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What Is CFD Trading & How to Use It

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StrategyDriven Entrepreneurship Article |CFD Trading|What Is CFD Trading & How to Use ItAlthough CFDs (Contracts for Difference) made their first appearance on the financial market less than 30 years ago, they are now an integral part of the Forex market. CFD trading online remains a realm of vagueness for many traders and even brokers, but one can’t deny that the number of benefits offered by CFDs is 3 times larger than the number of risks. Of course, the risks are high, as it’s a foreign exchange trading instrument, but proper application is called to solve the problem for a trader who knows how to control their emotions. Let’s get introduced to CFDs!

What It Really Is

Contract for Difference (CFD) is an agreement between 2 parties to pay the difference between the opening and the closing price of an asset. The benefiting party is always the one that predicts the trend correctly. Using a CFD, parties can participate without owning any assets at all. Both profit and loss appear when the price of an underlying asset mentioned in a contract goes above or beyond the opening price. CFDs let you speculate on the price movement without the need to invest in ownership but oblige you to pay the difference if your prediction appears to be wrong. The bright side is that your earnings can be impressive. CFDs are usually traded throughout the day, and it’s normal to run multiple trades daily.

Here is a quick example for you to better understand the trick. Imagine that you choose a $50 stock and open a CFD position worth 10 shares. On a stock market, this would cost you $500 plus fees. When you “purchase” a CFD, you pay only a 5% margin (although this may vary), so opening a CFD for the same asset will cost you around $25. That’s 20 times less! The payment for such a level of comfort is the risk, and your reward must always cover the spread cost of your broker.

Let’s also compare this instrument to a classic stock. Imagine that the price of the stock you selected grows and reaches $55. If you owned it, your asset worth could be $550. That’s a good profit if we ignore the commission. But what happens to the CFD opened for the same asset? It generates the same profit, while the initial investment is 20 times lower. The cost-reward ratio is bigger as well as the cost-loss ratio.

Benefits of CFDs

Here is the full list of benefits offered by this arrangement:

  • Low entrance costs – trading CFDs requires minimal investments. Most brokers charge very low or even zero commissions by earning on the spread instead. Its size depends on the underlying asset volatility.
  • Lower day trading costs – most markets require larger initial capitals and don’t let you trade multiple positions per day until you grow big enough. CFDs don’t require asset ownership, so opening multiple positions with as little as, say, $1,000 is not a problem.
  • Diverse vehicle selection – are you interested in treasury, commodities, cryptocurrencies, indexes, Forex? There’s a CFD opportunity for a large variety of asset types.
  • Leveraged trading – CFDs let you apply higher leverage than any traditional instrument but keep the average margin at around 2%. Due to this, you can enter significantly larger positions and generate a larger income from day-trading. Don’t forget about the multiplied losses, though.
  • Accessibility – reliable CFD brokers let you enter all the major markets and work 24 hours a day if the broker trading hours are flexible enough.
  • Weaker shorting rules – generally, CFDs don’t involve higher margin requirements. You are not required to own any assets, so there’s no need for shorting rules either. This results in zero shorting costs!

Risks to Manage

Although the benefits are so great, they go hand in hand with considerable risks that you should never forget about. Here they are:

  • Legislation – the legal regulations on the CFD market aren’t as well-established as in traditional markets. Finding a trustworthy broker is much more difficult, so it’s highly important to assess the financial position and credibility of many brokers before starting out.
  • Margin trading – margin trading lets you increase the earnings but also draws your eyes from the total exposure. Instant losses can exceed your deposits multiple times, so stay aware.

Is It Worth It?

Like any other financial instrument, CFD isn’t for everyone. It can be risky, but it’s also manageable if you master your emotions. Do that to keep your grip cold and strong, and enjoy the benefits.

Why Hire a Financial Modelling Consultant

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StrategyDriven Managing Your Finances Article |Financial Modelling|Why Hire a Financial Modelling ConsultantWhen you’re starting a business, it’s a default action to try and do all the heavy lifting to get your ideas off the ground. Many entrepreneurs are often guilty of overburdening themselves with tasks they can hardly accomplish.

Aside from the stress and distraction that shifts your focus away from things that truly matter, there are some areas that, given your lack of expertise, could damage your business rather than benefit it.

A case in point is financial modelling. Financial models are a set of assumptions regarding the future financial conditions of a business, including its earnings, revenue, and cash flow, allowing them to reduce the risks and make better, informed decisions.

Hiring a financial modelling consultant provides you with access to their expertise, filling gaps in your own skill sets. In this article, we are discussing the reasons to bring in outside help.

The 5 Benefits of Hiring a Financial Modelling Consultant

Financial modelling consultants are hired to assist businesses with their budgeting, forecasting, capital raising, and other crucial business decisions such as mergers and acquisitions. Smaller businesses, particularly start-ups, usually outsource this service instead of hiring an in-house consultant. Regardless of the way you hire this professional, you can get access to their following skills:

Expertise

You may have a profitable business idea and the resources to get it started, but you may struggle to conduct market research and translate data to a comprehensive financial model and a succinct marketable plan. An expert consultant fills these functional gaps, helping you construct a model that provides immediate answers to things that may take a while to actually take place. This allows you to plan accordingly and make certain decisions.

Constant Monitoring

As you launch your business, your financial modelling consultant will also monitor the performance of your business—compare the actuals to the budget. This is a crucial factor that will allow you to make adjustments to realign your plans and ensure that you will complete a particular task or achieve a milestone at the end of the day.

Domain Experience

When venturing into new markets or launching a new product/service offering, you can benefit from seeking advice from a consultant who has experience in that particular domain. They can use their past consulting experience and familiarity to get the project done more efficiently by saving you from the need to conduct years of industry research.

Different Perspective

Because they are not engaged in your day-to-day operations, financial modelling consultants can analyse your situation with greater objectivity. It also makes them more apt to identify possible issues and opportunities. They’re also more likely to be updated with the latest solutions, thus are more versed in using them.

Time

Perhaps the greatest value of hiring a consultant is the fact that they are sharing a part of your burden. They will handle strategic responsibilities while you remain focused on the day-to-day operations that drive ongoing revenue and sustain your business operations. From an economic point of view, outsourcing this service is often more cost-effective than allocating resources to hire additional in-house staff to fulfil the need.

Aside from these direct benefits, hiring a consultant can provide other advantages. Because of their existing relationships with their clients, you can connect to an entirely new network of potential customers, investors, suppliers, and more.
If you have any more benefits to add to the list, let us know by leaving a comment below.

Will Passwords Soon Be A Thing Of The Past?

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StrategyDriven Risk Management Article |Passwords|Will Passwords Soon Be A Thing Of The Past?Is it only a matter of time until we see the death of passwords as a security measure? In fact, many believe passwords offer very little security at all. A mere word, with a few unique characters or numbers, is supposed to protect all of your personal details and payment information. Is this really enough?

The landscape of digital security is changing all of the time. Hackers are becoming more and more sophisticated with every day that passes, which means that we simply cannot afford to remain stagnant. We need to make a conscious effort to patch all possible security vulnerabilities, and many believe that passwords are a major problem!

To ensure that your business is up to date with all of the latest security efforts, you need to team up with an experienced IT company, such as Haycor IT support. Businesses like this can help to make sure that you’re using the latest methods and approaches, giving your business the best possible protection. Plus, all businesses are different, and this is why a bespoke approach is a must. Security is not a one-off thing; it is something that needs to be addressed all of the time and the security approach must be layered, meaning a range of different tactics are used to ensure the highest possible level of protection.

With that being said, let’s take a look at the use of passwords in further detail so that we can understand the concerns and what steps may be taken to move forward in this area.

Choose your password

Nowadays, it’s constantly drummed into us that we need to protect ourselves online and choose our passwords wisely. Most companies offer a feature telling you how weak or strong your password is as you compose it. Yet, did you know that 8.5 per cent of people use either the word ‘password’ or ‘123456’ as their password? In fact, 40 per cent of people have a password that features in the list of the Top 100 Passwords, with ‘iloveyou’ and ‘abc123’ being some of the most popular.

So, whilst the tech-savvy user may construct their password using a random sequence of numbers, unique characters and letters, it appears that most people are doing very little to make their password not guessable. Even so, with intelligent hackers ready to pounce, even those with complex passwords can suffer.

What’s the alternative?

It seems digital profiles may be the way forward. We have long toyed with the idea of using biometrics, such as a fingerprint reader or some method of voice identification. The problem with this is that such technology is buggy and expensive. Because of this, no one uses them, and consequently, they are never improved nor do they become cheaper. So, it’s unlikely that this will be the immediate solution – although we shouldn’t rule out biometrics being used in the future.

Instead, online identity verification will likely be a natural transition. This may well include the use of passwords, but passwords will only make up a very small portion of the identification system. The multifaceted process will be based on everything from where we go, to when we go there, to who we are, to what we do, to what we have with us and how we act when we are there. We already see this on a small scale with the security measures that are in place to identify an unusual pattern in an individual’s shopping behaviour, such as excessive spending.

  • Protect yourself now
  • But for now…
  • Never use the same password twice
  • Use long passwords
  • Use all authentication methods offered
  • Don’t use a dictionary word
  • For password recoveries, use a secure and unique email address
  • Give bogus answers to security questions

So there you have it: an insight into some of the worries and concerns regarding passwords. When you consider this, it is not hard to understand why we may end up embracing different solutions, such as a digital profile. We have already seen the move to two-factor authentication so that people have to do more than input a password to gain access to a system. However, we should not expect this to be the final change when it comes to enhancing security. More still needs to be done. For now, though, make sure you’re using strong passwords and you are changing them on a regular basis too. Plus, consult with an IT expert to ensure that your business is protected.

Marketing Tips for Start-Ups

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StrategyDriven Starting Your Business Article |Marketing Tips|Marketing Tips for Start-UpsMarketing is one of the most important elements of a business. Without it, your company will be lost in a sea of other companies and no one will know about your services. For start-ups especially, putting together a high-quality marketing plan is essential. If you’re new to marketing and are keen to put this into action, check out the tips below.

Find Your Niche

Finding your niche is key when it comes to developing a strong marketing strategy. It’s all well and good to market your services, but if it’s not hitting your target audience then it could fall flat on its face. To tailor your campaign to your intended audience, speak to potential customers and find out about their lifestyles, interests, concerns, and needs. Successful campaigns depend on your ability to connect with your audience, so establishing your niche is one of the most important first steps.

Attend Events

Networking is another vital step in your marketing efforts. Expanding your contacts, opportunities, and potential customers will go a long way. While networking events can be daunting, finding ones that are relevant to your industry can be highly rewarding. Where possible, try to meet new people and grow your network of potential clients and customers. You could even co-sponsor an event within your niche to gain more publicity for your business.

Give Away Products

Products can be a powerful way of marketing your business. Whether it’s pens and notebooks or stickers and t-shirts, applying your brand across merchandise and distributing these at events can be one of the most effective ways to get your name out there. Great Creates promotional products, including clothing, technology, drinkware, and office stationary, allow you to showcase your brand.

Use Social Media

Social media is another powerful platform for marketing your business. Creating profiles on the likes of Facebook, Twitter, Instagram, and LinkedIn is essential if you want your business to be visible. However, to make this more effective, find out which platforms your target audience are using and create content that appeals to their interests.

Do Your SEO Keyword Research

Every business should do their keyword research to target customers. Again, this comes down to understanding your niche and audience. By knowing what these customers do, want, and need, you can then set about finding out what keywords they enter into Google. In other words, you’ll want to tailor your marketing efforts to accommodate the keywords that are used by your target demographic. This will ensure that your services are visible on the search engine results pages (SERPs) and that your potential customers can find you.

Host a Contest

Perhaps one of the lesser-known marketing tips is to host a contest. While contests can seem superficial, some of the most successful companies have achieved growth in this way (YouTube included). Contests are especially great for start-up businesses who are looking to grow quickly. Whether you’re giving away a prize or a service in exchange for sign-ups or purchases from your customers, contests can be a fun and easy growth hack.

5 Tips to Improve Sales Team Performance

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StrategyDriven Marketing and Sales Article |Team Performance|5 Tips to Improve Sales Team PerformanceDo you want to generate more sales? It’s a silly question to ask, admittedly – every business wants to send out more orders to customers. Yet actually making it a reality is a whole different story. If it were easy, you wouldn’t see so many companies fall by the wayside each year.

The good news is there are numerous ways in which you can boost the chances of selling more to consumers. This is particularly the case if your business operates with a sales team. Whether they are out in the field, within your office, or working from home remotely, there are ways to optimize their performance.

How? That’s where this guide will help. Below are five tips to improve how your sales team operates.

1. Accurate sales forecasting

Did you know that most organizations don’t feature a scalable, repeatable method for forecasting sales? If your business falls into the same situation, it’s time to change this process. The reason for this is simple: a lot of critical decisions – from investments to hiring employees – are down to sales forecasts.

As a result, sales forecasting accuracy – where you measure how close you come to hitting your forecast – is necessary. Generally, an accurate sales forecast can be essential in improving your sales team performance. For instance, it allows your business to spend adequate resources more effectively to facilitate a successful sales strategy. It also helps your sales department to attain specific business goals by determining issues with their sales and looking for ways to correct them. Lastly, having an accurate sales forecast can help you make sound business decisions in terms of budgeting, risk management, and planning.

With all these things being said, sales forecasting indeed plays an integral role in the success of your marketing and sales efforts. But if you’re a beginner, how can you create an accurate sales forecast? Well, One way of doing this is by working out the percent difference, also known as the percentage error. Simply put, this is the difference between forecast volume and the actual volume expressed in percentage form. You can learn more online about how to calculate forecast accuracy.

If you’re not good with math and the last thing you want to deal with is a percentage calculation, there is a quick solution available. GIGA Calculator offers a simple yet effective percent error solution for this issue.

2. Implement sales tools

In the sales world, there are plenty of repetitive, unproductive tasks that each employee has to handle. This is why it is recommended to automate as many of these tasks as possible with the implementation of sales tools. When tools like these are used, it helps to save a significant amount of time on redundant assignments like data entry. This means your sales team can then dedicate more time towards tasks that matter most.

To get an idea of what is available for automation, Intercom has put together a list of 45 sales tools worth your time.

Aside from innovative sales tools, there are also other things that can help make the sales team’s work much easier and faster. One of them is the so-called sales playbook. It refers to a document containing your business’s best sales tactics, strategies, and even templates which are based on your sales successes and failures. In other words, it’s a cohesive manual that can guide your company in obtaining an increase in sales over a certain period of time.

Like the other sales tools, a sales playbook can serve as an effective tool to ensure your sales team utilize the best sales strategies. It also helps get your team on the same page in terms of your marketing and sales efforts, thereby making them much easier and more efficient. With a sales playbook, you can ensure that the sales department will properly implement your proven sales tactics. So, if you want to include a sales playbook in your list of sales tools, then you should start creating one as early as now.

3. Establish a schedule

Yes, sales reps are not known for sticking to the most stringent schedules – particularly if they’re working in the field where travel also has to be factored into the equation. However, putting together some form of schedule for your sales team is highly recommended.

When you have structure, where sales reps also know how long each client session should last, it’s easier for them to organize their daily schedule. They will know how much time needs to be dedicated for each meeting, along with other points that may apply, such as travel and preparation.

4. Decide on daily goals

Accountability leads to results. It is a driving force that gives your sales team that extra push to, well, sell your products. To add accountability, one of the easiest methods is to set goals that serve as a form of motivation. They supply salespeople with a plan of action, a sense of direction so they can hit their set targets.

For instance, say an employee is set with the target of reaching $500 in sales for the day. To do this, they need to make five sales. On average, it takes 20 attempts for them to land a single sale. As a result, it is known they need to make approximately 100 attempts to reach their goal of $500.

With this type of information and motivation, they can plan out how to make their goals a reality.

5. Communication is key

Being in constant communication with your sales team is imperative. This point shouldn’t be overlooked. The more you stay in touch with your employees, the more you’ll be aware of their performance and any feedback they might have.

When communicating with your employees, you can start with a quick meeting each morning. Yet, it is also wise to schedule a daily one-on-one check-in with each salesperson. This doesn’t necessarily have to happen each day, of course, but it is a great way to gain insight from employees.

By going with an in-depth interaction like this, it is perfect for getting valuable feedback. You can learn about not just ways to improve your business, but also the morale of your employees and if any steps need to be taken to improve their mood.