FXCM Research Team

When trading in forex (as with trading in any asset), market participants will want to follow the age-old recommendation to "buy low and sell high." To do this, they will clearly need to develop a rationale and trading strategies designed to enter the market when asset prices are low. But what about the other end of the trade? When is it an appropriate time to get out? Many market participants…

Penny stocks are traditionally identified as equities that trade at the low end of the ranges of prices found in the market, often less than a dollar or for "only pennies."

At the core of stock valuation is the notion that a company's current market price may differ from its intrinsic value.

What is Arbitrage? Arbitrage trading is an opportunity in financial markets when similar assets can be purchased and sold simultaneously at different prices for profit. Simply put, an arbitrageur buys cheaper assets and sells more expensive assets at the same time to take a profit with no net cash flow. In theory, the practice of arbitrage should require no capital and involve no risk. In practice, however, attempts at arbitrage…

In order to participate in the futures market, an individual assumes responsibility for several transaction costs associated with the facilitation of a trade. Overall, there are four basic types of fees incurred during the active trading of a single futures contract: Exchange/Clearing fees National Futures Association (NFA) fee Data fees Brokerage commissions Futures trading fees are assessed on a per-contract basis. For every contract traded, each type of fee is…

For many investors, intraday trading is perceived to be an inherently risky occupation, and one that attracts individuals oblivious to its many pitfalls.

The Efficient Market Hypothesis (or EMH, as it's known) suggests that investors cannot make returns above the average of the market on a consistent basis. This is because under normal circumstances all available information about asset values and prices is rapidly disseminated throughout the market, bringing prices quickly to an equilibrium value. The hypothesis was developed in the 1960s by University of Chicago economics professors Harry Roberts and Eugene Fama.…

Random walk theory is the belief that a security's current market price is the product of chance rather than the sum of past events or human behavior.

What Is Forex Arbitrage? Forex arbitrage is defined as "the simultaneous purchase and sale of the same, or essentially similar, security in two different markets for advantageously different prices," according to the concept formalised by economists Sharpe and Alexander in the 1990s. Given the popularity of forex trading, arbitrage strategies are implemented by thousands of participants around the world. Accordingly, someone who practices arbitrage is known as an "arbitrageur." Simply…

Deutsche Börse Group is a major operator of German and European financial exchanges. This includes the top stock, commodities and derivatives exchanges, in addition to trading, clearing and post-trading platforms and services related to those businesses.