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Is risk-taking compatible with forex trading?

There are many types of risks which are an inherent part of forex trading, from exchange rate and interest rate changes to marginal and transactional risks. However, this doesn’t mean that reckless risk-taking is a necessary or even advisable part of forex trading. Having a detailed plan and a strategic approach means you will be prepared to deal with risks and there consequences when and if things go awry.

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It would be impossible to trade in forex without assuming some type of risk, according to several experts. Does this mean that risk-taking is part-and-parcel of forex trading and that being prepared to take risks without fear of the consequences is an essential part of the game?

On the contrary, experts say that the question is how you identify and manage risk to fit your individual circumstances. Whether it is stocks or forex traders on a platform like FXPro, all investors should draw up unique and comprehensive risk management plans that would stop them from trading within acceptable risk parameters according to Stockmarket College.

“High risk is typically associated with high returns, although this isn’t always the case; high risks can also mean incredible losses,” Stockmarket College  warns, adding that you should get clarity on 

Trading Academy defines forex or foreign exchange as the trading currency pairs. “When you go long on EUR/USD, for example, you are hoping that the value of the Euro will increase relative to the U.S. Dollar,” they explain.

The article added that as with any investment you could “guess wrong” or add additional risk to your trading by targeting less popular currency pairs.

“It’s useful to keep in mind that the vast majority of forex transactions are made by banks, not individuals, and they are actually using forex to reduce the risk of currency fluctuation,” Trading Academy explains. “As an individual, you are less subject to many of these risks, and others can be minimized through sound trade management.”

In an article on iForex, the authors write “risk is an important part of trading and – in the right hands – it’s a valuable tool that can help you make trading decisions.”

They describe risk management is a way to identify, measure and analyse risk before taking a decision. “Miscalculated risk management can have substantial impact on companies and individual traders alike,” the article continues.

iForex advises tailoring the size of investment to size of capital. “Why? Because no trader – not even the most professional, experienced, gifted trader in the world – achieves a 100% rate of trading success,” they added.They also advise the use of “Stop Loss” – a market order allowing traders to limit potential losses and calculating the risk/reward ratio for a specific investment by “dividing the amount the investor will lose if the price moves unexpectedly by the profit the investor expects to make when the position closes”.

“It’s useful to keep in mind that the vast majority of forex transactions are made by banks, not individuals, and they are actually using forex to reduce the risk of currency fluctuation.”

Trading Academy identified the following risk factors in Forex trading:

EXCHANGE RATE RISK

This is caused by changes in the value of currency – due to shifts in demand. It can be significant The fact that off-exchange trading in foreign currency is not really regulated adds to the size of this particular type of risk as it means that there are no daily price limits, according to Trading Academy.

iForex explains that some types of currency are traditionally viewed as more risky than others but these have shown larger returns.

INTEREST RATE RISK

Interest rate risk refers to the profit and loss generated by fluctuations in price of currency including forward outright, futures, and options. Interest rate risk can be ameliorated by continuous analysis of the interest rate environment and timeous forecast of changes.

COUNTRY AND LIQUIDITY RISK

Periods of illiquidity have been observed in several countries and especially outside the United States and European markets.  Countries can also impose trading limits or restrictions on the amount of Forex to be traded, the volume and penalties. This can stop a trader from liquidating an unfavourable position. In some countries foreign exchange prices are also government regulated, Trading Academy states.

Investopedia explains further that interest rates have an effect on countries’ exchange rates meaning that an increase in interest rates would strengthen domestic currency in that country. They add that the converse is also true. This, the authors explain, can cause dramatic fluctuations in forex.

They add that it would be good to assess the structure and stability of a country before investing. “In many developing and third world countries, exchange rates are fixed to a world leader such as the US dollar. In this circumstance, central banks must sustain adequate reserves to maintain a fixed exchange rate,” the article added. “A currency crisis can occur due to frequent balance of payment deficits and result in devaluation of the currency.”

MARGINAL OR LEVERAGE RISK

As low margin deposits or trade collateral are required in forex trading, it would allow for a high degree of leverage (using other people’s money to invest) – but this also means that small price fluctuations can lead to considerable losses.

Investopedia explains that leverage involves borrowing a certain amount of the money needed to invest in something – and adds that foreign exchange trades often offer high amounts of leverage.

TRANSACTIONAL RISK

This describes the risks of procedural mistakes and mishaps like errors in communications and problems with the handling of an order according to Trading Academy.

Investopedia adds that this type of risk is amplified by time differences between the beginning of a contract and when it settles. The greater the time that passes, the greater the risk, they explain, adding that the reason for this is that it allows for the exchange rate to fluctuate.

The greater the time differential between entering and settling a contract increases the transaction risk.

iForex advises tailoring the size of investment to size of capital. “Why? Because no trader – not even the most professional, experienced, gifted trader in the world – achieves a 100% rate of trading success,” they added.

They also advise the use of “Stop Loss” – a market order allowing traders to limit potential losses and calculating the risk/reward ratio for a specific investment by “dividing the amount the investor will lose if the price moves unexpectedly by the profit the investor expects to make when the position closes”.

There are many types of risks which are an inherent part of forex trading, from exchange rate and interest rate changes to marginal and transactional risks. However, this doesn’t mean that reckless risk-taking is a necessary or even advisable part of forex trading. Having a detailed plan and a strategic approach means you will be prepared to deal with risks and there consequences when and if things go awry.

Health & Wellness

Supportive communities and progressive politics can reduce suicide risk among LGBTQ girls

New research shows that supportive communities – and a progressive political climate – can help mitigate the effects of stigma on mental health.

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Many LGBTQ youth continue to experience stigma and discrimination despite progress made in protecting human rights. Now new research from Canada’s UBC’s school of nursing shows that supportive communities – and a progressive political climate – can help mitigate the effects of stigma on mental health.

The researchers combined data from the BC Adolescent Health Survey with an inventory of different LGBTQ events and youth supportive service in communities across B.C. They found that the greater the LGBTQ youth supports in a community, the less likely sexual minority youth, particularly lesbian and bisexual girls, were to have suicidal thoughts or attempts, or to self-harm, compared to their counterparts in communities with fewer supportive events, groups and services. The team also found that lesbian and bisexual girls in communities where more people voted BC NDP in the 2013 provincial general election were less likely to report suicidal thoughts or self-harm.

Where lesbian, gay and bisexual youth live – their community environment, and the kind of LGBTQ-inclusive supports that are or aren’t there – appears to play a role in their odds of suicidality and self-harm.

In their inventory, the researchers counted LGBTQ-youth drop-ins and LGBTQ-youth friendly health services, as well as positive events like Pride parades, anti-bullying days, and meetings for parents, families and friends of LGBTQ people. Community resources that show support for LGBTQ people more generally, such as rainbow crosswalks, supportive faith communities, and queer-friendly coffee houses, also made the list.

“The impact of stigma and discrimination continues to put the health of LGBTQ youth at risk, but this risk isn’t equal everywhere,” said lead researcher Elizabeth Saewyc, a UBC nursing professor and director of Stigma and Resilience Among Vulnerable Youth Centre (SARAVYC). “Our research found that where lesbian, gay and bisexual youth live – their community environment, and the kind of LGBTQ-inclusive supports that are or aren’t there – appears to play a role in their odds of suicidality and self-harm.”

Saewyc says research shows that safe and inclusive schools, particularly those with gender and sexuality alliances, or GSAs, contribute to LGBTQ youth well-being, but this is among the first studies in Canada to look at the importance of the wider community at the same time.

“Even after accounting for school environments, our study found community supports and progressive political climates contribute to lesbian and bisexual girls’ health. It’s an important point for health care professionals and policymakers to consider – that LGBTQ visibility and support throughout communities can make a difference. We also need to recognize that the work is not yet done–we still have a long way to go to protect the health and well-being of all LGBTQ youth,” said Saewyc.

The research was published in Preventive Medicine.

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Health & Wellness

Hedonism can lead to happiness

Of course self-control is important, but research on self-regulation should pay just as much attention to hedonism, or short-term pleasure. That’s because new research shows that people’s capacity to experience pleasure or enjoyment contributes at least as much to a happy and satisfied life as successful self-control.

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Relaxing on the sofa or savoring a delicious meal: Enjoying short-term pleasurable activities that don’t lead to long-term goals contributes at least as much to a happy life as self-control, according to new research from the University of Zurich and Radboud University in the Netherlands. The researchers therefore argue for a greater appreciation of hedonism in psychology.

We all set ourselves long-term goals from time to time, such as finally getting into shape, eating less sugar or learning a foreign language. Research has devoted much time to finding out how we can reach these goals more effectively. The prevailing view is that self-control helps us prioritize long-term goals over momentary pleasure and that if you are good at self-control, this will usually result in a happier and more successful life.

“It’s time for a rethink,” says Katharina Bernecker, researcher in motivational psychology at the University of Zurich. “Of course self-control is important, but research on self-regulation should pay just as much attention to hedonism, or short-term pleasure.”

That’s because Bernecker’s new research shows that people’s capacity to experience pleasure or enjoyment contributes at least as much to a happy and satisfied life as successful self-control.

Distraction disrupts pleasure

Bernecker and her colleague Daniela Becker of Radboud University developed a questionnaire to measure respondents’ capacity for hedonism, i.e. their ability to focus on their immediate needs and indulge in and enjoy short-term pleasures. They used the questionnaire to find out whether people differ in their capacity to pursue hedonic goals in a variety of contexts, and whether this ability is related to well-being.

They found that certain people get distracted by intrusive thoughts in moments of relaxation or enjoyment by thinking about activities or tasks that they should be doing instead. “For example, when lying on the couch you might keep thinking of the sport you are not doing,” says Becker. “Those thoughts about conflicting long-term goals undermine the immediate need to relax.” On the other hand, people who can fully enjoy themselves in those situations tend to have a higher sense of well-being in general, not only in the short term, and are less likely to suffer from depression and anxiety, among other things.

More isn’t always better

“The pursuit of hedonic and long-term goals needn’t be in conflict with one another,” says Bernecker. “Our research shows that both are important and can complement each other in achieving well-being and good health. It is important to find the right balance in everyday life.”

People’s capacity to experience pleasure or enjoyment contributes at least as much to a happy and satisfied life as successful self-control.

Unfortunately, simply sitting about more on the sofa, eating more good food and going to the pub with friends more often won’t automatically make for more happiness. “It was always thought that hedonism, as opposed to self-control, was the easier option,” says Bernecker. “But really enjoying one’s hedonic choice isn’t actually that simple for everybody because of those distracting thoughts.”

Conscious planning of downtime

This is currently a topical issue with more people working from home, as the environment where they normally rest is suddenly associated with work. “Thinking of the work you still need to do can lead to more distracting thoughts at home, making you less able to rest,” says Bernecker.

So what can you do to enjoy your downtime more? More research is needed, but the researchers suspect that consciously planning and setting limits to periods of enjoyment could help to separate them more clearly from other activities, allowing pleasure to take place more undisturbed.

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Health & Wellness

Laughter acts as a stress buffer – and even smiling helps

People who laugh frequently in their everyday lives may be better equipped to deal with stressful events – although this does not seem to apply to the intensity of laughter.

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People who laugh frequently in their everyday lives may be better equipped to deal with stressful events – although this does not seem to apply to the intensity of laughter. These are the findings reported by a research team from the University of Basel in the journal PLOS ONE.

It is estimated that people typically laugh 18 times a day – generally during interactions with other people and depending on the degree of pleasure they experience. Researchers have also reported differences related to time of day, age, and gender – for example, it is known that women smile more than men on average.

Now, researchers from the Division of Clinical Psychology and Epidemiology of the Department of Psychology at the University of Basel have recently conducted a study on the relationship between stressful events and laughter in terms of perceived stress in everyday life.

Questions asked by app

In the intensive longitudinal study, an acoustic signal from a mobile phone app prompted participants to answer questions eight times a day at irregular intervals for a period of 14 days. The questions related to the frequency and intensity of laughter and the reason for laughing – as well as any stressful events or stress symptoms experienced – in the time since the last signal.

Using this method, the researchers working with the lead authors, Dr. Thea Zander-Schellenberg and Dr. Isabella Collins, were able to study the relationships between laughter, stressful events, and physical and psychological symptoms of stress (“I had a headache” or “I felt restless”) as part of everyday life. The published analysis was based on data from 41 psychology students, 33 of whom were women, with an average age of just under 22.

Intensity of laughter has less influence

The first result of the observational study was expected based on the specialist literature: in phases in which the subjects laughed frequently, stressful events were associated with more minor symptoms of subjective stress. However, the second finding was unexpected.

When it came to the interplay between stressful events and intensity of laughter (strong, medium or weak), there was no statistical correlation with stress symptoms. “This could be because people are better at estimating the frequency of their laughter, rather than its intensity, over the last few hours,” says the research team.

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Health & Wellness

Experiences of loneliness may differ by age

Some factors were found to be associated with loneliness across all age groups. These included living alone, frequency of neighbour contact, psychological distress, and psychological and emotional wellbeing. The strongest association with loneliness was found for those who felt excluded from society.

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Loneliness in adult life is experienced differently depending on age, according to a study published in the open access journal BMC Public Health. The research concludes that there can be no ‘one-size-fits-all’ approach to reducing loneliness, as factors associated with it, such as contact with friends and family, perceived health or employment, may differ across the phases of the adult life span.

Thanée Franssen, the corresponding author, said: “The majority of studies focusing on loneliness have thus far been performed among specific age groups, such as the elderly or teenagers, or individuals with specific health conditions. To our knowledge, none of these studied the factors associated with loneliness among adults and how these change as people age.”

A team of researchers at Maastricht University and in the Public Health Service South-Limburg in the Netherlands used data collected in the Netherlands from September to December 2016 to examine associations between demographic, social and health-related factors and loneliness in 6,143 young (19-34 years), 8,418 early middle-aged (35-49 years) and 11,758 late middle-aged adults (50-65 years).

Overall, 10,309 (44.3%) individuals reported experiencing loneliness. Among young adults, 2,042 (39.7%) individuals reported feelings of loneliness, compared to 3,108 (43.3%) early-middle aged adults, and 5,159 late middle-aged adults (48.2%).

Some factors were found to be associated with loneliness across all age groups. These included living alone, frequency of neighbour contact, psychological distress, and psychological and emotional wellbeing. The strongest association with loneliness was found for those who felt excluded from society.

Some factors associated with loneliness were found to be present in specific age groups only. Young adults showed the strongest association between contact frequency with friends and loneliness. Educational level was associated with loneliness among young adults only, while an association between employment status and loneliness was found solely among early middle-aged adults. Frequency of family contact was associated with loneliness only among early and late middle-aged adults. For late middle-aged adults only, perceived health was associated with loneliness.

The authors suggest that people may feel lonely if what is the norm for their age group, such as completing school, being employed, having a partner or having children, deviates from their actual situation. As different factors are perceived to be the norm for different age groups, this may explain some of the difference in factors associated with loneliness between age groups.

Thanée Franssen said: “The identification of the factors associated with loneliness is necessary to be able to develop and target appropriate interventions. Unfortunately, most of the current interventions seem to be limited in their effect. A possible reason for this may be that most interventions for adults are universal. Results of this study showed that interventions should be developed for specific age groups.”

The authors caution that some factors that may affect people’s perception of loneliness, such as relationship quality, were not included in the current study, as they were not part of the original data collection. Due to the cross-sectional nature of the study, it was not possible to establish cause and effect.

Thanée Franssen said: “Our results also suggest that during the current COVID-19 pandemic, feelings of loneliness among adults may be impacted in different ways according to the important factors of their life phase. For example, young adults are not able to interact with their friends or classmates face to face anymore. This may need to be taken into account when considering the impact on loneliness of the current pandemic.”

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NEWSMAKERS

Research from Lenovo & Intel finds that tech could be great equalizer among different cultures

More than half of global respondents say that a company’s diversity and inclusion policies are “extremely” or “very” important when deciding where to apply and whether to accept an offer.

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The first chapter of a new global research report by Lenovo and Intel finds that technology will play an integral role in achieving diversity and inclusion (D&I) in the workplace of the future.  With the power to bridge accessibility gaps, connect people who are otherwise divided, and expand the impact of upskilling and progressive training programs, tech already facilitates the ability to work in more dynamic, flexible ways than ever before.

The joint global study explores how people around the world view D&I in their personal and professional lives, and their perspective on the role technology plays to address systematic inequities, create more access, and enable growth.

“We know that when organizations prioritize diversity and inclusion, financial performance, innovation, and talent acquisition and retention flourish,” says Lenovo’s Yolanda Lee Conyers, Chief Diversity Officer and President of the Lenovo Foundation. “As the makers of devices that enable connectivity across cultural and geographic boundaries, tech companies like Lenovo have an obligation to ensure that products are created with diverse consumers in mind, and that can only be achieved with a diverse and inclusive workforce.”

“Intel has a long-standing commitment to diversity and inclusion. We believe that transparency is key, and our goal is to see our representation mirror the markets and customers we serve. Just as we apply our engineering mindset to create the world’s leading technological innovations, we do the same with our D&I strategies, using data to inform our decisions and sharing it transparently to drive clear accountability and deliver results across the industry,” says Barbara Whye, Chief Diversity & Inclusion Officer and VP of Social Impact and Human Resources at Intel. “We know that to truly progress D&I, it takes companies working together and being a global company, this work can’t be limited to the US only. That’s why with both companies sharing a rich history of collaboration, we decided to extend our partnership and conduct a global survey.”

“We know that when organizations prioritize diversity and inclusion, financial performance, innovation, and talent acquisition and retention flourish.”

The findings within the technology chapter suggest that, if a more diverse and inclusive workplace is the goal, technology has the potential to get us there, as it facilitates human connection, understanding, and ultimately, empathy.

The study shows the potential of technology does not come without apprehension, though. Many respondents indicated they worry about whether technology, including AI, could potentially silence or leave behind those historically marginalized or underrepresented. Although participants expressed concerns over the harmful potential of AI, those in emerging markets are most optimistic, with more than 8-in-10 participants across Brazil and China agreeing that AI can be used to make the workplace more diverse and inclusive.

Lenovo and Intel’s Diversity and Inclusion in the Global Workplace study explores the attitudes of approximately 5,096 respondents across five key geographic markets of China, the United States, Germany, the United Kingdom and Brazil between December 19, 2019 and January 7, 2020. This chapter focusing on the theme of technology is the first of four total installments. Additional chapters regarding “What Workers Want”, “Modern Mentorship”, and “D&I as a Workplace Trailblazer” are to be announced throughout the remainder of the year.

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Health & Wellness

Text messaging as the next gen of therapy in mental health

With the COVID-19 pandemic, many people’s schedules have been upended, which may prevent individuals with mental illness from having routine access to a therapist, such as parents who have children at home. Texting can bridge the gap.

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In the US alone, it is estimated that approximately 19 percent of all adults have a diagnosable mental illness. Clinic-based services for mental health may fall short of meeting patient needs for many reasons including limited hours, difficulty accessing care and cost.

In the first randomized controlled trial of its kind, a research team investigated the impact of a texting intervention as an add-on to a mental health treatment program versus one without texting. A text-messaging-based intervention can be a safe, clinically promising and feasible tool to augment care for people with serious mental illness, according to a new study published in Psychiatric Services.

Ninety-one percent of participants found the text-messaging acceptable, 94 percent indicated that it made them feel better and 87 percent said they would recommend it to a friend.

“This study is very exciting because we saw real improvement in those who utilized the text messaging-based intervention on top of normal care. This was true for individuals with some of the most serious forms of mental illness,” explained co-author, William J. Hudenko, a research assistant professor in the department of psychological and brain sciences at Dartmouth, and an adjunct assistant professor of clinical psychology in Dartmouth’s Geisel School of Medicine. “The results are promising, and we anticipate that people with less severe psychopathology may even do better with this type of mobile intervention.”

With the COVID-19 pandemic, many people’s schedules have been upended, which may prevent individuals with mental illness from having routine access to a therapist, such as parents who have children at home.

“Texting can help bridge this gap, by providing a means for mental health services to be continuously delivered. A text-messaging psychotherapy is an excellent match for the current environment, as it provides asynchronous contact with a mental health therapist while increasing the amount of contact that an individual can have,” explained Hudenko.

For the study, the research team examined the impact of text-messaging as an add-on to an assertive community treatment program versus the latter alone. Through an assertive community treatment program, those with serious mental illness have a designated team who helps them with life skills, such as finding a job and housing, managing medications, as well as providing daily, in-person clinic-based services. People with serious mental illness are likely though to experience symptoms each day for which they may need additional therapy.

The study was a three-month pilot, which was assessor blind. There were 49 participants: 62 percent had schizophrenia/schizoaffective disorder, 24 percent had bipolar disorder and 14 percent had depression. Assessments were conducted at baseline, post-trial (three months later) and during a follow-up six months later.

A text-messaging psychotherapy is an excellent match for the current environment, as it provides asynchronous contact with a mental health therapist while increasing the amount of contact that an individual can have.

Licensed mental health clinicians served as the mobile interventionists. They received a standard training program on how to engage effectively and in a personal way with participants. The mobile interventionists were monitored on a weekly basis to ensure that they were adhering to the treatment protocol. Throughout the trial, over 12,000 messages were sent, and every message was encoded, monitored and discussed with a clinician.

The results demonstrated that 95 percent initiated the intervention and texted 69 percent of possible days with an average of four texts per day. On average, participants sent roughly 165 or more text messages and received 158 or more messages. The intervention was found to be safe, as there were zero adverse events reported.

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