Market Cap:
$241B
BTC Dominance:
65.67%
btc:
$8,755.30
eth:
$187.37
xrp:
$0.27
Advertise

How do Gold ETFs work?

Gold ETFs works as an alternative way to invest in gold. However, this is one of the most popular ways to buy shares of exchange-traded funds. 

November 11, 2019, | AtoZ MarketsGold ETF works as portfolio diversification. ETF is the process of accumulating small amounts from many different investments. The main aim of ETF is to let the investors diversify the investment. The most attractive part of the Gold ETF is the fair share of the trillions of Dollars to process through the market. This is a useful way to invest in this sector with low cost and flexibility. Besides, the Cryptocurrency industry Golds ETF’s are another innovation in investment sectors. 

What is the Gold ETF?

To understand the Gold ETF’s work, it’s important to understand what they are. 

ETFs are investment companies that sell shares to investors under regulations. They pool together the cash from the collection to achieve a common pool. 

Therefore, ETF takes the pool of money and invests it to achieve a particular investment objective. This is one of the famous passive investment approaches. This strategy does not allow us to make decisions about a particular investment opportunity. However, investors can monitor the predetermined indexes that are selected for investment. In this process, investors are more likely to succeed than others.

These index ETFs have the goal to match the returns of the benchmarks they follow. Moreover, the costs of ETF operations are lightly below the index’s theoretical return.

How Gold ETF become popular

ETFs are popular because of their different investment objectives. Most of the funds for asset class are from stocks, bonds, commodities, and foreign currencies. Other business ideas offer to broadcast ETF works by drilling down on very small niches of an overall market. 

On the other hand, others look for the offer of the broadest possible swath of investments to meet the investment criteria. 

It’s easy to find an ETF that matches your financial goals and wishes. There are thousands of different funds available to choose from.

How does Gold ETFs work?

Gold ETFs are like mutual funds that allow for instant diversification within a portfolio. However, the key differences between these ETFs and mutual funds are an asset used for holding. Gold ETFs hold physical assets instead of holding a portfolio of stocks or other securities. Gold ETFs, designed to be the future of physical gold that may act as a mirror of the precious metal. Thus, shares of a gold ETF should have a direct relationship with the gold price. However, gold ETF’s work in the investment sector has brought an enormous change.

#1 Portfolio Diversification

The main object of the Gold ETF’s work is to diversify the portfolio even if they do not have a lot of money. In portfolio diversification, investors can alter the risk faces from particular assets with another investment.

Investors can buy a single share of an ETF with less than 100$ only. It allows them to get exposure to hundreds or even thousands of types of investments. This opportunity allows investors to choose a small subject from the available investment opportunities. Therefore, it reduces the risk of losing the stock and saves from suffering a catastrophic loss of capital.

ETFs protect their investors from any big losses in a single stock. Investors avoid the risks as long as it holds the investment.

#2 Reasonable Fees

Another big feature of Gold ETF’s work is that its fees are reasonable. All investment managers in the ETF’s work to match the performance of an index. This process saves them from doing costly research or taking retry to enhance the return. Which makes it irrelevant for the fund to do costly research or take another effort to try to enhance return. As a result, investors pay less amount than traditional mutual funds. Moreover, ETF’s trade on the stock exchange where most of the stockbroker charges the commission to trade.

However, increasingly, the trend has favored investors to use no-cost ETF trading.  Furthermore, the brokers are finding ways to encourage ETF investing for their clients.

#3 TAX Advantages

ETFs have some tax advantages that make them preferable than traditional mutual funds. In the ETFs, investors almost never have to declare taxable distributions of capital gains. On the other hand, the mutual funds had to declare the capital gains that can add the tax bill. This procedure helps the investors to decide the timing of realizing the gain. Investors can decide freely when they will be able to sell the ETF shares.

#4 Comfortable than Mutual Funds

Investors can trade ETF shares more freely than they can mutual funds. They can buy or sell their ETF shares as soon as the stock market opens for trading. On the other hand, with the mutual fund, investors can only buy or sell once at the closing of the day. Therefore, ETF investors can enjoy more latitude to respond to change the conditions quickly. Investors do not have to miss the major move that already happened during the day.

#5 Support by Physical Gold 

Physical Gold supports the Gold ETFs as safety at the back-end. For instance, when investors buy a Gold ETF, they at the back-end is purchasing gold. Gold ETF’s provide the guarantee to the investor like gold. They accurately follow the latest market cost, called spot gold price. NSE allows the authorized person to handle the purchase and sale of gold to generate ETFs. Hence, the cost of gold and ETFs remains the same.

#6 Easy to open the account

To open an account in Gold ETF’s investors doesn’t have to do so many hassles. The investor should submit the PAN, ID Proof and residential proof to open the account. After that, there are some options to choose the Gold ETF’s. Additionally, there are options to choose mutual funds with an underlying gold ETF.

After providing the information, there will be a confirmation email to the user account containing the login information. Therefore, they will deduct a nominal fee for brokerage during the transaction

Conclusions

The Gold ETFs work is to provide investors the opportunity to choose the gold as something to invest for a longer period. Therefore, it is time to think beyond bars, coins, and ornaments; another gold product is the Gold ETFs.

Think we missed something? Let us know in the comments section below.

What are Blockchain’s Issues and Limitations?

Blockchain issues are the limitations of blockchain technology in the present world. As this technology is new, there are many limitations that required to be solved.

11 November 2019, AtoZMarkets – Before proceeding to the blockchain limitations, it is important to understand what this technology entails. Blockchain is a distributed ledger system that was proposed in 2008 with the idea of Bitcoin. This system is decentralized & immune. Therefore, we cannot delete the information form the blockchain store. These characteristics prevent problems like fraud or stealing information. However, there are other technologies that compete with the blockchain, like SQL Server & Oracle. While this technology has its benefits, there are some blockchain limitations.

What are Blockchain Issues and Limitations?

Blockchain is a world-changing technology in many ways. However, it isn’t necessary to clear all the problems so, there are some Blockchain Issues.

#1 Complexity of Blockchain

It is possible to have some Blockchain issues as the technology is very new in the world.

Blockchain technology has many applications that are suitable for holding information secured. However, it is not the only option available for putting this information. Besides blockchain, there are other options available in the world.

The introduction of cryptocurrency makes the blockchain familiar to the open world. However, only a highly specialized industry can use this technology. The main element here is cryptography that runs the blockchain. Nevertheless, most of the people in the world cannot afford to use the technology.

Thankfully, there are several efforts at providing glossaries and indexes to eliminate Blockchain Issues.

#2 Security of Blockchain

The “51% attack” is one of the most blockchain issues. Therefore, a single organization can control the majority of a network’s mining power.

For example, bitcoin’s network depends on miners confirming transactions. Another name of this is the consensus algorithm.” This process determines which transactions have taken place. There is a risk that an organization can achieve control over most of the network’s hash rate.  Therefore, it could potentially spend coins more than once and can prevent confirmation of certain transactions.

Implementing a 51% attack would give the attacker the capability to alter blocks from the blockchain. The most dangerous blockchain issues are that there is no straightforward method to prevent these attacks. The blockchain network is decentralized so people can team up the mining pools. As a result, they can achieve the required hash rate.

However, it requires massive resources to execute a 51% attack, changing blocks in the blockchain.

#3 Blockchain Issues- Network size

Blockchains are not bad actors’ resistance as they are ‘antifragile.’ Therefore, they respond to attacks and raise stronger.

However, a stable blockchain requires a large network of users. To achieve the full benefit, the blockchain requires a healthy network with a wider grid of nodes. Sometimes, it is hard to achieve a high profile blockchain to get benefit from it.

There are some debates about whether this a serious flaw for some granted blockchain projects.

#4 Transaction costs

The transaction costs of one of the famous cryptocurrency, Bitcoin was nearly free for the first few years of its existence. Nowadays, the transaction cost has been increased, notably resulting in serious blockchain issues.

As of late 2016, it can only process about seven transactions per second, with the costs about $0.20. Moreover, it can only store 80 bytes of data. Now the block fee has increased to $0.79 with 10 minutes of time. The flow of the transaction costs is clearly indicating a blockchain issue.

As Deloitte Insights puts it, “blockchain-based systems are comparatively slow.” The transaction speed has become a major concern of the enterprises even they use high-performance legacy transaction processing systems.

#5 Human errors

The errors in the Blockchain itself are rare, but it is possible to occur at the interface with wallets, etc. When it comes to the users, the blockchain provides inalterable protection against manipulative attempts. Nevertheless, this inability to change data will serve as blockchain limitations.

Moreover, the information going into the database needs to be of high quality. The data at the blockchain is not inherently trustworthy. Therefore, it is important to record in the first place.

The phrase ‘garbage in, garbage out’ works well in a blockchain system of record.

#6 Blockchain Scalability

In order to scale a blockchain, it is necessary to increase the block size or decrease the block time by reducing the hash complexity. However, this is not enough now and this is clearly a blockchain issue.

In order to achieve the ceiling, the Blockchain needs to complete with other businesses like Visa. Currently, VISA is handling an average of 150 million transactions per day.

Comparing to this, the transaction speed of Bitcoin is tremendously low.

Currently, the block size, which is set 1MB (1,048,576 bytes), can scale to up to a theoretical 4MB (380.04 bytes).  In addition to that, the average transaction size is 380.04 bytes. The average amount of transactions to fit into one of Bitcoin’s blocks is calculated as:

blockchain issue

The current block generation time for Bitcoin is 10 minutes. Bitcoin can average around 2,759.12 transactions within these 10 minutes.  In other words, Bitcoin blockchain can currently guarantee 4.6 transactions per second, which is another blockchain issue.

#7 Politics

Blockchain protocols are an opportunity to digitize governance models. Therefore, there have been chances for public discrepancies between different community sectors.

These discrepancies are a prominent feature of the blockchain industry. There is a clear expression around the question or event of the ‘forking’ a blockchain. Every blockchain user needs to agree on this before proceeding further.

These arguments can be very technical and sometimes excited. However, it is informative for those who are interested in the mixture of democracy. On the other hand, it is a new opportunity for the government is that the blockchain technology is opening up.

#8 Lack of regulations

This is another problem with Bitcoin or other value-based blockchain networks. People who invested in bitcoin or other cryptocurrencies found this problem seriously. Due to the lack of regulations, there is a possibility of market manipulations. There are several Ponzi schemes like “Onecoin” that robbed millions of dollars from the investors. As this technology is very new, the legislators are struggling to keep pace with the innovators.

In case of hacking of the Bitcoin or other cryptocurrencies, there is no law to save the money from the investor’s pocket. This is a consequence of the lack of supervisory oversight across the sector.

Conclusion

Nowadays, blockchains are reliable networks. However, they are slower than their centralized counterparts are. We cannot express about millions of transactions per second. It is possible to achieve an ultra-fast “blockchains” with some middleware connection. In fact, centralized service can provide such software. In most cases, this is an L2 solution (Lightning, Plasma) or that promise to gather many parallel chains. The performance of this modern blockchain may reach 1 000 – 10 000 tx/sec. However, there are many good approaches to working solutions in this area of software research.

Do you think we missed something? Let us know in the comments section below.

How to trade cryptocurrency through your forex broker?

The most awaited questions from the traders are how to trade cryptocurrency through your forex broker. The basic concept of forex trading is making a profit from the difference in prices from the market volatility. 

November 8, 2019, | AtoZ MarketsIt is easy and simple to trade cryptocurrency through a forex broker. Since its inception in 2009, cryptocurrency has grown from an unnoticed blip on a computer screen. It creates a worldwide phenomenon among the investment sectors. As cryptocurrencies are volatile, there is a possibility to make a profit from the changing of prices. Moreover, there are several strategies like CFD, day trading &  swing trading. However,  making and breaking fortunes through it is often-volatile trading patterns and soaring growth trends. There are now over 1,000 types of cryptocurrencies in the world.

What is Cryptocurrency Trading?

The Cryptocurrency trading has been started back as 2009. At that time, bitcoin’s value was about cents and the early buyers are now made millions of dollars.

Unlike traditional currencies, the cryptocurrencies are different and totally decentralized. They use blockchain technology with various platforms for various uses.

Any central administration does not control these cryptocurrencies. Therefore, it was possible to create different cryptocurrencies for different purposes. Cryptocurrency trading is different from the tradition trading system. The cryptocurrency trading platform uses different cryptocurrencies instead of fiat currencies.  The cryptocurrency trading platforms also runs on the blockchain technology.

However, Bitcoin is one of the world’s most traded cryptocurrencies. Learning how to trade Bitcoin would be the same for another cryptocurrency trading through forex brokers.

The basic concept of forex trading is making a profit from the difference in prices from the market volatility. As cryptocurrencies are volatile, there is a possibility to make a profit from the changing of prices.

If you know how to buy or sell and when to perform the action, you almost know the process of cryptocurrency trading in a forex broker.

What Are Forex Trading Platforms?

Forex trading platforms are the place through which you can carry out your currency exchanges. It works as an intermediary between you and the interbank system to trade with each other. Typically, a Forex broker will offer you a price from the banks to forex liquidity. Many forex brokers use multiple banks to provide the best available price. You can operate your tradings from anywhere around the world. Moreover, you can trade your preferred currencies through forex trading platforms.

There are several platforms available on the internet. This platform allows you to trade with several strategies. You can alter your strategy to achieve the best outcome from the forex trading platform. Moreover, there are several trading tools available to improve your trading accuracy.

How to trade cryptocurrency through your forex broker?

Cryptocurrency trading is similar to traditional trading systems. However, the cryptocurrency trading platforms stand for the trading and exchange of cryptocurrencies.

The cryptocurrency trading means to exchange cryptocurrency with another cryptocurrency. However, it is also possible to exchange cryptocurrency with fiat currency. This depends on the policy of the trading platform.

Another remarkable way of trading cryptocurrency is the exchange of crypto contracts for differences (CFDs). This system will allow you to earn profits without exchanging. Through this method, you trade your preferred cryptocurrency broker or bitcoin trade broker. However, you do not need to have any cryptocurrency to trade. Moreover, you do not need to worry about the security and storage of your cryptocurrency.

#1 Cryptocurrency CFD Trading

Cryptocurrency CFD Trading is just a contract between the trader and the broker. For Bitcoin, It allows you to bet on the changes that happen in the price of the Bitcoin.

At first, you have to open an account with the forex brokers that allow Bitcoin CFD trading. If you think Bitcoin’s price may go up, you can simply open a buy position from your chart. If the bitcoin price rises, you will earn money from the broker. On the other hand, if the Bitcoin price goes down, you will lose and the broker will earn money from you.

It is crucial to note that Bitcoin CFDs are risky, considering the volatilities of this crypto market. Therefore, this trading strategy is suitable for experienced traders only.

There are many forex trading platforms to trade your cryptocurrency CFD’s.  However, MetaTrader 4 is one of the best platforms.  It is the most famous platform among retail traders that contains many valuable features. The most notable features are advanced charting tools, different order time, and wide range periods.

#2 Cryptocurrency Scalping

Scalping is doing thousands of trades within a short trading period. Scalpers target price gaps and other short-term trading opportunities that allow them to turn quickly turn. In scalping, the trader enters multiple positions in a short time frame with the expectation of small gains.

Scalping is a popular method for its ease and psychological comfort. In a scalping strategy, profit realizes as soon as possible. On the other hand, holding a position for the longer term is stressful and difficult for novice traders. With scalping, trades are rarely last more than five minutes. The multiple short-term profits ensure a version of instant pleasure.

It is hard to make a profit from this; it is possible to make substantial profits. Therefore, you have to be more patient and stick to your trading strategy. You need to be quick and laser-focused to make most of Scalp trading.

Most of the traders rely on technical analysis tools in order to Scalp trade Cryptocurrencies. Moreover, they use many price action charts of the desired cryptocurrency and watch the major news events very keenly. Then they make a profit from the spike from the news and events. There are other valuable features like live feed, direct access to broker & the ability to place many trades.

Experienced traders, who depend on technical analysis only, prefer MT4 platform scalping. However, you should watch the price action very keenly. The tools like Stochastic, MACD will help to analyze price action easily.

#3 Cryptocurrency Day Trading

Day trading refers to complete all the trading activities within a single trading day. The objective of a day trader to analyze the market and take a suitable position. Then watch that position like a hawk and exit with a profit. The running time of the trade maybe a few minutes or a whole day. Cryptocurrency day trading is nothing but the buying and selling the cryptocurrency on a given trading day.

#4 Algorithmic Crypto trading

This refers to the trading of the cryptocurrency using algorithms and trading bots.

A trading bot is a software that can cooperate directly with financial exchanges and place the orders on your behalf. Algorithmic Crypto trading is nothing but buying or selling of cryptocurrency using these bots. The bots take trading decisions by monitoring the price movements and react according to the pre-programmed rules.

The trading bot usually analyzes the most basic market actions like price, volume, time, and orders. You can manually set these programs to suit your own preferences. This automated trading is one of the greatest and most solid features of MT4. MT4 allows you to develop, test and apply automated bots with technical indicators for you to automate your indicators.

You can set predetermined rules & instructions to these bots on when to buy/sell your preferred cryptocurrency.

Conclusion

Each trading system comes with its own set of risks and rewards. There is no perfect strategy that exists in the world that suits all traders. To gain from the forex or crypto market, you have to get proper training with suitable money management skills. Moreover, there are lots of trading strategies available online. You just have to choose one of them that suits you most. 

Think we missed something? Let us know in the comments section below.

How to make a Bitcoin Paper Wallet

In this article, you will see a step-by-step guide to make a Bitcoin Paper Wallet. The whole process consists of the process of paper wallet generator, securing the computer, configuring the wallets & cleaning up before physically securing the wallets.

06 November 2019, AtoZMarketsBitcoin paper wallet is vital for those who have a risk of hacking or stealing information from online. However, keeping a live wallet on your own computer also can be risky. By printing out your own bitcoin wallets, you can minimize the risks of hacking. You can transfer your bitcoins into your new paper wallet to confirm the security.

What is the Bitcoin Paper wallet?

A paper wallet is a document that contains a public address for receiving Bitcoin and a private key. It is important for all cryptocurrencies. It allows spending or transferring Bitcoin from that address. However, it is easy to access the paper wallet through QR-Codes scanning.

The paper wallet allows users to create a random Bitcoin address with a particular private key. The generated keys can then be printed. Some services offering a tamper-resistant design or even an option of ordering holographic labels.

The main benefit of a paper wallet is the offline storage of information. Therefore, Worlds No 1 Cryptocurrency remains risk-free from a hacker attack and malware attack. However, there are some issues when creating a paper wallet. There is a possibility to steal bitcoin information while creating or using it. To avoid this risk, then you should use a clean operating system running from a USB flash drive or DVD.

Furthermore, after setting up the paper wallet, the website code should be able to run offline. This will allow disconnecting from the internet before generating the keys.

 Importance of Paper Wallet

A paper wallet is a piece of paper with both the private and public keys to a bitcoin address. It is used to store bitcoin that is earned from mining or trading.

Among the other wallets, paper wallets are a cheap and secure way to store bitcoins. People can keep the bitcoin wallets away from hackers. Therefore, many people believe it as the most secure way to store bitcoin. If the wallet is physically protected, People can use it for a long time.

How to make a Bitcoin Paper Wallet?

The steps to make a bitcoin wallet is almost the same for all types of Paper wallet. However, in this section, we will use Bitaddress.org to demonstrate the process.

#1 Choose an appropriate  Paper Wallet Generator

The first step is to choose an appropriate generator. There are several Paper wallet generator services available online. However, the popular BTC paper wallet generators are Bitaddress.org, Bitcoinpaperwallet.com, and Walletgenerator.net.

Bitcoin Paper Wallet

Bitaddress.org is an open-source software that is the oldest available paper wallet. On the other hand, Bitcoinpaperwallet.com offers more additional products and instructions on its website.

#2 Set Up The Computer:

First, you need to clean up the computer and set up an offline printer. Then, clean the computer by scanning for viruses and malware tools. In addition, the printer should be connected with the computer and there will be a stable internet connection.

For advanced users, there is some complex process to increase computer security. A new operating system with multi-grade disk cleaners is one of them. Additionally, there are other securities for boot disk cleanups and so on.

#3 Download the paper wallet generator

You can generate paper wallets online. However, the offline generation is much more secure than online. Therefore, you should visit the generator’s website and download a zip file of the software. 

The download link is located at the bottom of the Bitaddress website. Before installing the bitcoin paper wallet, you should copy the Downloaded files somewhere easily accessible. Once downloaded, you need to scan the zip file for malware checking. Advanced users can verify the author’s PGP signature to ensure more security.

Bitcoin Paper Wallet

#4 Disconnect from the internet

It is important to disconnect the computer and printer from the internet, before generating the paper wallets. Then choose a web browser and disable all extensions & add-ons. This process will save from all types of risk from transferring the information online.

#5 Generating the Wallets

After disconnecting from the internet, click the Bitaddress.org.html file from the extracted zip files. The open it in the internet browser. Make sure that there are no add-ons and extensions in the browser.

Move the mouse around the area and see the randomness percentage. Another way is to type some random characters into the text box and see the randomness percentage. It will create a single wallet after the randomness gets 100% complete.

You can print the single bitcoin paper wallet generator for a quick single address. Moreover, there are other options in the bitaddress.org wallets. Of them, the brain wallets, wallets in bulk, vanity address are notable. You can customize the paper wallet by selecting one of the options.

Different generators have different types of paper wallet artwork. However, you can turn off the artwork and you can generate a unique wallet number. For extra security, there is an option of adding a passphrase to the wallet with BIP38 encryption. In that case, make sure to keep the passphrase safely from the paper wallets. After generating the paper wallets, print them out with an offline printer.

Bitcoin Paper Wallet

#6 Delete all downloaded files 

Delete all downloaded files from the computer after the paper wallets have been printed. Then empty the recycle bin and clear the printer’s cache. Moreover, reboot the computer and then connect to the internet.

#7 Send crypto to each wallet.

The next step is to Send crypto to each bitcoin paper wallet. The amount of coins depends on the purpose of the coin user. This might be a gift or long term investment. But make sure to check the public address by sending some smaller amounts before going for a larger amount.

#8 Security of the Wallet

After loading the cryptocurrency, it is important to keep it hidden and protected from others.  For most designs, fold the paper wallets to keep private keys hidden. Moreover, place a tamper-proof sealed sticker or laminate on the edges of the folded parts.

Finally, protect them from natural disasters like fire and theft by placing them in a fireproof safe. However, storing them in a bank’s security deposit box is not recommended. In order to spend the coins from the paper wallet, you must “sweep” the private key on it into a mobile or desktop wallet. Moreover, the hardware wallet such as the Ledger or Trezor allows spending without having to first key.

Conclusion

If you want to store large amounts of coins, you need to have cold storage. If you can spare more, you need a hardware wallet. A paper wallet is a way to go who cannot afford it. For a higher amount, you need to take the time to go over the advanced method to create the Bitcoin paper wallet. The extra 30 minutes or so you’ll invest in the process may end up to prove worthwhile.

Think we missed something? Let us know in the comments section below.

Is Forex Halal or Haram?

Is forex halal or haram? This is the most common but difficult question our religion-abiding Muslims ask. If you are Muslim and want to know trading Forex is halal or haram you came to the right place. I have done my research and will do my best to help you answer that question today.

This article was written on the 14th of May 2015 and updated on the 1st of November 2019.

AtoZ Markets – Each time I am giving a keynote speech in an Islamic country; the Middle East and Southeast Asia; I often get two mainstream questions “ Is Forex Halal or Haram? ” and since 2017 ” Is Bitcoin Halal or Haram?

I am not a religious person, neither I am an Islamic scholar. So, to find my answers to these questions I had to do my research. Thus, I took this opportunity to learn from Islamic Scholars, get their opinion by asking them ” Is Forex trading Halal or Haram?”

So, let’s get some of these questions clarified.

#1 What is Haram?

When you ask what haram is, different people give different definition. But here are some of the most common answers I got.

Yagub (says in Turkish):

“Dear Mufti, what is Haram according to Islam?”

Mufti (says in Turkish):

“Haram is something that Allah (God) and the Prophet (SAW) have completely and specifically forbidden. It is that act or matter would be considered as unclean and indecent.”

A few other experts told me that Haram is an act that is evil or sinful.

Is Forex Trading Haram?

So, first I did my best to understand what is Haram. My next goal was to understand if Forex is halal or haram in Islam. Why do many people consider Forex Haram, while so many people consider Forex Halal and make a living on Forex as an industry?

I started to ask ordinary people and religious leaders:  “Is Forex Haram? If yes, why? If not, why not?”

Plato once said “Human behavior flows from three main sources: desire, emotion, and knowledge”

Most of the Forex hating people replied to me that Forex is Haram. So, I pushed them for my next answer. Why is Forex Haram?

Common answer: Forex is Gambling and Gambling is Haram in Islam.

After so many discussions with those Imams, Prayers and active religious people we came to the following common agreement.

Forex is Halal IF

Forex is Halal if you are not gambling and have your end goals distinguished.

Forex is halal or haram? Gambling is haram!1- As a Forex trader you need to have a reason to take action in the market (sell or buy);

2- You can not gamble on the trend direction but analyze the market;

3- You can not trade for the sake of excitement. Treat the market as a real business, trade for the potential income and to make a living;

4- Do not to approach it as a game but as a job;

5- Have a mindset to win or to protect your equity;

6- Do not tell yourself “if I win I win, if not next time”;

7- You have to learn from your losses.

8- Do not revenge trade! Move on with your loss-making decision, rather than blaming the market or blaming the situation

9- You must have a SWAP free account or trade avoiding SWAP

So, is Forex Halal or Haram?

There is a thin line between trading and gambling. We all must admit it. But the good news is that you can avoid being a gambler.

1- Only take trades with a high probability of making a profit based on your analysis;

2- Exiting a trade is as just important as entering one, have a trading plan;

3- Define your stop levels, maybe use trailing stop loss?!

4- Choose the right entry size, you are gambling if you are risking all to double it;

5- Know what you are trading;

6- Understand the time frames – addiction is a sign of gambling;

7- Backtest your strategy and aim to develop it;

8- Constantly review your historical performance and try to understand why you made loss and profit;

9- Be disciplined, trading is a job, not a game;

10- Focus;

11- Trade with an Islamic account providing Forex Broker;

The team at AtoZMarkets.com has reviewed a list of friendly Forex brokers in its directory. Why not check it out to see if they have an Islamic account or not?

Note: The above is a part of my discussion with 2 Islamic scholars from Azerbaijan, 1 from UAE, 1 from Indonesia and 1 from Egypt. Since Forex trading being halal or haram as a subject is debatable, please feel free to comment your thoughts below in the comments section. Or please use social media to reach me out.

How to buy Bitcoin Anonymously

The process to buy bitcoin anonymously is pretty challenging for the investors comparing to ordinary online transactions. Everyone can see the transactions within the Blockchain and so investors find it hard to remain anonymous while buying Bitcoins. In this guide, we will show you the various methods to acquire Bitcoins anonymously. 

October 30, 2019, | AtoZ Markets –Bitcoin is one of the top-ranked cryptocurrency in the world. Every transaction of Bitcoin is publicly disclosed on the Blockchain that requires identity verification by exchanges. It is easy & straightforward to see the tracking of Bitcoin. In this open world, the investor faces a challenge to remain anonymous while buying Bitcoin. However, there are methods to buy Bitcoin anonymously using the Paxful or Bitcoin ATMs. Furthermore, BitQuick is the place that does not require actual identity to purchase Bitcoins. To be anonymous, there are some tools such as Tor, coin mixers, a VPN provider, and more. 

Is Bitcoin Anonymous? 

Bitcoin is not completely anonymous. Bitcoin is more private than credit cards but less anonymous than cash. All Bitcoin transactions are stored in a public ledger named as a blockchain. The information of the transactions includes the payment amount and the bitcoin address of the sender & recipient. 

As the Blockchain is public data, anyone can see the Bitcoin payment that has a traceable history. However, History includes the bitcoin address, not any personal information. That is why the privacy of Bitcoin is called pseudonymous or pseudo-anonymous. 

However, there is a way to identify a person’s identity from the Bitcoin address. If someone has determination, time & resources to analyze, he would be able to find information from the Blockchain. This determination includes how many bitcoins an individual has, how they spent them, and how they receive them. Some precautions are needed to buy Bitcoin anonymously. This will help the user to prevent the actual identity associated with the transactions and addresses. 

Why Stay Anonymous? 

Before we go further into the ‘how to Buy Bitcoin Anonymously’, we need to understand why it is important to stay anonymous.

The first reason is Hacking. Hackers can hijack the information of the Bitcoin using the complex process from the internet. So being anonymous may reduce the possibility of being targeted by Hackers.

Bitcoin’s blockchain is made by cryptography, which prevents simulating and other types of fraud. However, the human element in Bitcoin transactions is always risky. Most Bitcoin wallets broadcast the real IP address of all transactions, which may use to trace the address. Many peoples are involving in the use of Bitcoin so it is very essential not to get hacked with the lose of money. 

However, the way that most Bitcoin wallets handle change often results in various addresses within the wallet. As a result, one identity can leak information about other unknown addresses. There are certain ways to Buy bitcoin anonymously either from the internet or real-world, as mentioned below:

Buy Bitcoin Anonymously from ATM

Bitcoin ATMs are a way to buy Bitcoins anonymously with cash. In this method, the user has to go to the nearest Bitcoin ATM to purchase Bitcoins using cash. This is probably the best way to buy Bitcoins anonymously. However, the ATM is not available to everyone next to him or her. 

The ATM asks for the Bitcoin address to make the cash withdrawal. If the user does not have any Bitcoin wallet, it generates a new paper wallet to make the transaction. Then the user can simply import the private key from the paper wallet to send those Bitcoins to other persons. 

Does it require any ID for Bitcoin ATM? No. Bitcoin ATMs do not require any ID, but they provide a limited amount of Bitcoins to buy. 

What is the fee of Bitcoin ATMs? Most of the ATMs charge a fee between 7%-10%. Some ATMs do not mention the cost explicitly rather keep it hidden with the exchange rate. 

Buy Bitcoin Using Prepaid Card 

This is another way to buy Bitcoin anonymously. To buy bitcoin using the prepaid card, the user should find the local sellers from LocalBitcoins. However, Bitcoin & Other ordinary VISA, MasterCard & PayPal are not the same things as discussed here.

There is a list of sellers in LocalBitcoins who are willing to sell their Bitcoins by cash. The user should find one of them and can buy Bitcoin using a prepaid credit card from them. Moreover, this system includes some local payment methods besides the Credit or Debit card payment. 

Buy Bitcoin via cash deposits 

The idea of Bitcoin Cash deposits is very simple, where the buyer and seller have to agree on an amount. The seller has to deposits the Bitcoins at a provider such as BitQuick. Then, the buyer deposits the cash into the seller’s account, and the firm in the middle releases the coin. This process does not require any Verification ID except the Mobile phone number. It is easy to purchase a phone number with an anonymous email via Skype, for example.

Buy Bitcoin anonymously at physical locations

Another easy way to buy Bitcoins is through cash arranged at physical locations. Buying Bitcoin by cash is easy and untraceable, as it does not require any documentation for the transaction. Some of such providers or platforms are LocalBitcoins or Paxful.  At Paxful, you can create an account and it requires an email address and verification ID. However, the verification ID process is optional. Similar like LocalBitcoins, Paxful allows the local payment methods besides cash and credit cards. 

Conclusion:

The more anonymous a person wants to be, the more effort he needs to surf the internet. Someone is looking to buy a few coins without tracing; he/she just needs to use cash. However, to be very serious about using Bitcoin anonymously, there is no other way than going through the trouble of becoming fully anonymous.

What’s your opinion on How to Buy Bitcoin Anonymously? Please share your thoughts in the comment box below.

How to Hedge Crypto Trading Risks

Trading in the cryptocurrency market is a risky business. Here is the step-by-step guide to hedge cryptocurrency to protect yourself against that risk.

23 October 2019, AtoZMarkets – As cryptocurrencies have gained attention, traders have started to find ways to protect their investments from risk. There are a variety of reasons that cryptocurrencies like bitcoin (BTC), are risky. However, to avoid the Cryptocurrency trading risks, a trader should the process of hedging in cryptocurrency.

What is Cryptocurrency Hedging?

The cryptocurrency hedging is the method that involves strategically opening trades to offset the losing position by changes to the value of the other position.

Normally a trader should reduce the trading position or the closed position on an uncertain situation to mitigate the risk. However, hedging is a useful strategy for traders to maintain the original cryptocurrency holding with a neutral exposure.

The cryptocurrency market is one of the newest types of investments, which consists of a high level of risks and returns. The main investors in the cryptocurrency markets are high-risk tolerance. From the very beginning, they have demonstrated a limited demand for hedging. As the market develops, the hedging mechanisms are evolving, consisting of classical tools and unique methods of blockchain.

Read More: How crypto arbitrage bot works?

Things to consider to Hedge Crypto Trading Risks

In order to Hedge Crypto Trading Risks, there are several things to consider first:

#1 Diversification

Diversification is a common way of mitigating cryptocurrency trading risk in the market. Diversification is all about maintaining a healthy mix. In the stock market, there are a multitude of industries. So it is easier to pick offsetting stocks according to the industries they operate in. In the cryptocurrency market, most of the trading pairs are very volatile and the market generally trends together daily.

The diversification strategy for hedging the risk builds the foundation of a portfolio on most of the traded coins. Bitcoin, Ethereum and Ripple generally are the least volatile and perfect for hedging against other riskier coins.

#2 Liquidity

The second tip is to make an account on an exchange that allows to hold money in fiat currency with the cryptocurrencies. This allows to transfer of money in between and helps to reduce from getting stuck in a bind if a major crash occurs. This also allows quickly to take advantage of optimal exchange rates with the proportion of the investment.

#3 Use of options and futures

This is called crypto derivatives. This requires more capital, more risk, and advanced trading knowledge. Sites like Hedgy, Bitserve, or Coinapult allows to hedge cryptocurrencies by buying options or futures contracts.

Types of Hedging Techniques

#1 Short-selling

Short-selling is the practice of taking a position to sell an asset. The trader should believe that its value will fall to buy back for a lower price and making a profit from the difference. Short-selling is a common hedge of bitcoin against a long exposure.

The traditional method of short-selling involves borrowing a cryptocurrency from a broker or third party and selling it on the open market. There are a few cryptocurrency exchanges that allow short-selling.  But It is often difficult to find a third party that is willing to lend the assets.

Even the lender is found, they would recall their asset at any time

For example, if we borrowed a bitcoin to short-sell when the market price was $8500. But instead of falling in value, the price increased to $10,500. Then we bought the bitcoin and taken a $2000 loss.

#2 Diversification

Hedging through diversification happens by the gradual fixation of profits and replacement of the assets’ portfolio. The assets should have an inverse correlation to the specific cryptocurrency price.

As an example, the DigixDAO coin (DGD), has an inverse relation with Bitcoin.

#3 Margin Trading

Margin trading carries out at the expense of borrowed assets from the trading platform. By providing the site with security, the trader can borrow from the trading platform in Bitcoins and sell them. This will make a profit if the Bitcoin price drops, which allows using margin trading as a hedging instrument. This system is suitable for the crypto investors who are afraid of a drawdown of the portfolio and it works well with the Bitcoin. The expected price drop may open a new short position, allowing reducing losses while the investor gradually sells his cryptocurrency for USD.

In addition, this strategy allows to sell the Bitcoins volume gradually and do not bring all to the stock exchanges. Most large exchanges have functional margin trading options. For example, tiquid provides leverage with a factor of up to 100x.

#4 Conditional orders

This method of hedging allows calculating the maximum possible percentage of a drawdown of a portfolio with maximum accuracy. However, this system has a significant drawback, as it requires the storage of assets in the account of the platform.

By knowing the current price of an asset, a trader can set the maximum allowable drawdown price to establish the conditional order. Then it will sell the assets determined by the investor in the market when the specified asset falls to the selected level.

Despite ordinary trading platforms, the cryptocurrency market is in its beginning and still has relatively low liquidity that often makes the hedging difficult.  In addition, cryptocurrencies are not legalized in most countries of the world & not all sites that provide derivatives trading have licenses.

#5 Hedging with Options

Options in cryptocurrency space are new and limited. Deribit & Bitmex is currently offering the opportunity. As they are very experienced, they explained the basic mechanism of options here.

Hedging with options is complicated and there are several to build the payoff. However, there is a straightforward way to hedge out the downside risk.

  • At first, an account with the exchange is required.
  • Then, based on the current price of bitcoin (BTC), the expected hedging period is required.

For example, if BTC is at 6432 and the trader wants to hold it until the end of the month. After that, at the 6500 put option pricing for the end of the current month. If there is no match on the time- frame, the trader needs to wait until it covers the timeframe.

  • For the chosen ITM put option price check its current price and calculate the amount needs to deposit.
  • Deposit the funds into the exchange.
  • Purchase the put option and hold it until expiration.

#6 Perpetual Swaps

Perpetual swaps have grown in popularity and crypto exchanges have started to offer them.

The first crypto exchange to have perpetual is the Bitmex, where they have a detailed process explained. Some of the concepts of calculating the funding rate could be complicated to use. In this system, a high-level understanding is needed as it will calculate the funding rate.

Ultimately, the strategies for using these tools are depended on an individual solution to the hedging dilemma. However, It isn’t easy to sell a significant amount of cryptocurrencies without spreading market fear. Hence an alternative is to put hedges in place to reduce the overall exposure over a longer period of time.

What is Fundamental Analysis in Online Trading?

SQUARED DIRECT Fundamental Analysis closely examines socio-political factors and economic data involved with the current market movement to predict future price movements. When identifying what moves prices in the market, traders can make better-informed decisions and avoid some of the inherent risks involved when trading the markets.

This guest post was provided by SQUARED DIRECT.

How news trading work?

Fundamental Analysis deals with economic variables that have the highest predictive value for each currency pair respectively. Its goal is to establish a forecasting model that focuses on the strongest market movers for the currency pair it analyses. Examples of relevant economic variables used to reach an overview of economic conditions affecting a currency pair are: news & events, financial reports, interest rates, economic data releases and economic indicators such as GDP, PMI, CPI and so forth.

Fundamental Analysis & Market Movement

The upwards and downwards price movement of currency pairs is influenced by economic and political events that take place in the countries whose national currencies are in the currency pair being analysed. But studying information that is only relevant to one currency pair is not what Fundamental Analysis is about. Fundamental Analysis requires having a look at many variables and even multiple currency pairs simultaneously to form the Big Picture which can allow a trader to make a better and more accurate prediction model on market price movement.

There is no real stability when it comes to the forex market, making it one of the most volatile and dynamic financial markets. Because of this high volatility, it is wise for traders and investors to have safe currencies to return to when trading trending currency pairs goes the wrong way. Such “safe” and strong currencies are the US dollar, the Swiss franc, and the Japanese Yen since their respective economies are considered the safest in the world.

News & Events

Prior to and after news announcements, currency pairs can move rapidly. News has the power to rock the market by increasing and decreasing volatility. Traders who closely follow the news and place trades based on them are called News Traders. Usually, their trading style is short-term trading.  News traders decide on their positions rapidly. Therefore, news trading is more demanding and carries significant risks with a high probability of slippage.

News Outlets for Traders

New traders must practice and experience before news trading live. You need to practice receiving, reading and applying fundamental analysis.

Economic Indicators for Fundamental Analysis

  • The CCI (Consumer Confidence Index) measures consumer confidence. A rise in consumer confidence could signify the strengthening of an economy.
  • The CPI (Consumer Price Index) is a statistical estimate of the changes in the price of services and consumer goods. It is used to measure inflation.
  • The DGO (Durable Goods Orders) is an indicator of future manufacturing activity
  • The ECI (Employment Cost Index) indicates rising and falling tendencies in employment costs. It measures inflation in salaries and benefits in the US.
  • The GDP (Gross Domestic Product) indicates the economic growth of a country. Production output, income, and expenditure determine GDP figures.  Some analysts use GDP as a sign of the standard of living. GDP is the market value of all goods and services in a country during a specific time period.
  • The IP (Industrial Production) indicated the industrial capacity of a country.
  • The IPCU (Industrial Production and Capacity Utilization) measures economic activity in Industrial Production. US Federal Reserve provides the IPCU data.
  • The NFP (NonFarm Payroll) is a monthly report by the US Department of Labor. This strong funamental indicator offers statistical data on the US labor market. The NFP figures have a strong impact on financial markets.
  • The PMI (Purchasing Managers Index) shows the percentage of employees in charge of goods and service acquisition in a certain sector of the economy. PMI over 50 shows an expanding the economy while under 50 shows shrinking.
  • The PPI (Producer Price Index) measures the average changes in manufacturing, mining, electricity and agriculture selling prices

 

Forex Trading is a Skill, Not a Shortcut to Riches

SQUARED DIRECT The most popular and prominent myth about forex trading is that it is possible for someone who has invested $100 to make millions in profit, easy and fast. Adding to it, is the myth that there is a magical sweet-spot in forex trading that can guarantee someone an always-win situation. Both myths couldn’t be further from the truth and are a quite dangerous mindset to have for anyone going into online trading.

Before you consider Forex trading, you need to be aware of the following facts

Trading Forex is not an express line from rags to riches

It would be great for everyone if it were that easy to make millions and billions with just a few dollars and a couple of mouse clicks. Unfortunately, for everyone, it isn’t. Online trading is demanding. It requires significant dedication of time and effort. You need to ask yourself if you are able and willing to commit to it before going at it.

An always-win situation does not exist; no Holy Grail in Forex Trading

The market is an untameable ever-fluctuating wave. It’s impossible for always winning without sustaining losses. Even expert traders and professionals have losses and they know that having losses is normal and to be expected. Learning to cope with loss and properly managing your risk exposure is vital to successful online trading. Accept that you will have to sustain losses during your trading before thinking about winning.

It will not take you out of debt if you can’t afford to eat or pay your bills

If your economic situation is dire and you are trying to find a quick way to pay your overdue financial debts, then forex trading is not for you. You should be considering online trading only when your economic situation allows you the affordability of losing X amount of invested money. This doesn’t mean that you will definitely lose your invested money but given the risk involved in trading the markets, all traders should be prepared that they could eventually lose their initially invested capital. If you can’t afford to potentially lose money, then you shouldn’t trade forex.

Your chances of success without practice, experience and calculated trading plans are minimal to none

Forex Trading is a skill. Like all skills it requires practice. Lots of practice. Through practice comes experience. And through experience a trader knows how to plan his strategies and how to apply them accordingly.  Practice takes time and requires dedication and effort. The best way to practice trading is with a free demo trading account. You can and should use it as your own experimentation lab where you can practice even if you are an expert trader, a place where you can test new strategies and plans or put your existing ones through many hypothetical scenarios. Practicing with a demo account allows you to experiment without having to risk real money since you will be trading with virtual money instead.

How crypto arbitrage bot works?

AtoZ Markets – Cryptocurrency is the biggest innovation on the internet until now, which has become popular through the creation of Blockchain technology. As the cryptocurrency trading has become very popular, most of the traders and investors are keen to know how crypto arbitrage bot works to make their effort soft and smooth. 

What is the Crypto Arbitrage Bot?

The crypto arbitrage trading bots are a set of instructions that execute the trades automatically without any human intervention. The trading bot has some major components regardless of language & framework.

We have discussed earlier what are crypto arbitrage trading BOTS in here

If a trader can build a strategy that can provide the profits repeatedly, there is no need to waste hours inform of the platform to do the same thing repeatedly. A bot can take thousands of decisions while a human brain can think of several. There are no emotions in Algorithmic trading, which can consistently execute the same strategy over time.

The Crypto Arbitrage strategy

Before proceeding further about How Crypto Arbitrage Trading Works, the trader has to set a trading strategy with good Risk: Reward and strong money management. Then compare a few different options to minimize your risk as much as possible. For high volatile pair, the volume should be lower to ensure that the market uncertainty cannot harm the investments.

To use the arbitrage strategies, the trader needs to follow some basic steps to ensure the automation to be profitable.

Building the BOT

  • Collect data on price via exchange APIs and price aggregators such as com.
  • Analyze and identify the data that can give the most likely arbitrage opportunities.
  • Automate the trading strategy to minimize the time per entry and exit of the trade.
  • Measure the strategy to include as many exchanges and pairs as possible to increase the variations.

Mitigate risks

  • The charges from trading and transferring should be minimized to confirm that the price spread is beneficial.
  • Check that liquidity will be high enough for the size of your trade on all pairs
  • If you are doing inter-exchange arbitrage, check that the network fees and transaction time of the coin you are transferring are taken into account.
  • Some exchanges will have higher withdrawal fees than the actual blockchain fees and often require more confirmations than most wallets.
  • Many irregularities can occur in real-world data collection, and that could cause disastrous errors, especially automate the trade completely.

How Crypto Arbitrage Bot Works?

In the history of cryptocurrency, there have been periods to produce cross border arbitrage opportunities. A paper from the University of Calgary highlights the possible arbitrage opportunities in Korean bitcoin markets that provided an average premium of 4% from 2016 to 2018. The study classifies two main causes of the premium, one is capital controls, and another is friction caused by the Bitcoin network.

This type of arbitrage is difficult to exploit. It is something beyond the scope of this article, but worth looking to understand How Crypto Arbitrage BOT Works.

Identify the market inefficiencies

There is no Holy Grail to have a very profitable trading strategy of any kind with writing some scripts or bots. This can only assist in information gathering and executing the trades.

To find the market inefficiencies, we cannot waste large amounts of time searching multiple exchanges and pairs of currencies by hand. It could take so long, and we would not be able to find them fast enough to make them work.

Aside from the consideration before building the strategy, we will need some additional set of criteria and heuristics. That is how it will confirm if an arbitrage trade will be possible.

On the other hand, the exchange trading fees should be low for things to increase the probability of profit.

If the trade is spatial arbitrage, the asset will transfer very quickly. The speed of the blockchain will determine this with TX fees, and the minimum amount of confirmations are required before debiting the trading assets.

The speed will depend on exchanges & blockchain used and the fees set.

Data Collection

To know the data of buying and selling rates, the user must use the websites that provide that data, like coinmarketcap.com. It is one of the reliable prices aggregating websites in crypto with over 2000 crypto assets listed.

After going to coinmarketcap.com, the user should click on the currency that would like to do arbitrage on. Then after pressing the exchange tab, click “sort by price” to see if there are any major differences. It should look like this.

Arbitrage strategy

The spread of an arbitrage trade is defined by the calculation mentioned below:

Bid (exchange A) – Ask (exchange B) = Spread

If the spread increases past a preset trigger value, then the trade should trigger.

Most arbitrage strategies require holding the amounts of both assets on both markets and simultaneously buying and selling of them. As it is a risk-free trade, it happens nearly instantly.

However, in the case of cryptocurrency, this would not be risk-free due to the high level of volatility. This risk can be minimized by “price risk.”

Price Risk means holding the trades indefinitely for arbitrage opportunities that could offset trading profits by a substantial margin.

This is how Crypto Arbitrage Bot Works by sending the assets from one market to another.

In this system, the spot price might be insufficient so that some additional statistical approach is required to increase the profit margin.

Intra-exchange arbitrage

Instead of spot prices, there are some statistical approach to see if there are particular pairs that often have low liquidity. In which the Arbitrage opportunity may take.

The arbitrage opportunities within an exchange between assets with several pairs will minimize the risks with the trade, like transaction time and fees.

It requires a script to iterate through all the pairs on some exchange. Here is the example of the public Bittrex API. This script will not produce some graphs besides the iterate. It will transfer information quickly to show what is going on with the data.

Inter-exchange arbitrage

Besides the Bittrex pairs, there is a way to find the biggest spread between Bittrex and Binance. This system works only between the Bittrex & Binance. (Github Code)

This two-place is good to start because of its consistency and volume.

The arbitrage trading bot works well in the crypto markets only. To develop an arbitrage strategy is quite complicated, and that required a lot of technical expertise. However, It is a unique idea to sell the cryptocurrencies at higher prices than the global average. The Crypto Trading Bot is an automatic trading system that has a risk of losing money, so everyone should be careful before investing in any system.

Think we missed something? Let us know in the comments section below.