Peer to peer lending is growing rapidly with Lending Club, one of the pioneer businesses in the market having recorded a growth of more than 300 percent in the last 12 months as at the beginning of 2013. Loan originations at Lending Club have hit a $1 billion mark and the prospects for growth are high. According to Robert Warren, a business professor at University of North Dakota, he noted that person to person lending is one of the emerging financial lending alternatives that meet the needs of people who are underserved, cannot use the traditional sources or they are not interested in these conventional banks at all.
Banks have been known to be very rigid in offering their services. You will most likely get into a bank to negotiate for a loan application and approval but all in vain after spending your valuable time. However, with the online person to person lending, you are able to get suitable loan that can meet your financial challenges. One of the main questions, which critics in the financial market ask is; what is driving the rapid and steady growth of the peer to peer lending?
Brad Lensing, the chief marketing officer with Prosper lending marketplace, which is a San Francisco based lender, believes that there are two things which are leading to growth of peer to peer lending. One is that this lending is an alternative to traditional bank-based lending. When consumers do not solve their problems in the banks, they have to look elsewhere and this is where they get the services they have not received from banks and other traditional institutions.
Conventional banks are not easy to deal with and most consumers find it very discouraging to deal with banks when it comes to borrowing. This is why when presented with a less rigid lending platform; consumers are willing to borrow from person to person lending companies. On the side of lending, there is more access of a credit asset class in the personal loans something that has previously not been there.
People are able to obtain their loans online and the process is easy though with strict measures. The borrowers understand that they are not taking funds from an institution but the resources of individuals pulled together. The average loan at Prosper is placed at $8,500 and this has produced good returns to the investors since the inception of the company in 2006.
With the growing consumer asset class, it means that this credit sector is stretching its arms and within a few years, peer to peer lending has become a billion dollar industry.
Peer to peer lending is a unique financial platform, which offers both the investor and borrower an opportunity to benefit from the business model. People who need quick money can get loans of up to thousands of dollars.
These loans are unsecured and they are granted to consumers provided that you meet credit requirement and other risk check parameters. On the other hand, the investors who are seeking for ways to diversify their investment portfolio find it quite convenient to invest in peer to peer lending by putting up money to fund one or more loans. This is a unique setting of lending and you cannot get it anywhere like in banks.
Tuesday, November 19, 2013
Peer to Peer Lending: an Effective Alternative for Personal Loans
Peer to peer lending is done online and you will not find it in banks, and other brick and mortar lending institutions. It is a platform where the borrower borrows from the investor. Although initially the investors consisted of mainly individuals, today, institutions are now dipping their hands in the business. The lending business works by meeting the investor and the borrower in one platform. If you need money for your use such as home improvement, repair your car or refinance your credit card loan, you log on to the website like Prosper or Lending Club and fill in the application form.
If the approval succeeds, the money is deposited in your account within a few days. It will depend on the customer risk profile to determine the interest rate. Most of the rates range between 6 to 10 percent but for the high risk borrower, they may be as high as 35 percent. If you are seeking for a way you can make return on your investment, you can join the community and put in your money.
The companies are always on the lookout of investors to expand their resource base. As the popularity of these peer to peer lending increases, it is expected that more investors will join the platform. With as little as $25, you can be part of the funding team of the customers’ loans thus gaining a share of this rapidly growing lending business. According to Mitchel Harad, who is the Lending Club’s vice president of marketing and advertising, these loan facilities are not easy and don’t just go to anyone.
Since these are unsecured loans, the lending has strict regulations that help minimize the risks involved in lending. Consumers can get unsecured loans of up to $35,000 and this clientele group consists mainly of the good to excellent credit only. One thing with the p2p lending is that it may not be helpful for the bad credit consumer. However, the lending can be used to refinance credit card debts.
Close to 70 percent of Lending Club’s customers use the loans to pay off their high interest credit card debts. The interest and payments to investors at Lending Club is done on pro rata basis and the company takes one percent fee. In a period of 3 years, Lending Club has surpassed the $ billion mark in loans issued and the prospects for growth are high. There is also the possibility that the company is set for an IPO listing.
In a similar trend, as of October 2012, Prosper, another player in the p2p lending was sitting at $425 million loan originations since its inception and $15 million in loans originations in the month of October. If you need a loan to remodel your home, repair your car, refinance your high interest rate credit card balance, then the peer to peer loans may be a good option.
In the same way, if you want to invest and gain some good returns from your dollars, you can pull your resources together at Prosper and Lending Club p2p lending companies. As the consumers and investors gain confidence, the market is expected to even growth further.
If the approval succeeds, the money is deposited in your account within a few days. It will depend on the customer risk profile to determine the interest rate. Most of the rates range between 6 to 10 percent but for the high risk borrower, they may be as high as 35 percent. If you are seeking for a way you can make return on your investment, you can join the community and put in your money.
The companies are always on the lookout of investors to expand their resource base. As the popularity of these peer to peer lending increases, it is expected that more investors will join the platform. With as little as $25, you can be part of the funding team of the customers’ loans thus gaining a share of this rapidly growing lending business. According to Mitchel Harad, who is the Lending Club’s vice president of marketing and advertising, these loan facilities are not easy and don’t just go to anyone.
Since these are unsecured loans, the lending has strict regulations that help minimize the risks involved in lending. Consumers can get unsecured loans of up to $35,000 and this clientele group consists mainly of the good to excellent credit only. One thing with the p2p lending is that it may not be helpful for the bad credit consumer. However, the lending can be used to refinance credit card debts.
Close to 70 percent of Lending Club’s customers use the loans to pay off their high interest credit card debts. The interest and payments to investors at Lending Club is done on pro rata basis and the company takes one percent fee. In a period of 3 years, Lending Club has surpassed the $ billion mark in loans issued and the prospects for growth are high. There is also the possibility that the company is set for an IPO listing.
In a similar trend, as of October 2012, Prosper, another player in the p2p lending was sitting at $425 million loan originations since its inception and $15 million in loans originations in the month of October. If you need a loan to remodel your home, repair your car, refinance your high interest rate credit card balance, then the peer to peer loans may be a good option.
In the same way, if you want to invest and gain some good returns from your dollars, you can pull your resources together at Prosper and Lending Club p2p lending companies. As the consumers and investors gain confidence, the market is expected to even growth further.
Lending Club $1 Billion Dollar Mark...What Does It Mean for Peer to Peer Lending?
In 2012, Lending Club, one of the pioneers of peer to peer lending investment recorded a historical growth by reaching a $1 billion mark in loans issued. Since the start of the lending platform in 2007, there have been ups and downs but amidst these challenges, Lending Club has managed to grow strongly. Its growth had reached as high as 300 percent for the past 12 months as at the beginning of 2013. Such growth shows that there is plenty of cash available to lend and that investors are seeking for ways in which they can put in their cash for returns.
The model of investment put forward by Prosper and Lending Club seems to have succeeded and now it is only a matter of time before this lending business becomes a mainstream activity in the nation. The growth seems to suggest that this might only be the initial steps for a longer journey of the decentralization of the country’s financial sector. Similar models which began in the same way are such as PayPal and today, this online money transfer has changed the lives of many people in the world.
Peer to peer lending is expected to grow to be global financial solutions. In 2013, person to person loans by Lending Club are expected to hit a %1.7 billion. From the firm’s commendable growth of more than 90,000 loans totaling to more than $1 billion, it was a good indication that this form of lending is now a mature technical development that can be duplicated for nation’s growth.
Lending Club has managed to alleviate some of the stumbles and over excitements which were witnessed from the word go when the business was launched in 2007. Passing through an expensive and cost-consuming scrutiny process by the securities and exchange commission-SEC, the company has stood against all odds and has demonstrated that the business model can work.
According to the CEO and co-found of Lending Club, Renaud Laplanche, an influencing personality in the financial world today, the company is putting in place many proprietary factors that help judge an applicant’s creditworthiness before the loans can be granted and this is coupled with FICO score rating check. Lending Club could be signalling a paradigm shift on how the consumer perceives lending because it seems that the consumer is walking away from the financial institutions and wishing to borrow from fellow consumer who is an investor.
The Lending Club business may be signalling the same change in consumer behaviour which was witnessed when the once obscure YouTube was introduced in the internet. YouTube has changed the way in which online video is done and the same could happen to peer to peer lending with Lending Club.
The one problem facing peer to peer lending is that lenders do not have the resources and motivation to be able to draw borrowers with enticing offers like 0 percent intro rates and cashback perks as found in many credit cards. This is because the model of the business is still young and the consumer is being evaluated to determine the investment sustainability.
The business should be designed so that it does not appear as a last resort for consumers. As it aims reaching the $2 billion growth mark, Lending Club will ensure that it deals with the consumer intuitively to win his or her confidence.
The model of investment put forward by Prosper and Lending Club seems to have succeeded and now it is only a matter of time before this lending business becomes a mainstream activity in the nation. The growth seems to suggest that this might only be the initial steps for a longer journey of the decentralization of the country’s financial sector. Similar models which began in the same way are such as PayPal and today, this online money transfer has changed the lives of many people in the world.
Peer to peer lending is expected to grow to be global financial solutions. In 2013, person to person loans by Lending Club are expected to hit a %1.7 billion. From the firm’s commendable growth of more than 90,000 loans totaling to more than $1 billion, it was a good indication that this form of lending is now a mature technical development that can be duplicated for nation’s growth.
Lending Club has managed to alleviate some of the stumbles and over excitements which were witnessed from the word go when the business was launched in 2007. Passing through an expensive and cost-consuming scrutiny process by the securities and exchange commission-SEC, the company has stood against all odds and has demonstrated that the business model can work.
According to the CEO and co-found of Lending Club, Renaud Laplanche, an influencing personality in the financial world today, the company is putting in place many proprietary factors that help judge an applicant’s creditworthiness before the loans can be granted and this is coupled with FICO score rating check. Lending Club could be signalling a paradigm shift on how the consumer perceives lending because it seems that the consumer is walking away from the financial institutions and wishing to borrow from fellow consumer who is an investor.
The Lending Club business may be signalling the same change in consumer behaviour which was witnessed when the once obscure YouTube was introduced in the internet. YouTube has changed the way in which online video is done and the same could happen to peer to peer lending with Lending Club.
The one problem facing peer to peer lending is that lenders do not have the resources and motivation to be able to draw borrowers with enticing offers like 0 percent intro rates and cashback perks as found in many credit cards. This is because the model of the business is still young and the consumer is being evaluated to determine the investment sustainability.
The business should be designed so that it does not appear as a last resort for consumers. As it aims reaching the $2 billion growth mark, Lending Club will ensure that it deals with the consumer intuitively to win his or her confidence.
Personal loans: the Growth of Peer to Peer Lending
It has not been simple, but peer-to-peer lending has grown beyond all odds to be one of the fastest expanding lending investment in the financial market today. As demonstrated by two key players in the business, Lending Club and Prosper, person-to-person lending also known as p2p lending has shown a remarkable growth since 2007. Despite going through a time consuming scrutiny by the Securities and Exchange Commission- SEC back in 2008, these two companies have clearly shown that there is great potential in the peer-to-peer lending.
But what has made peer to peer lending a popular investment in today’s highly volatile lending industry? The ability to earn double digit returns from lending is one reason why low interest rates investors are seeking for alternative lending in p2p investment. With returns ranging from 6 to 10 percent or even higher, investors are making good returns in their investment.
After skepticism on the way in which person-to-person lending could thrive amidst the risk associated with the lending, institutional investors are now joining the community and they are channeling in money in both Prosper and Lending Club, the two pioneers of p2p lending.
It is estimated that there is over $100 million of investment by institutions at Lending Club and the amount is expected to increase in 2013. This gives borrowers and investors more confidence in lending practices. Another reason which may have led to fast growth of these kinds of loan facilities is that consumers want to get out of credit card debt. Credit card debt continues to be a burden for many people and with the financial institutions being reluctant to offer credit facilities to people with bad credit, peer-to-peer lending remains a viable option for borrower.
One of the most common types of borrowing in both Prosper and Lending Club is debt consolidation. After experiencing high penalties in form of interest rates on credit card balances owing to late payments, cardholders are not finding it more convenient to consolidate their loans for a cheaper low interest loan in peer-to-peer lending.
Considering that credit card debt may attract interest rates to the highs of 35 percent APR, consumers can get a refinancing option with person-to-person lending. A borrower could get a 3 years peer-to-peer loan with an interest rate of about 10 percent and be able to pay off the high interest credit card loans within a relatively short period of time.
Banks are still tight in their lending and this has locked many borrowers out of borrowing from these institutions. Individuals and small businesses are finding it difficult to obtain loans from conventional banks and this gives then an option to go for the peer-to-peer lending. The credibility of person-to-person lending has grown substantially meaning that consumers and investors are gaining confidence with this form of lending.
This is further substantiated by the rapid growth that has seen the lending business hit a record high of $1 billion in 2012. If you are struggling with a credit card debt, you may consider p2p lending as a viable way of consolidating your debt.
But what has made peer to peer lending a popular investment in today’s highly volatile lending industry? The ability to earn double digit returns from lending is one reason why low interest rates investors are seeking for alternative lending in p2p investment. With returns ranging from 6 to 10 percent or even higher, investors are making good returns in their investment.
After skepticism on the way in which person-to-person lending could thrive amidst the risk associated with the lending, institutional investors are now joining the community and they are channeling in money in both Prosper and Lending Club, the two pioneers of p2p lending.
It is estimated that there is over $100 million of investment by institutions at Lending Club and the amount is expected to increase in 2013. This gives borrowers and investors more confidence in lending practices. Another reason which may have led to fast growth of these kinds of loan facilities is that consumers want to get out of credit card debt. Credit card debt continues to be a burden for many people and with the financial institutions being reluctant to offer credit facilities to people with bad credit, peer-to-peer lending remains a viable option for borrower.
One of the most common types of borrowing in both Prosper and Lending Club is debt consolidation. After experiencing high penalties in form of interest rates on credit card balances owing to late payments, cardholders are not finding it more convenient to consolidate their loans for a cheaper low interest loan in peer-to-peer lending.
Considering that credit card debt may attract interest rates to the highs of 35 percent APR, consumers can get a refinancing option with person-to-person lending. A borrower could get a 3 years peer-to-peer loan with an interest rate of about 10 percent and be able to pay off the high interest credit card loans within a relatively short period of time.
Banks are still tight in their lending and this has locked many borrowers out of borrowing from these institutions. Individuals and small businesses are finding it difficult to obtain loans from conventional banks and this gives then an option to go for the peer-to-peer lending. The credibility of person-to-person lending has grown substantially meaning that consumers and investors are gaining confidence with this form of lending.
This is further substantiated by the rapid growth that has seen the lending business hit a record high of $1 billion in 2012. If you are struggling with a credit card debt, you may consider p2p lending as a viable way of consolidating your debt.
Why Low Credit Score will Not Prevent Consumers from getting online Personal Loans
In the past, it has been difficult for consumers with bad credit or low credit score to obtain personal loans but this trend is changing as we notice more lending for these consumers. Both formal and non formal lending institutions are discovering that they cannot do without the bad credit consumer. Today, the online personal loans have become popular. These loans are offered by banks and other non-traditional lending institutions.
Good examples are cash advance, payday loans or next pay-check loans and peer to peer loans. Before the economic crisis which hit many parts of the globe in 2007, the lending industry was thriving well. Many consumers borrowed more than they could handle to repay back. Because of the low interest rates on loan facilities, people were willing to borrow more and the lenders had the capital to dish out to consumers.
However, when the credit crunch hit the economy, things turned around and consumers were not willing to borrow because they did not have the money to repay. Banks and financial lenders held with them a lot of money and they had to device ways to entice the consumers. What happened is that they made the interest rates very low and consumers were more attracted.
There was over borrowing and multiple borrowing and this resulted to aspects like loan delinquencies, foreclosures, bankruptcies, loan defaults and other financial challenges. Many consumers found themselves on the receiving end as their credit score dropped to record low levels. Some of the credit score effects they suffered during the pre-economic crisis and post economic crunch are still reflecting in their credit reports.
In the recent years, consumers who have remained locked out of borrowing by traditional financial institutions have seen some limelight. The lenders who had abandoned the consumers with bad credit are today making a comeback. In addition, there are trends of fast short term cash advances, which are designed by payday lenders.
Consumers still struggling with the bad credit report can gain access to short term loans like payday and peer to peer loans. Banks are offering salary advance loans or cash advance loans which are basically secured by a person’s salary. One of the things which are making consumers to develop more interest in the short term loans is because of the loan approval flexibility.
These loans are easy to obtain and considering that previously, one of the impediments consumers have faced is the complexity of acquiring a loan approval. Getting a loan has been very cumbersome and frustrating and this is why consumers are even willing to go for the high interest rate payday loans offered online. There are no credit credits for you to obtain these short term online loans like payday.
The loans are approved within a few hours or less than 24 hours and the funds are released to the consumer’s account in less than a day or two. Because consumers still in bad credit are unable to save for emergencies, this means that when pressing financial needs arise, they do not have money at their disposal to meet these needs. The only place they can turn to is the fast cash online personal loan facilities.
Good examples are cash advance, payday loans or next pay-check loans and peer to peer loans. Before the economic crisis which hit many parts of the globe in 2007, the lending industry was thriving well. Many consumers borrowed more than they could handle to repay back. Because of the low interest rates on loan facilities, people were willing to borrow more and the lenders had the capital to dish out to consumers.
However, when the credit crunch hit the economy, things turned around and consumers were not willing to borrow because they did not have the money to repay. Banks and financial lenders held with them a lot of money and they had to device ways to entice the consumers. What happened is that they made the interest rates very low and consumers were more attracted.
There was over borrowing and multiple borrowing and this resulted to aspects like loan delinquencies, foreclosures, bankruptcies, loan defaults and other financial challenges. Many consumers found themselves on the receiving end as their credit score dropped to record low levels. Some of the credit score effects they suffered during the pre-economic crisis and post economic crunch are still reflecting in their credit reports.
In the recent years, consumers who have remained locked out of borrowing by traditional financial institutions have seen some limelight. The lenders who had abandoned the consumers with bad credit are today making a comeback. In addition, there are trends of fast short term cash advances, which are designed by payday lenders.
Consumers still struggling with the bad credit report can gain access to short term loans like payday and peer to peer loans. Banks are offering salary advance loans or cash advance loans which are basically secured by a person’s salary. One of the things which are making consumers to develop more interest in the short term loans is because of the loan approval flexibility.
These loans are easy to obtain and considering that previously, one of the impediments consumers have faced is the complexity of acquiring a loan approval. Getting a loan has been very cumbersome and frustrating and this is why consumers are even willing to go for the high interest rate payday loans offered online. There are no credit credits for you to obtain these short term online loans like payday.
The loans are approved within a few hours or less than 24 hours and the funds are released to the consumer’s account in less than a day or two. Because consumers still in bad credit are unable to save for emergencies, this means that when pressing financial needs arise, they do not have money at their disposal to meet these needs. The only place they can turn to is the fast cash online personal loan facilities.
Are Banks and Card Issuers Doing Enough to Prevent Phishing of Credit Card Information
There has been increased online phishing activities targeting online bank account and credit card holders and if something is not done to prevent these theft activities, the consumers may be placed in a difficult situation. When card users’ information is compromised, it can be used to steal money from their bank accounts. However, despite the large amount of information provided on the internet, consumers still fall prey of these phishing activities.
The most commonly used tool is the email where users receive phishing emails that purport to have been sent by their banks or credit card issuers. The main question is; are banks and credit card issuers doing enough to protect their consumers?
Although there is a lot of information on the internet about internet phishing and identify theft, it is important for banks and credit card issuers to dedicate themselves and provide continuous updates on security threats that consumers may face. The same emails that the phishers or thieves use can also be used by the banks and card issuers to disseminate useful information about security vulnerabilities the users are likely to get when using their cards.
Consumer needs to be constantly educated and kept updated of the latest developments on internet security threats. In addition, the companies need to provide a security information page on their website where users can always visit and read more on new developments. The card issuers and banks need to constantly remind their customers to log in their website and check any security notifications.
Card holders need to understand that they should not click any links that are send directly to their emails directing them to visit a site and enter their personal details like passwords, emails, name, date of birth, card numbers, PIN and any other confidential information. Today, internet thieves are using sophisticated ways to get personal information from card and bank account holders.
A common occurrence is where the phishers send spoofing emails, which have bank and credit card logo information. These emails look as though they come from the companies but this is not true. If you examine where the mails come from, you will find that they are send from a third party address that does not match the card issuer or bank address. The email may be that of the bank or card issuer but the origin of the message does not come from the bank or card issuer but from other funny web address. You should not just check the address of the sender but also the origin of the message i.e. “mailed-by”
In order to prevent these phishing and identity theft practises, card users are strongly advised to refrain from clicking on suspicious links in email messages. As a rule of thumb, banks and credit card issuers will not request for a card re-activation or any other personal information through an email link. Never click the link because it will lead you to a fake website that looks the same as that of the credit card company or bank.
When answering an email, you should not provide any personal information. In addition, you should not enter any personal information in a pop up page that comes on your screen or browser. Always ensure that the website of your credit card company or bank is encrypted with an SSL certification. To conform that the website is really encrypted with an SSL certificate, you need to look for the padlock, the green address bar or the “https” features when you enter your personal information.
It is recommended that you have antivirus software that is able to protect you from online phishing activity. Some of the free antivirus software offered do not provide advanced internet security protection on internet banking and online bank account and credit card access. Therefore, it is suggested that you source for an antivirus that can protect your online bank account and credit card use.
The most commonly used tool is the email where users receive phishing emails that purport to have been sent by their banks or credit card issuers. The main question is; are banks and credit card issuers doing enough to protect their consumers?
| Internet phishing |
Although there is a lot of information on the internet about internet phishing and identify theft, it is important for banks and credit card issuers to dedicate themselves and provide continuous updates on security threats that consumers may face. The same emails that the phishers or thieves use can also be used by the banks and card issuers to disseminate useful information about security vulnerabilities the users are likely to get when using their cards.
Consumer needs to be constantly educated and kept updated of the latest developments on internet security threats. In addition, the companies need to provide a security information page on their website where users can always visit and read more on new developments. The card issuers and banks need to constantly remind their customers to log in their website and check any security notifications.
Card holders need to understand that they should not click any links that are send directly to their emails directing them to visit a site and enter their personal details like passwords, emails, name, date of birth, card numbers, PIN and any other confidential information. Today, internet thieves are using sophisticated ways to get personal information from card and bank account holders.
A common occurrence is where the phishers send spoofing emails, which have bank and credit card logo information. These emails look as though they come from the companies but this is not true. If you examine where the mails come from, you will find that they are send from a third party address that does not match the card issuer or bank address. The email may be that of the bank or card issuer but the origin of the message does not come from the bank or card issuer but from other funny web address. You should not just check the address of the sender but also the origin of the message i.e. “mailed-by”
In order to prevent these phishing and identity theft practises, card users are strongly advised to refrain from clicking on suspicious links in email messages. As a rule of thumb, banks and credit card issuers will not request for a card re-activation or any other personal information through an email link. Never click the link because it will lead you to a fake website that looks the same as that of the credit card company or bank.
When answering an email, you should not provide any personal information. In addition, you should not enter any personal information in a pop up page that comes on your screen or browser. Always ensure that the website of your credit card company or bank is encrypted with an SSL certification. To conform that the website is really encrypted with an SSL certificate, you need to look for the padlock, the green address bar or the “https” features when you enter your personal information.
It is recommended that you have antivirus software that is able to protect you from online phishing activity. Some of the free antivirus software offered do not provide advanced internet security protection on internet banking and online bank account and credit card access. Therefore, it is suggested that you source for an antivirus that can protect your online bank account and credit card use.
Monday, November 18, 2013
How Much Should You Trade With as a Beginner in Futures Trading?
Trading in commodity futures market requires a good plan and there are a number of aspects which should be observed to trade profitably. The market is confronted with risks that leave many traders at the losing end. About 85 to 95% of traders in this market do not trade profitably and this means that the money is earned by a few traders. These are the traders who apply strict trading discipline and manage their losses effectively.
If you are a beginner, you should not risk trading with a large amount. You may begin with a few hundreds of dollars and trade carefully. It is essential that you do not go for big profits because this means trading with big risks. The larger the amount you trade with, the more you risk losing that money. Therefore, when you are wrong, you will suffer big losses. This can send you out of the market fast than you anticipated.
Commodity futures market can shift in price movements unexpectedly. Most of the successful traders make a lot of losing trades but the good thing is that they leverage what they have to lose. They trade with manageable amounts and even when they trade with big money, they apply the stop loss order strategy very effectively.
When you realize that you are faced with a margin call, it means that something is wrong in you trading. You should never accept to be confronted with margin calls because it implies that your trade is not correct. You have to check the contract size. For example, if you have$5,000 account equity, you should not trade with more than $250 in any one given trade.
You need to give yourself a risk or loss margin of about 2% and this will ensure that in the event you trade in loss, the total amount lost is not too big. Losses cannot be eliminated and therefore you have to manage them. You will incur numerous losses as you trade but you have to keep them minimal. When you get a profiting trade position, you have to optimize that chance.
This means that you have to hang on in that position until you have earned something substantial. The numerous losing trades you face are covered by the large profiting trades you occasionally get. In essence, if you are a beginner in futures commodity trading, you should not risk your money by trading with big amounts.
You need to trade with a plan and follow the trend. Trade with low amounts and scale down your losses significantly. With about $200 dollars, you can start trading in a commodity futures market. This means that you will not get a lot of profit but the good thing is you are gaining experience.
As you begin to understand how the market trades, you can increase the amount successively. You need to have a long term goal and avoid short end goals that will only plunge you into pitfalls. Many beginners who trade in this market lose their amount before they even learn the basics and tactics of trading in commodity futures markets.
If you are a beginner, you should not risk trading with a large amount. You may begin with a few hundreds of dollars and trade carefully. It is essential that you do not go for big profits because this means trading with big risks. The larger the amount you trade with, the more you risk losing that money. Therefore, when you are wrong, you will suffer big losses. This can send you out of the market fast than you anticipated.
Commodity futures market can shift in price movements unexpectedly. Most of the successful traders make a lot of losing trades but the good thing is that they leverage what they have to lose. They trade with manageable amounts and even when they trade with big money, they apply the stop loss order strategy very effectively.
When you realize that you are faced with a margin call, it means that something is wrong in you trading. You should never accept to be confronted with margin calls because it implies that your trade is not correct. You have to check the contract size. For example, if you have$5,000 account equity, you should not trade with more than $250 in any one given trade.
You need to give yourself a risk or loss margin of about 2% and this will ensure that in the event you trade in loss, the total amount lost is not too big. Losses cannot be eliminated and therefore you have to manage them. You will incur numerous losses as you trade but you have to keep them minimal. When you get a profiting trade position, you have to optimize that chance.
This means that you have to hang on in that position until you have earned something substantial. The numerous losing trades you face are covered by the large profiting trades you occasionally get. In essence, if you are a beginner in futures commodity trading, you should not risk your money by trading with big amounts.
You need to trade with a plan and follow the trend. Trade with low amounts and scale down your losses significantly. With about $200 dollars, you can start trading in a commodity futures market. This means that you will not get a lot of profit but the good thing is you are gaining experience.
As you begin to understand how the market trades, you can increase the amount successively. You need to have a long term goal and avoid short end goals that will only plunge you into pitfalls. Many beginners who trade in this market lose their amount before they even learn the basics and tactics of trading in commodity futures markets.
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