Tag: Trading

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Freetrade buys UK arm of Australian investing platform Stake

Financial trading app

Freetrade acquires Stake’s UK customer base, increasing domestic presence amid intense competition with similar apps such as Robinhood

The British retail investment platform Freetrade is set to acquire the UK customer base of its Australian competitor Stake, highlighting the growing competition in the UK’s digital investment sector. The acquisition, initially reported by CNBC, entails Freetrade assuming responsibility for all of Stake’s UK clients and their assets.

Freetrade currently oversees more than £2 billion in assets for its UK customer base.

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Common investing mistakes to avoid

Wise stock selection

Avoiding common investing and trading pitfalls is crucial. Here are some typical investing errors you should try to avoid.

Warren Buffett wisely cautions against investing in businesses that are not well understood. It is crucial to have a deep understanding of the company, its market sector, the broader industry, and its financial stability before committing to an investment.

Understand your investment

Take time to research whether it be a company, fund, unit trust or savings account. Make sure you understand what you are doing. Not understanding the investment is a massive failing.

Love the company, but resist falling in love with it. An emotional attachment to a specific stock can obscure your judgement. Keep in mind that investing should be a process of making rational decisions based on data, not on personal emotions.

Patience

Successful investing demands patience. Don’t anticipate immediate results; give your investments the necessary time to mature. Resist the urge to frequently check the markets and make hasty uninformed decisions.

Investment turnover

Excessive trading, known as churning, can result in significant transaction fees and tax consequences. It is advisable to adopt a long-term investment strategy and minimize superfluous trades.

Attempting to time the market

Consistently timing the market is a difficult task. Instead, the emphasis should be on the duration of market involvement. Steady contributions and maintaining investments yield benefits in the long-term.

Getting even

Clinging to underperforming investments with the hope of just breaking even can be harmful. It’s crucial to assess each investment on its own merits and be prepared to take losses when needed. Run the winners!

Diversify

Investing all your funds in a single stock or asset class heightens the risk. Mitigate this by diversifying your investments across various asset types, industries, sectors and regions.

Cut emotions

Fear and greed often result in unwise decisions. It’s crucial to remain disciplined, adhere to your investment plan, and resist the urge to make hasty decisions driven by emotions.

You

Always maintain honesty with yourself when investing. Do not persuade yourself of anything other than the FACTS regarding your investment choices!

Keep in mind that investing is a journey where learning from mistakes is an integral part of the experience. By steering clear of these common pitfalls, you’ll set yourself up for greater long-term success.

Spread out your investments. Diversify. Aim for the long term. Remove emotion. Let the winners run. And doe your RESEARCH!

RESEARCH! RESEARCH! RESEARCH!

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Are AI investing trading bots taking over? It’s a little bit alien to me

Alien investing

AI ‘trading bots’ are software programs that use artificial intelligence (AI) to analyse market data, generate trading signals, and execute trades automatically.

‘I meant Artificial Intelligence Investing not ‘Alien’ Investing (AI)’

AI trading bots are becoming more popular among investors who want to take advantage of the speed, accuracy, and efficiency of AI technology. But is this a good thing for the future of investing?

Pros

AI ‘trading bots’ could transform the world of investing

  • Enabling more accessible and affordable trading for everyone, regardless of their experience, knowledge, or capital.
  • Enhancing the performance and profitability of trading strategies, by optimising entry and exit points, managing risk, and adapting to changing market conditions.
  • Providing more diverse and innovative trading opportunities, by exploring new markets, assets, and strategies that human traders may overlook or ignore.
  • Reducing the emotional and psychological biases that often affect human traders, such as fear, greed, overconfidence, and regret.

Cons

AI ‘trading bots’ also pose some challenges and risks

  • Increasing the complexity and volatility of the markets, by creating feedback loops, amplifying trends, and triggering flash crashes.
  • Exposing traders to technical glitches, security breaches, and malicious attacks, by relying on software and internet connectivity that may malfunction or be compromised.
  • Raising ethical and regulatory issues, by creating potential conflicts of interest, information asymmetry, and market manipulation.

Conclusion

AI ‘trading bots’ are not a mystical ‘get rich quick solution’ that can guarantee success in the world of investing. They are tools that require careful selection, evaluation, and supervision by human input and for the human trader to maintain ultimate control.

We should always be aware of the benefits and limitations of AI technology.

Alien investing
Are AI investing trading bots taking over? ‘I meant Artificial Intelligence Investing not ‘Alien’ Investing (AI)’
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Robinhood, the stock trading app to launch in UK

Robinhood app

Online investments app Robinhood said Thursday 30th November 2023 that it’s set to launch its platform in the U.K. in early 2024, marking the company’s third attempt at cracking international expansion.

Features on offer by the firm include the ability to choose from 6,000 U.S. stocks including Tesla, Amazon and Apple, and 24-hour trading five days a week. However, Robinhood will not offer U.K. stocks to begin with but will look to add them as it brings more products into the platform later. The U.K. version won’t include options and other derivatives at launch, either.

FCA warned of ‘gamification’

The FCA has previously warned about ‘gamification’ of investments, something the U.S. Securities and Exchange Commission is also worried about. Companies are obligated to respect consumer standards set out by the regulator.

Regulators are concerned brokerage apps like Robinhood and eToro, which engage retail investors with stimulating features like colourful graphics, push notifications, and a game-like interface, may encourage excessive trading that harms investors but is profitable for the market-makers.

Safeguards

Customer cash will be held in segregated accounts protected by U.S. Federal Deposit Insurance Commission insurance, Robinhood said, rather than the U.K. Financial Services Compensation Scheme. Robinhood users will be able to make a 5% annual yield on cash held in their accounts.

This will be the third attempt by Robinhood to launch in the UK.