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FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Tue 23 Feb

Where is the US dollar heading?

What is the dollar outlook at the moment? The US dollar made a good start in 2021 after a sharp fall in 2020, but January's bounce, driven by profit-taking and optimism of faster economic recovery, was short-lived. The Dollar Index which measures the performance of the dollar against six major currencies - was in a steep downtrend during most of 2020, falling around 7% during the year and hitting the lowest in nearly three years. The greenback spiked during the March crisis as investors rushed into the traditional safe-haven asset due to high uncertainty, but massive Central Bank support and prospects of coronavirus vaccine reversed the trend and sent the dollar sharply lower. In comparison to the 2007/2009 recession when the dollar made wild gyrations, the action in 2020 was milder, due to the global crisis caused by the pandemic and similar policies of Central Banks and governments that include massive fiscal supports and ultra-low interest rates. The main factors that influence US dollar performance Interest rates The US Federal Reserve is expected to keep interest rates at record lows and continue asset purchases as the Central Bank made a shift in its policy in 2020, signaling that the interest rates will start to rise only when inflation makes a significant move and rises to a 2% target zone and until labor market conditions return to levels consistent with the Fed's assessment of maximum employment. According to the Central Bank's forward guidance, the downward pressure on longer-term rates is expected to persist and ultra-loose policy to stay in place until at least early 2023 that keeps grim outlook for the dollar. Economic activity The US economy contracted by 3.5% in 2020, due to the severe impact of the coronavirus pandemic. The gross domestic product slumped 33.3% in the second quarter, when the outbreak hit the United States, but rebounded 33.4% in the third quarter, as optimism about economic recovery rose.  The new COVID-19 wave and subsequent tough restrictive measures slowed the recovery greatly, resulting in a 4% contraction in the fourth quarter of 2020. The activity in the US manufacturing sector has slowed sharply in mid-2020, falling to the lowest levels in more than a decade, but managed to recover in the second half of the year, peaking at a six-year high in December. Improving conditions in the manufacturing sector counter more negative figures from the services sector, which was strongly impacted by a new set of measures on the second wave of coronavirus. Labor The US employment was seriously affected by the unprecedented impact of Covid-19 pandemic on the US labor sector, with the magnitude of job loss in March and April 2020, not seen since the end of  World War II. The employment in the US slumped by 14.5% in 2020, compared to a 6.3% drop during the 2007/2009 Great Recession,  whilst unemployment spiked at 14.7% last year, against 10% rise during the previous crisis period. The US labor sector has lost 20.6 million jobs during the March lockdown, when the crisis peaked, with a subsequent quick rebound in May and June, but a renewed weakness was seen in the July-December period, when the US non-farm payrolls were in a steady descent and hit the first negative result of -227K in December. The mild and below expectations recovery in January suggested that a rise in employment regained traction, but the pace of recovery remains slow, signaling a prolonged period of recovery that had a negative impact on the dollar and resulted in a recovery stall. The jobless claims have significantly dropped from their 6.8 million peak in March, but the number of Americans filling for government unemployment benefits remains stubbornly high and above the highest of the 2007/2009 Great Recession. Persisting weakness in the US labor sector signals that recovery process is going to be longer than initially anticipated and is going to move at a much lower-than-expected pace. Fiscal stimulus The US government has already pumped around $3 trillion into the economy at the beginning of crisis, with $900 billion being added in December. The aid from the first package has already drained and a long discussion about the new package, worth $1.9 trillion, much needed to keep the economy afloat, is underway in the US Congress. The US lawmakers are so far unable to reach an agreement on a size of the package, despite strong warnings that the US faces a dangerous wave of bankruptcies and unemployment if it does not maintain fiscal support until the coronavirus-driven crisis ends. The 2021 outlook The outlook for the US dollar for 2021 remains weak, with the dollar expected to remain under increased pressure during the first half of the year, on anticipation that economic recovery is not going to gain pace during this period. Although the coronavirus vaccine has been rolled out and immunization started in the US, it is expected to take time until it starts giving significant results in stopping the raging pandemic and in bringing the life and economic activity back to pre-pandemic levels. Strong risk appetite in the market, driven by hopes of new fiscal aid package that would boost economic recovery, continues to lift US stock indices and pressure the dollar, with the S&P500, Dow Jones and Nasdaq100 hitting new record highs and signaling further advance. High oil prices also weigh on the US dollar. The crude oil made significant recovery after a historic fall during the March-April 2020 period, when oil prices hit zero level at one point. Improved sentiment on rising expectations that recovery in global oil demand will speed up and return to normality after being slashed during the crisis, continues to lift oil prices and boost the risk sentiment. The dollar index is pressuring key technical supports at $90/$88 zone, with stronger bearish acceleration expected on breach of these levels. The weakness is expected to persist in the coming months, with some relief for the greenback to be expected in the second half of the year if economic recovery picks up, although most of market observers do not expect a significant rise of the greenback this year. Invest in yourself. See our forex education hub. This article was submitted by Windsor Brokers.

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ECONOMICS | EDUCATION FROM BROKERS Tue 23 Feb

The power and influence of consumers on value-based pricing

Understanding the impact consumers have on value Defining value-based pricing Value-based pricing or value pricing is a business strategy where a company sets its pricing on a particular product on most customers' perceived value. Naturally, a product that possesses better quality and innovation subjects more to value-based pricing than commoditized products. Commoditized items are items that are very similar to what the competitors offer. Perceived value A perceived value is a customer's assessment and evaluation of a product's quality over the others. It is an extent to how much a customer is willing to pay for a said product. A customer chooses benefit over its function in a purchase. A company's marketing strategy significantly affects a customer's perceived value on a product in the market. Customers change how they see a product's worth, mostly if the marketing managers showcased its qualities like convenience, aesthetic, and innovativeness excellently. Let's enumerate five useful marketing strategies to increase a product's perceived value: The physical appearance, aesthetic value, or design How a product saves one's time, money, and effort Accessibility of the product's service The convenience of the location Effortless and multiple ways of purchasing Value-based pricing vs. Cost-plus pricing Customers consider how a particular product they want to purchase can enhance how they look to other people. Other companies even conduct surveys to know how excellent or satisfied customers are. They also want to know which price to set and which area to improve next. These are effective ways to use value-based pricing. Some excellent examples include: Art. Art takes on different forms, but its basis on pricing usually depends on a customer's perception. Niche products. A paranormal device has a very high value to a paranormal expert but means very little to others. In this case, since there are only a few interested people, there will also be very few supplies. This reason is why suppliers will charge high.  Consulting. Consultation with professionals like lawyers to solve a problem that involves lawsuits are usually expensive, but people will always be willing to pay to win. Medicine. People would pay a hefty amount to finance medical treatment. Sometimes, these treatments' prices are usually higher than their original cost with the knowledge that people are almost always willing to go to very far extents to save a loved one's or one's life. Veblen goods. Luxury items such as bags, shoes, clothes, and cars are all based on a customer's perception of value. These items improve one's self-image. While value-based pricing focuses on a customer's perception of how much a product is worth, cost-plus pricing, on the other hand, is the sum of adding a specific price or percentage and the price of producing a single product. It is regardless of other competitor's pricing and other external factors. For example, a renowned fashion company spends about $100 producing a single jacket sets its price at $200. Its markup price is $100, which is 100% more than its unit cost. This method is how cost-plus pricing works. Retailing companies use this method more often since they can customize how they put markups on top of various unit costs. Invest in yourself. See our forex education hub.

TECHNICAL ANALYSIS | EDUCATION FROM BROKERS Tue 23 Feb

Understanding the importance of forex signals in making decisions

How to capitalise on forex signals People provide forex signals to traders to give the best ideas, interpretation, and guidance as the markets open. For most people, it is easier to gain money while trading charts and make buy or sell decisions no more than once a day. The signals are made to be as useful as possible. Most of the time, the tool they use within the signals is the identification of exact prices or narrow price ranges where the market might turn. Generally, people know this as 'support and resistance, but they can also think of them as pivotal points. The Use of Forex Signals All signals start with a discussion of the prospect that the previous day's signal generates any open trade in the same currency pair. After that, the piece goes on to give the best times of the day in which to open any new trade, and they might risk the position size on a trade that day. Then, it will determine possible support and resistance levels with an accompanying illustrative chart. Going with the signals indicates taking note of these levels and observing during the suggested hours to see if the price hits any of them. If the prices hit a resistance level after going up, traders wait to see a bearish turn in the price. And this means they believe it is going to go down. Then, when the price touched a support level after going down, they wait to see a bullish turn in the price - meaning traders believe it will go up. The problem now is how to identify a turn in the price when it has a high probability of becoming the best point in entering a winning trade. Identifying a Price Turn As the candlestick completing the turn closed, what traders will do next depends if they are entering a long trade where they want the price to move up or a short trade where they hope for the price to move down. In the long trade, it's understandable to place a buy order one pip above the turn candlestick's high. And this is with a stop loss one pip below the lowest price reached in the move. On the other hand, in a short trade, the best way is to place a sell order one pip below the turn candlestick's low. And this is with a stop loss one pip above the highest price reached in the move. Now, for a trade to move forward, the price needs to reach the level where the order is set. Typically, the best trades occur fast. The longer the time elapses before it hits the price, the less attractive the trade becomes - 'decaying' over time.  So, the best thing to do when the trade entry has not been triggered an hour after entering the order (during the next one hour candlestick), it makes sense to cancel the trade. One more reason to cancel the trade is when the price reaches the stop loss before the entry becomes triggered because this means that the support or resistance level became unreliable. To do this, it is vital to check the screen from the time of entering the trade until the entry is triggered or until the time limit for an entry expires so traders can cancel the trade manually. Invest in yourself. See our forex education hub.

FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Mon 22 Feb

Silver outlook — What's in store for the white metal?

A closer look at what is driving silver prices While the grind higher continues for most securities this February, silver has remained in the spotlight for several reasons. Kicking off the month was a historic level of volatility in the physical silver space, with coordinated attention coming from Reddit via Wall Street Bets. This saw silver prices spike to a yearly high, overtaking the $30 handle briefly. Since then, however, prices have failed to retake this key level as momentum during the surge seemingly stalled out.  Why the Silver Price Surge Could Just be Getting Started What exists now in the silver market is a very unique phenomenon. This is due in large part to the physical market being virtually nonexistent, with supplyrunning dangerously thin since the buyout earlier this month.  As such, there remains very little physical silver for purchase, which in tandem with a catalyst could trigger a massive surge higher in the near- or mid-term. Of course, much of the silver trade also takes place in the form of exchange-traded-funds (ETFs), namely iShares Silver Trust (NYSE:SLV).  Together with other silver ETFs, these instruments have also benefitted from a buyout of the physical market and will continue to do so moving forward. After peaking at $30 in February 2021, silver spot prices retreated as low as $26 days later before finding firm support. What this tells us is that there is a clear floor to recent prices, with this level serving as a key metric for ensuring a consequent bull run. Since hitting this level on February 4, silver prices have been pointed upwards, with plenty of room upwards on the technical charts.  Medium to longer-term forecasts this year have largely called for ranges from $30 to $100 in extreme scenarios. Of course, there is a lot of ground to cover until either of these figures can be reached, though there are a lot of factors silver is benefitting from. Tailwinds and Economic Benefits Silver is a strong instrument to own during periods of inflation. With central banks worldwide intent on printing more money to help kindle a recovery from Covid-19, inflationary concerns are once again in the spotlight. Silver stands to be a prime beneficiary of this, with hard assets such as precious metals always maintaining their luster during these periods.  As an asset however, silver remains vastly undervalued at current levels, given other macro-economic alternatives to choose from.  Renewed stimulus measures in the United States and elsewhere only add to the strength of silver moving forward, making it difficult to be bearish on silver prospects. A groundswell of liquidity is quite likely to push inflation levels higher, setting up silver as a solid play in 2021.  One of the most commonly observed metrics is the Gold/Silver ratio. A reading below 77.0 indicates bullishness for silver, with this metric currently below 66.0  Industrial Demand Coming Back 2020 for many countries saw a huge hit to industrial output and activity. The lingering effects of Covid-19 are still with many developed countries despite the rollout of vaccines, though industry is expected to normalize later this year. This is a huge boon for silver given its status as an industrial metal. Furthermore, silver is seen as a key player in many specific segments that are expected to draw renewed interest. This includes the solar industry, with the incoming Biden administration in the United States largely expected to focus more on during the new decade. With supply constraints looming by virtue of an absence of physical markets, the demand for silver is likely to increase.  Prices have continued an upward pattern in February, though have thus far failed to match the earlier surge to $30. This was seen as an artificial bounce however, technically speaking. Any renewed progress surrounding the passage of a US stimulus package will help insulate silver prices as well. As long as prices do not breach the $26.00 level, a clear path higher remains intact. Look for silver prices to grind higher with plenty of chances for entry as the white metal remains one of the most volatile and fickle.  Many investors recall previous surges of prices only to see a quick turnaround and collapse. This rise could be different, kicked off by a total buyout of the physical market which leaves the space in unprecedented territory. This article was submitted by CMS Prime.

TRUSTED GURUS | EDUCATION FROM BROKERS Mon 22 Feb

VantageFX offering triple award bonus for referrals

You can earn up to a total of $2,250 cash for referring your friends to Vantage FX! Earning referral bonus has never been more rewarding, with VantageFX now offering the greatest referral rewards to date. Existing clients have until 28 February 2021 to claim the VantageFX Refer-A-Friend Bonus! Retail trading has hit new heights in 2021, with more users than ever before interested in trading markets. This includes VantageFX, which offers a wide range of Margin Forex (FX) and Contracts-for-Difference (CFDs) on indices, energy, shares, and other assets. How to Qualify for your Cash Bonus Today The offer is only eligible for Australian clients and grants Vantage FX clients $450 cash for each successful referral (up to a maximum of five). In order to collect the bonus, referred users must also deposit a minimum of A$1,000 and complete their one qualifying lot of trade. Each successful referral will also receive an increased reward of A$300 cash. Prospective users can access the following link and get started in opening an account with VantageFX today. Users can also send their unique referral link from their respective client portal. This is also where you can check the progress and completion of your referrals. Why Trade with VantageFX VantageFX offers an advanced trading experience for all clients. In addition to a robust basket of tradable assets, the brokerage supports trading on the versatile MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms. This allows for trading of over 300 derivative instruments on Mac, iOS, Android, and PC. VantageFX is also known for its low spreads on tradable instruments as well as supported leverage up to 500:1. Don't miss a beat with the markets in overdrive this winter. Whether you are interested in trading forex majors, single share CFDs, or indices, VantageFX has something for you. About VantageFX VantageFX is a registered trading name of Vantage Global Prime Pty Ltd which holds an AFS licence no. 428901 issued by ASIC. VantageFX provides traders with access to 300+ derivative products via MetaTrader 4, MetaTrader 5 and its proprietary mobile application (App). Risk Warning: Trading derivatives carries the risk of losing substantially more than your investment and may not be suitable for all investors. Please consider VantageFX's legal documents (available on the legal documents page on www.vantagefx.com.au) and seek independent advice to ensure that you fully understand the risks involved before making any trading decisions.

TECHNICAL ANALYSIS | EDUCATION FROM BROKERS Fri 19 Feb

Gold: Crossing November lows?

A look at gold as it revisits the November lows Gold has been going down since August. From the high of 2,070, it eventually dropped to 1,765 in November. After, it rose to 1,955 - the second time since autumn - which created a suspicion that a bullish trend change may happen. Never happened. Just in several days, gold plunged to 1,845 and crossed the support of 1,800 - that's what we've been observing recently. Strategically, the support of 1,765 is an important indicator of the bearish power behind the current downtrend. If it gets crossed, we'll have a solid confirmation that the market doesn't find any serious reason to keep gold above 1,800. In this case, if 1,765 gets crossed, 1,700 may result to be a very possible target for bears in the coming weeks. In the short-term, we are still waiting to confirm whether the large downtrend will continue or not. So far, 1,765 is still the secondary support; the primary is 1,775. Now, if the price bounces downwards from the local resistance of 1,800 where it's aiming now, that may be the start of the downswing that would drag gold to cross the November lows of 1,865. Otherwise, if 1,800 gets crossed to the upside, there will be a higher likelihood to see a bullish takeover of the large panorama. This post is written and submitted by FBS Markets for informational purposes only. In no way shall it be interpreted or construed to create any warranties of any kind, including an offer to buy or sell any currencies or other instruments.  The views and ideas shared in this article are deemed reliable and based on the most up-to-date and trustworthy sources. However, the company does not take any responsibility for accuracy and completeness of the information, and the views expressed in the article may be subject to change without prior notice. Invest in yourself. See our forex education hub.

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BASICS | EDUCATION FROM BROKERS Thu 18 Feb

Trading schedule and national public holidays

Knowing how markets are impacted by holidays is important National public holidays can hit even the most unexpected trader's plan. As exchanges and banks closed completely or operate on lesser hours, it is important not to be caught off guard by surprise festivities when traders plan their trading schedule and strategy.  Looking at three of the most crucial stock exchanges as an example already shows the extent of the problem; in 2019, the Tokyo Stock Exchange will observe twenty holidays throughout the year, London ten, and New York nine. With that, what is the impact of this for traders' trading schedule, and how can they plan for disruption in the markets? The Effect First of all, the instruments used in trading will identify the kind of action to take. For stocks, this is straightforward. When the exchanges are shut, traders can't enter a trade. But several exchanges also close early on days surrounding the most culturally significant holidays. For instance, on Christmas Eve and New Year's Eve - neither are part of the U.K.'s eight official bank holidays -, the London Stock Exchange closes the shop early at 12:30 at local time. Be cautious not to be caught by less apparent adjustments to the schedule similar to this. Then, this will get more complicated if traders consider the implications decreased activity has for forex, CFDs, and spot metals. Traders must keep a close watch on the economic calendars given by their brokers and focus on bulletins about schedule changes for different asset classes. The question is, what would be its effect on currency trading? The over-the-counter (OTC) nature of the forex market indicates that trading stays open 24 hours a day. But major public holidays might affect the overall liquidity of the market. In case U.S. or U.K. banks closed due to a holiday, this will probably lead to a significant decrease in trading volume in the market. In practice, this will most likely end up in a more volatile and unpredictable market or a static market with lesser trading opportunities. Also, the reduction in active traders may cause spreads to boost. This type of short-lived volatility in the markets is unlikely to disturb traders with long-term positions open. But, for traders who seek to capitalize on short-term movements, they might find that a constricted trading volume makes the markets more difficult to read. Pre-Holiday Impact and Buoyed Market Sentiment Meanwhile, this is not all bad news. As activity on the actual holidays might be more challenging or even impossible, a broad, recognized phenomenon named 'the pre-holiday impact' could make trading directly before a public holiday more appealing. In addition to that, the pre-holiday effect describes the influence of a national celebration on the market mood. Linked primarily with stock trading, the trend looks like it is affecting traders with a widespread sense of optimism that spikes on the day preceding a public holiday. Historically, this has ended up in greater average returns than a typical trading day. But still, investors need to remember that there is no sound economic basis to this supposed uplift. And when it happens at all, it is all a result of trader psychology and must never be treated as an inevitability. Investors should treat these kinds of fickle behavioral tendencies towards taking positive positions with caution. At the same time, an awareness of this impact might be useful in assessing possible market sentiment. Above all, an essential thing to note about trading on or around public holidays is always prepared. Traders should ensure they are aware of any possible changes to trading hours and stay sensitive to any anomalies changes of events might throw in the way. Invest in yourself. See our forex education hub.

BASICS | EDUCATION FROM BROKERS Thu 18 Feb

Different types and roles of brokers in the trading industry

Getting to know brokers in the industry Brokers are professionals who serve as middlemen in planning and organizing negotiations between a securities exchange and an investor. Other terms for brokers are intermediaries and negotiators. They facilitate bargains such as stock trade, bond trade, foreign exchange, real estate, insurance, personal assets, commodities, or properties. They can be independent agents or else employed with brokerage companies. Securities exchange practices exclusivity because they don't accept orders from people or individuals who are not their members. This reason leaves traders and investors who are non-members the need for a broker to be their middleman. Brokers will usually ask for compensation before every order, and their mode of payment can be in the form of commission, fee, cash, and the like. The full-service broker Full-service brokers can perform multiple services like retirement plans, insurance plans, market research, and investment plans. They are professionals who can manage your finances and give you advice in their specialization. Since they can offer more than one service, they usually charge or expect a higher commission. The more they bring in trades and the bigger their sales in their products, the higher their compensation is if they are under any brokerage firms. The discount broker If you feel like you can manage your portfolio and are just looking for someone to execute a trade, a discount broker is the best person for you. Discount brokers charge lower than full-service brokers because they only perform the execution - they are compensated with salary and not commission. With this said, you can cut more expenses if one discount broker executes for trades for you. Recently, discount traders come with online trading platforms that help them entice more investors. Let's classify brokers There are multiple types of brokers, but these specified ones are the most common. Even though their roles are all negotiating between two entities, they are very different from each other. While some who have licenses can give you advice and execute a sale, others can only complete the deal for you. The stockbroker A stockbroker's role is to buy and sell stocks in the stock market since individuals can't do this directly. They are also known as investment brokers. The forex broker If you want to invest in a foreign exchange where you can buy and sell currencies, a forex broker has 24-hour access to the currency pair market across the globe. These transactions are always in currency pairs. Real Estate Brokers Real estate brokers are licensed professionals who can either represent a property seller or a buyer in the real estate industry. A real estate broker's responsibility for representing sellers is market value determination, listing and advertising, ocular for potential buyers, advising, and offer submittals to the owner if he can consider it.  Being a middleman, a real estate broker can also represent the buyer. For example, Mr. A is a real estate buyer, and he hired Mr. B to represent him. Mr. B will now look for a property in Mr. A's desired area. When he manages to find the perfect property, he will prepare an initial offer and purchase agreement on behalf of Mr. A and try to negotiate with the seller. He will also inspect the property and bargain for repairs. Finally, he will help Mr. A close and takeover. Invest in yourself. See our forex education hub.

FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Tue 16 Feb

What lies ahead for Tesla?

Here's what we learned about Tesla's $1.5 billion Bitcoin investment As traders, it's important for you to be able to read a story properly. It is essential that you have an understanding of how the market works. It's an ability to do things that have a specific purpose. Being able to develop flexible strategies and act quickly. Bottom line Just days ago, the global automotive leader, Tesla had announced that it had invested $1.5 billion in bitcoin.  But what was startling was the fact that the electric car giant plans to begin accepting Bitcoin as a payment method for its products.  PayPal has also announced its plans to add cryptocurrency as a payment option through Venmo, while Mastercard announced its plans to provide merchants with the ability to receive payments in cryptocurrencies later this year. What was the impact of those disclosures? These plans actually sent the price of the popular cryptocurrency to a new peak, exceeding $43,000! These news became the most widespread topic in the financial world, while economic analysts and experts in the field attempted to provide their own answers and thoughts on the matter. It is essentially an act that has achieved a certain result. The big firms have that dynamic. They may influence a broader area by any of their actions. In the long run, it might be better to see where this act is headed and what the real plan is. Are they setting the stage for something that might take place? What is its purpose? Tesla had said that buying Bitcoin was done as part of an updated investment policy designed to provide greater flexibility and maximize its cash yields. While the bombing of support messages on social media by Elon Musk, CEO of Tesla, for digital currencies sent the dogecoin price up by about 60%. Here is something that should be noted. What do you think happened when Musk put the hashtag #bitcoin on his Twitter profile in late January? The price of the digital currency rose by over 15% in 15 minutes! It's a fact. - Bitcoin started the year with a massive rally, peaking at an all-time high at over $40,000 in early January. There was a decline of $30,534 at the end of January, following stronger regulatory review reports and bearish calls from analysts, while in the past month, the price of bitcoin has been steadily climbing. Something to consider. Here is an important factor for all of us to know. Volatility is a vital element for traders! If you don't have volatility, you don't have risk and opportunity. Risk and opportunity are both sides of the coin. Μore willing buyers and more willing sellers at any price of an asset can create zero volatility. What do you see in Tesla's movement and how will you execute in markets? This article was written and submitted by IGM FX. Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance. Invest in yourself. See our forex education hub.

MARKET WISDOM | EDUCATION FROM BROKERS Mon 15 Feb

The Great Google

Without question, you yourself, your company, friends and colleagues use Google. The real dilemma is, is Google too big for our own good? The powerhouse tech company has dominated the industry with services and products from cloud computing, email and business workflow software, search engine, mobile, tablet, laptops and more. Founded in 1998, Google rode the wave of the technology revolution leaving a path for other prominent companies to follow. Their IPO took place six short years later in 2004 at a price of $85usd per share. According to Market Watch analysts, this multinational tech firm is now valued at over 1.2 trillion USD. On December 14, 2020 Google experienced a mass worldwide blackout for about an hour where all systems were down including Gmail, Google Classroom, and Google Docs and its related services. Google Drive, Google Dot and home software, and YouTube in some cases. Some schools in the US closed for the day because of the dependence of online learning throughout these times, thousands of companies were left sitting there waiting for the return as the majority of companies throughout the world depend on Google services. It was reported that families with Google's home integration software were even left in the dark (quite literally) without proper heating. When looking at the bigger picture, the price movement of Google, although volatile in some cases, has stayed relatively consistent in an upward trend. GOOGL, also known as Alphabet Inc. in the markets, reached all-time highs of price per share this month, in February 2021. Analysts from Yahoo finance consider the stock currently undervalued and a "strong buy" from Recommendation Ratings. More specifically that asset has grown and soared, increasing 39% over the past 12 months. How would you trade GOOGL? How much is Google entwined in our everyday lives that a simple outage leaves the world hanging by a thread? Google hosts hacking events annually to combat possible issues that would arise by building a defense for their software and cloud computing. On the contrary, the US recently discovered a major flaw in governmental systems where countless pieces of information was hacked by a foreign nation through a door from SolarWinds Software. It is believed, but unconfirmed, that the outage from Google was a response to continue to build the wall of defense for their own firm. Has Google become a bottleneck for global productivity because of such high levels of dependency? Litigation war has begun in a bi-partisan effort as Google is facing the US Supreme Court, against the Department of Justice and Federal Trade Commission, for issues ranging from antitrust lawsuits, stifling competitors, and questions of the tech powerhouse dominating the environment and being harmful to consumers. According to reports, Google holds a market share of more than 50% and has already been fined billions by the EU for antitrust violations. In the free market, usually, consumers win when there is more competition; few, if not any are able to hang with the big dog of Google. Furthermore, similar to Facebook, there are increasing concerns that our digital profile is captured and sold for ad revenue. In recent news, it seems that Google is complying and altering their privacy policies to ensure the privacy and safety of users. The Great Google outage can be seen as a stark reminder of our hyperconnectivity, and if this breaks there could be major consequences. So again, I ask; is Google too big for our own good? This article was written and submitted by eXcentral. Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance. Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.15% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


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