5 Reasons the Financial Markets Need dealCancellation

26-Nov-2018

The financial markets can be an intimidating place for retail traders. The advent of computer-based trading programs and algorithms have introduced so much volatility in the market that it’s often difficult for traders to capitalize on market-moving events without fear of reprisal.

We look at five challenges every trader faces, whether they are new or seasoned market veterans. And we ask the all-important question – is there an easy solution?

1. Risks of trading market-moving events.

One of the contrary things about the market is that market volatility is where the largest opportunity to make good profits lie, but it is also when imprudent traders could lose the most. Major events such as nonfarm payrolls, central bank statements and GDP reports can move the markets fast and sharp. Following the Brexit referendum, the pound crashed to a 31 year low and lost 10% against the US dollar. James Hanbury famously made £110 million by shorting the pound going against what most people were thinking would happen. While he got ‘lucky’ or was able to use the huge resources at his disposal as part of the company he works at, he could equally have lost out big. Not many traders at home have the connections to help them take on these risks.

2. Learning from mistakes but surviving to trade another day.

The financial markets are highly competitive and shouldn’t be taken lightly. For many traders, a big loss early on in their career could scar them for life. Rather than learn from their mistakes, they’ve just assumed a major financial burden that will deter them from ever trading again.

3. Overcoming fear and greed.

One of the most critical aspects of becoming a successful trader is mastering trading psychology, a phrase that describes all of the mental aspects that determine whether an individual will succeed in the financial markets. In the world of trading, the emotions of fear and greed often produce the most negative results. Greed can lead to over-trading, making larger deal sizes than can be handled and moving the stop-loss of a losing deal instead of accepting the loss. On the flip side, once a trader has been bitten by the markets then fear may begin to take control, making them hesitate and miss good opportunities.

4. Because demo accounts just don’t cut it.

Many brokers offer free demo accounts to new and inexperienced traders. While this wonderful tool which allows traders to test out a broker’s platform and actually place trades, it will never be equivalent to live market conditions for the simple reason you are not trading your own funds. Demo accounts can be a great learning experience, but what a trader really needs is to experience the vagaries of the markets under live conditions, risking their own funds.

5. Trusting your broker.

There are literally thousands of brokers worldwide – some more legitimate than others. A trader that has taken the time to learn the markets, research and analyse the trade they have in mind, checked the charts and done due diligence to aim for a successful deal should have a good chance to succeed. But, will their broker let them down? Is their platform stable and do they executes deals fast and at the rates expected by traders? A trader will never know if their broker is a good match for them until they start trading with them.

An easy solution

With many of these challenges that traders face every day in mind, easyMarkets developed a ground-breaking new risk management tool – dealCancellation. An industry-first, this tool enables traders to cancel losing deals up to 60 minutes after opening. Costing just a few pips of the original trade, dealCancellation gives the peace of mind to the trader that if the markets go against them, the can cancel the trade and get their margin returned to their account.

Traders may now confidently trade the big news events on the economic calendar, knowing that if they made a bad decision, they can just reverse it. dealCancellation allows them to learn the markets by trading under live conditions and using their own funds. It’s a quick and easy way to test out if easyMarkets is the right broker for them by giving them the ability to open a few trades, see how the platform works, but be safe in the knowledge that the balance of their account is not harmed.

Where dealCancellation really comes into its own is the psychological support it can give to traders. Those hesitant to enter the markets, or uncertain of which direction a trade might go, or wanting to make larger deal sizes than they normally would can use this tool as part of their risk management strategy.

As much as everyone aims to succeed, seasoned traders know that sometimes you lose – that is a simple fact of the markets. Now there’s a tool that allows you to lose your trade, but not your funds.