Forexmagnates’ team caught up with Steven Dooley, Head of Research, at ForexCT an Australian based FX and CFD broker.
Can you give an overview of ForexCT, your business model, client type, platform, advantages?
ForexCT is one of Australia’s leading providers of forex, commodity and CFD trading services.
We provide over 40 FX pairs, the leading commodities such as oil, gold and silver, and major stock market indices and shares.
Our clients are forex traders that understand the importance of safe, secure and transparent trading. We offer fixed spreads, no slippage, free guaranteed stop losses
ForexCT’s focus on providing the best risk control mechanisms in the market has seen many sophisticated traders switch from our competitors.
Our experienced account managers have the skills to provide assistance to both novice and the most experienced of traders.
We offer our own in-house built PROfit platform, industry standard MetaTrader4 and iPhone and iPad applications.
If you can touch on the current regulation for FX and CFD’s in Australia, there is talk of reducing leverage, will this affect you, to what extent?
The main focus of ASIC’s increased regulation of FX and CFDs is to ensure that clients are well educated and clearly understand the benefits and dangers of trading.
We welcome this drive as we have long had a focus on education. Our experienced team of account managers have many years of experience in the market and any requirement to increase education levels will play into one of our biggest strengths.
QE3 is much-anticipated, what are its implications?
The US Federal Reserve seems likely to initiate a third program of quantitative easing. While it will add some momentum to the US economy, the structural problems (high levels of consumer debt) are the main reason for the slow emergence out of the recession. So, QE3 will provide some assistance, but it won’t ever solve the problem.
For FX traders, the major impact of a third round of quantitative easing will be an increase in risk instruments like gold and silver.
Gold is hailed as the ‘safe haven’ investment however recently we saw a complete decline in stocks, dollar and gold? What affected this and where do you see gold by year end?
The collapse in confidence after the US downgrade and the Greek problem became more pronounced saw all assets lose value (apart from major bond markets).
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While gold is seen as a ‘safe haven’ in terms of allocation away from the US dollar, in times of crisis, the US bond market remains the only real ‘safe haven’. The move lower suggests gold is a favoured trade – just like any other trade – rather a true ‘safe haven’.
The Greek dilemma has been in question for a while, what exactly is the problem and is there any way to sort out the mess?
Joining the Eurozone allowed profligate economies to suddenly ramp up their debt holdings in a way they had previously been impossible. The entry into the Eurozone coincided with a decade of easy credit and like many individuals, European nations are now facing large debt burdens and rising interest rates.
In the short term, a solution will be produced, because the key countries involved, Germany and France, do not want to let the Euro collapse. Additionally, they have the financial wherewithal to provide the necessary support.
Over the longer term, we believe this will result in a greater financial integration of Eurozone countries. The Eurozone countries that are currently struggling with debt problems, however, will pay the price, through austerity measures, for a very long time.
If a new trader is entering the FX markets what advice / guidance would you give, on how to get started, what to learn, how much time one needs.
Start trading! There’s no teacher better than the market!
Start small and accept that it might take a few months to start to understand the market.
Forget about fundamentals and try and learn one or two entry signals.
Focus on managing your risk/return as this is the most important determinant in your trading success.
What instruments do you think novice traders should trade (3) and why?
I believe FX is the best market to start trading in.
First, because it is an extremely cheap way of trading. While share trading, at least in Australia, can cost you at least $40 for both side of a transaction, in FX, the cost can be as little at $2 or $3!
Second, the market is simple to understand and the risk management is the best in the business. Risk management is the most important tool in trading and FX provides high levels of liquidity to ensure you can always get in and out when you need.
Lastly, the FX market is uniquely suited to technical analysis and there is very little information that is not in the public domain.