What is Direct Market Access (DMA)?

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Direct market access describes a trading pattern which involves, a trade been placed online by you, and then your order is forwarded directly to the stock exchange for execution. You may be amazed to find out that this is not how online trading always works, but as a matter of fact DMA has only been made available for retail investors for a short period of time. In most markets, a large number of brokers don’t make use of it.

In the ancient way of placing a trade, you send an order to your broker by making use of a telephone and a then requests a quote from the market maker for that order. A market maker is a firm that is always ready to buy Or sell a stock: Its quote displays both a bid price and an offer price at all points in time and an aim to make profits from the difference between both of them. This difference is called the bid/offer spread or the bid/ask spread.

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Neural Networks

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Learn how to trade by making use of Neural Networks

Recently there has been a lot of buzz around Neural Networks in the trading markets. Packed with extremely powerful computing ability and bandwidth neural networks have the potential to allow systems used in trading evolve and learn in real time. Let’s take a brief look at neural networks.

Definition of Neural Network

It is simply defined as a computation model that imitates the way the human brain functions by computing extremely large amounts of data entered into the network to predict the possible outcome.

In technical terms, neural networks used in trading are usually data analysis protocols containing a very large amount of processing modules all intertwined through estimated probabilities.

It can be used in machine learning and pattern recognition which is naturally adaptive. When used in the right way, neutral networks learn by examining the results from previous steps.

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MiFID II Impact on Forex Market

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January 2018, (Markets in Financial Instruments Directive) MiFID II was implemented in Europe and this has spurred up a debate about how MiFID II has impacted the Forex Market.

Before we talk more on the Impact of MiFID II on Forez Markets, it is monumental that we have a proper understanding of what the MIFID was and why it calls for a change. When the MiFID was first announced and introduced, the program brought about a major rift in the cash equity markets.

In 2007, the program started monitoring financial institutions in the UK and EU. At this time the Brexit occurred, and the MiFID was forced to adapt to changes.

The goal was to get rid of cross-border financial services barriers, just like other barriers thrown out alongside Eurozone and the creation of the common currency. The Aim was to develop a marketplace with the highest level of transparency, one that is not only balance but also safe for all.

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Technical analysis in Forex trading

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Involves the review of previous prices in order to be able to predict future prices. Technical analyst concentrate only on the exchange rate between two currencies, because they are of the opinion that it represents the true state of the market at any point in time. Price chats are used to arrange price fluctuation into patterns that can easily be recognized. Candlestick represents the fundamental price pattern which often used for technical analysis. A single candlestick represents a summary of all trading decisions by all forex traders during the period the candlestick was being developed. There are different reasons that guide the decisions taken during the formation of a candlestick, however, what is of paramount importance is that the net outcome is recorded in an open, close, high and low of a candlestick.

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