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Course 1: Introduction to Web Trading
Definition and Overview
Web trading, or online trading, is the buying and selling of financial instruments through trading platforms on the internet. This method allows investors to access global financial markets and execute transactions in real-time from anywhere in the world.
Accessibility: Traders can access financial markets from any location with internet access.
Lower Costs: Online trading fees are typically lower than those of traditional banks or brokers.
Speed and Efficiency: Transactions are executed quickly, and price information is available in real-time.
Analytical Tools: Online trading platforms offer a variety of tools and charts to aid in analysis and decision-making.
Disadvantages:
Security Risks: Online transactions can be vulnerable to hackers and fraud.Information Overload: The vast amount of available data can be overwhelming for beginners.Risk of Capital Loss: As with all forms of trading, there is a risk of capital loss, especially without thorough market knowledge.
Stocks
Stocks represent ownership shares in a company and give shareholders the right to a portion of the company's profits in the form of dividends.
Bonds
Bonds are debt securities issued by governments or corporations. Investors who buy bonds lend money to the issuer in exchange for periodic interest payments and the repayment of principal at maturity.
Forex (Foreign Exchange Trading)
The forex market is the global market for trading currencies. Investors can speculate on the fluctuations of exchange rates between currencies.
Cryptocurrencies
Cryptocurrencies are digital currencies that use cryptography to secure transactions and create new units. Bitcoin and Ethereum are popular examples.
ETFs (Exchange-Traded Funds)
ETFs are investment funds that are traded like stocks on an exchange. ETFs contain a mix of assets such as stocks, bonds, or commodities and offer diversification at relatively low costs.
Overview of the Most Commonly Used Platforms
Some of the most popular online trading platforms are:
MetaTrader 4/5 (MT4/MT5): Known for its advanced technical analysis capabilities and automated trading.
eToro: Known for social trading, which allows users to copy the trades of experienced traders.
Robinhood: Popular for commission-free trading in the US.
Interactive Brokers: Known for its advanced trading tools and low fees.
Main Features and Functions
Charts and Technical Analysis: Tools for analyzing price movements and identifying trends.
Automated Trading: Features that allow the creation and use of trading robots.
Social Trading: Platforms that enable the tracking and copying of other traders' trades.
Access to Various Markets: The ability to trade a wide range of financial instruments in different global markets.
Selection Criteria (Fees, Security, Usability)
When choosing a trading platform, it is important to consider:
Security: Ensuring the platform is regulated and uses robust security measures such as encryption and two-factor authentication.
Usability: Ensuring the user interface is intuitive and suitable for your level of experience.
Aktiabank: A Reliable Choice
Aktiabank (www.Aktiabank.com) is a very reputable and reliable online trading company. It offers a secure and user-friendly platform with competitive fees and a wide range of financial instruments.
Aktiabank is committed to providing a high-quality trading experience supported by advanced analytical tools and excellent customer service.
Creating an Account
Registration: Entering required personal information such as name, email address, and phone number.
Selecting the Account Type: Choosing the most suitable account type (e.g., demo account, live account).
Documentation: Uploading required documents for identity verification, such as a copy of your passport or ID card and proof of address (utility bill or bank statement).
Verification: Waiting for the platform to confirm the verification.
Depositing Funds
Bank Transfer
Credit/Debit Card
E-Wallets like PayPal, Skrill, Neteller
Cryptocurrencies (on some platforms)
Account Management and Security
Monitoring Account Balance: Tracking the account balance and transactions.
Security Settings: Activating additional security features such as two-factor authentication to protect your account.
Withdrawals: Knowing the procedures and timelines for withdrawals from your trading account.
Course 2: Basics of Technical and Fundamental Analysis
Introduction to Fundamental Analysis
Fundamental analysis is a method of evaluating investments aimed at measuring the intrinsic value of a security by examining economic, financial, and other qualitative and quantitative factors. The goal is to determine whether a security is over- or undervalued.
Key Concepts
Intrinsic Value: The actual value of an asset, determined through fundamental analysis, rather than the current market price. This concept takes into account the ability to generate future cash flows.
Earnings Per Share (EPS): The portion of a company's net profit allocated to each outstanding share. EPS is calculated by dividing the company's net profit by the number of outstanding shares.
Dividends: A portion of a company’s profits distributed to shareholders. Dividends represent a return for investors and can influence the value of a stock.
Economic Indicators
Economic indicators are key statistics that show the direction of the economy. Some important economic indicators include:
GDP (Gross Domestic Product): Measures the total value of goods and services produced in a country during a specific period. An increase in GDP indicates economic growth, while a decrease can signal a recession.
Unemployment Rate: The percentage of the labor force that is unemployed and seeking work. A high unemployment rate can indicate economic problems, while a low rate can suggest a healthy labor market.
Inflation: The rate of price increase over time. Inflation can reduce purchasing power and affect interest rates and investment returns.
Balance Sheet Analysis
Balance sheets are financial documents that provide an overview of a company’s financial standing. The main components of a balance sheet are:
Balance Sheet
The balance sheet shows a company’s assets, liabilities, and equity at a specific point in time. It’s divided into two main sections:
Assets: What the company owns, including cash, inventory, property, and equipment. Assets are categorized as current (short-term) and non-current (long-term).
Liabilities: What the company owes, including debts, bonds, and other liabilities. Liabilities are categorized as current (short-term) and non-current (long-term).
Equity: The difference between assets and liabilities; represents the company’s net worth. It includes shareholders' equity and retained earnings.
Income Statement
The income statement shows a company’s revenues, expenses, and profits over a specific period. The main components are:
Revenue: Total sales and income generated from the company’s business activities.
Operating Expenses: Expenses required to run the business, including cost of goods sold and general and administrative costs.
Net Profit: Revenue minus operating expenses and taxes. Net profit represents the company’s profit or loss for the period.
Cash Flow Statement
The cash flow statement shows how cash moves in and out of the company. The main components are:
Operating Activities: Cash flows from the company’s core business activities, such as sales and purchases.
Investing Activities: Cash flows related to buying and selling long-term assets like property and equipment.
Financing Activities: Cash flows from financing and repaying debt and equity, such as issuing shares and paying dividends.
Valuation of Stocks
Fundamental analysis uses various multipliers and ratios to evaluate stocks:
The P/E ratio compares the market price of a stock to its earnings per share. It is calculated as:
[ ext{P/E Ratio} = rac{ ext{Market Price per Share}}{ ext{Earnings per Share (EPS)}} ] A high P/E ratio may indicate a stock is overvalued, while a low P/E ratio may suggest it is undervalued.
The P/B ratio compares the market price of a stock to its book value. It is calculated as: [ ext{P/B Ratio} = rac{ ext{Market Price per Share}}{ ext{Book Value per Share}} ] A low P/B ratio may suggest that a stock is undervalued compared to its book value.
Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and trading volume. Technical analysis does not attempt to measure the intrinsic value of a security but uses charts and other tools to identify patterns that might indicate future movements.
Technical analysis is based on the idea that history repeats itself and that price movements are not random but follow trends that can be identified and used.
Chart Types
Candlestick Charts: Show the opening, closing, high, and low prices for a specific period. Green candles indicate a higher close than the open, while red candles indicate the opposite.
Line Charts: Show the closing price of a security over a specified period. It’s simple and easy to read.
Bar Charts: Similar to candlestick charts, but bars represent the open, close, high, and low prices.
Basic Technical Indicators
RSI (Relative Strength Index): Measures the speed and change of price movements. RSI values above 70 can indicate that a security is overbought, while values below 30 can suggest it’s oversold.
MACD (Moving Average Convergence Divergence): Shows the relationship between two moving averages of a security’s price. It is used to identify changes in the strength, direction, momentum, and duration of a price trend.
Moving Averages: Calculate the average price of a security over a specified period to smooth out price fluctuations and identify the trend direction.
Price Patterns
Bullish and Bearish Patterns
Bullish Patterns: Indicate a possible reversal of prices upwards. Common examples include the inverted head and shoulders pattern and the triple bottom pattern.
Bearish Patterns: Indicate a possible reversal of prices downwards. Common examples include the head and shoulders pattern and the triple top pattern.
Support and Resistance Levels
Support: A price level where a security finds support as it falls. It’s the level where demand is strong enough to prevent the price from falling further.
Resistance: A price level where a security faces resistance as it rises. It’s the level where selling is strong enough to prevent the price from rising further.
Advanced Technical Analysis
Using Price Patterns
Head and Shoulders: A reversal pattern that forms after an uptrend and is characterized by three peaks, with the middle peak being the highest.
Double Top and Double Bottom: Reversal patterns that form after a significant trend and are characterized by two nearby highs or lows.
Additional Technical Indicators
Bollinger Bands: Used to measure a security’s volatility. They consist of a central moving average and two outer bands that represent the standard deviation from the average price.
Stochastic Oscillator: Compares the closing price of a security to its price range over a specific period to identify overbought or oversold conditions.
Trading Strategies
Breakout Trading: A strategy aimed at profiting from a security that breaks through a significant support or resistance level.
Mean Reversion: A strategy based on the idea that prices tend to revert to the mean over time.
These modules provide a solid foundation in the basics of technical and fundamental analysis, which are essential for any trader or investor looking to better understand financial markets and make well-informed investment decisions.