

Reserve Bank of Australia

The RBA Rate Indicator shows market expectations of a change in the Official Cash Rate (OCR) set by the Reserve Bank of Australia (RBA). The indicator calculates a percentage probability of an RBA interest rate change based on the market determined prices in the ASX 30 Day Interbank Cash Rate Futures.

What is the RBA Rate Indicator saying today?

As at 9 January 2015, the ASX 30 Day Interbank Cash Rate Futures February 2015 contract was trading at 97.540, indicating an 18% expectation of an interest rate decrease to 2.25% at the next RBA Board meeting. There is also an 82% expectation of “No Change” at the next RBA Board meeting. Source: ASX
The next Official Cash Rate announcement will be on the 3rd of February 2015.

The table below highlights how market expectations of an interest rate decrease at the next RBA Board meeting (February 2015) has evolved in recent days prior to 9th January 2015.

Trading Day No Change Decrease to 2.25%
30 December 78% 22%
31 December 78% 22%
2 January 78% 22%
5 January 80% 20%
6 January 80% 20%
7 January 78% 22%
8 January 80% 20%
9 January 82% 18%

Source: ASX

Reserve Bank of Australia | ASX RBA Rate Indicator

Calculations for ASX Target Rate Tracker (Based on 30 Day Interbank Cash Rate Futures)

The expectation of a rate change by the RBA is calculated by taking into account the number of days the RBA Target Cash Rate is known versus the number of days in the month that it is unknown ie: the number of days before and after the RBA Board Meeting. By incorporating this time factor into a probability equation the following formula can be used to determine current market expectations on whether or not the RBA will change the Target Cash Rate:

rt * n b + {r(t + 1) p + rt(1 – p)} * na = X

Solve for p, where:

p = probability of rate change
X = current yield on 30 Day Interbank Cash Rate Futures
rt = current known Target Cash Rate (%)
r(t + 1) = expected new Target Cash Rate (%)
nb = fraction of month where target rate is known (ie: before RBA official rate announcement), eg: 2/31 for December 2003
na = fraction of month where target rate is unknown (ie: after RBA official rate announcement), eg: 29/31 for December 2003

Source: ASX