#Jenco Protocol
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Commodities Trading Strategies Are Essential In The Financial Markets
Image Credits: Pixabay Commodities are the main essentials in daily life. According to Investopedia, the term “commodity” refers to “…a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.” For traders, however, commodities trading comes into the forefront, especially when other financial markets become volatile. Because the prices of commodities tend to move in the opposite direction compared to the prices of stocks, some investors find it best to diversify their portfolios by including commodity investments and other traditional securities. Nevertheless, commodities are also considered risky investments, mainly because traders need to observe a plethora of considerations, including unprecedented disruptions like epidemics, weather patterns, and disasters. Hence, traders capitalize on the ever-constant fluctuations in supply and demand of their chosen commodity investments. Commodities trading during COVID-19 The advent of the 2019 coronavirus (COVID-19) brought about a massive impact on the financial market. Establishments, all over the world, were forced to decrease import-export necessities, shorten daily business hours, and even make do with limited workforce. To mitigate rapid COVID-19 transmission, most governments were forced to initiate various lockdowns and enact different protocols. In the United States alone, a research study done by PNAS (Proceedings of the National Academy of Sciences of the United States of America) posits that 41.3% of establishments had to halt business due to the pandemic temporarily. Consequently, these protective measures resulted in massive unemployment as well as diminished food security. These protective measures, then, caused heightened volatility in the financial market with both forex and cryptocurrency exchange witnessing an apparent dip, especially earlier this year. Nonetheless, other businesses boomed during the onset of the said pandemic. Major providers of various products like face masks, personal protective equipment (PPE), disinfectants, multivitamins, and tissue paper witnessed an abnormal upsurge in sales as people started panic-buying and stock-piling. Commodities trading strategies There are a variety of strategies utilized in commodities trading. Depending on timing, level of expertise, and investment capacity, these strategies are deemed useful and sustainable in commodities trading. Seasonality Considered to be the most basic strategy in commodities trading, seasonality refers to the time when certain commodities are in demand or not. Traders, even new ones, capitalize on the seasons to either purchase or sell a commodity. For instance, heating oil is in high demand during the winter and is not necessary during the summer. Thus, the selling price of heating oil soars during the cold months and plummets during the warm months. Hence, traders can maximize this trend by saving up on heating oil stocks during the summer and selling them during the winter. Nonetheless, this simple pattern can also be affected by unexpected issues. Grains, for example, can be severely affected by certain weather conditions. A sudden onslaught of drought can obliterate grains’ fields, thereby affecting the predicted supply-and-demand in the market. Focus To make commodities trading even more successful, traders are encouraged to focus on a limited number of commodity investments. Cited as one of the most potent strategies, focusing on a specific segment product necessitates increased patience. In-depth analysis and research of the commodity must be done. Also included must be its historical trends in the market. Fundamental assessment Fundamental assessment refers to a general analysis of a particular commodity. An essential aspect of this strategy is supply-and-demand. Traders require research on the origin of the product and its client base to predict the commodity stocks needed and the upper- and lower- limits of its price. Scalping A day trading strategy, scalping, refers to gaining minuscule profits from temporary fluctuations in commodity prices. Attributed to the quantity-over-quality ratio, traders focus on making small profits by increasing fruitful exchanges based on volatile price hikes and dips. Arbitrage Trading To fully maximize the volatility in the market and the law of supply-and-demand, traders can also utilize arbitrage trading. “Arbitrage is a form of trading that takes advantage of price discrepancies of the same cryptocurrency from different exchanges. It is an investment strategy that guarantees a positive payoff in some contingency with no possibility of a negative payoff and no net investment. These discrepancies occur when multiple exchanges are differently pricing a coin,” explains Tony Jackson, CEO of Jubilee Group’s JENCO, a decentralized finance platform. “Traders can use an automated trading system as part of an arbitrage trading. Automated trading systems rely on algorithms to spot price differentials on different exchanges. It allows traders to jump on the arbitrage opportunity before it becomes common knowledge, and the market adjusts the inefficiencies,” concludes Jackson. Conclusion To fully utilize market volatility and minimize the impact of the current COVID-19 pandemic, traders are encouraged to maximize the different strategies proven to be useful in commodities trading. Because commodities trading heavily relies on the law of supply-and-demand, it is essential to look into the current needs of the consumers and focus on the commodities that are highly in demand during this pandemic. This significant disruption is predicted to have a long-lasting impact on the financial market as well as daily life.
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DeFi and its opportunities
The traditional financial system uses monetary transactions through financial institutions such as banks. On the other hand, decentralized finance enables digital transactions that are not run by any centralized channels and distinct currency values.
“Decentralized finance (DeFi) does not use a centralized authority to maintain currency values across nations. Due to the inequalities observed across the different financial systems worldwide, the necessity of enabling convenient cross-country or cross-currency exchanges was developed,” states in an analysis report by Jenco, a FinTech company that offers decentralized trading and lending services.
The use of DeFi through FinTech will allow global accessibility of various financial services, lower transaction costs, and secure exchanges.
“Utilizing DeFi is more beneficial since users do not have to follow centralized rules. Direct, peer-to-peer exchanges can occur, given that various values are agreed upon irrespective of the current offline values. Dealers or third-party mediators can also be utilized. However, transactional prices are significantly lower than when using traditional and offline institutions,” according to the same report by Jenco.
Through DeFi, most of the population can now have access to financial products that are once only available in centralized institutions. Those who live in far-flung places can also participate in the financial system by only using the internet and smartphone. DeFi has been made possible by FinTech innovations.
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JENCO Bots
Jenco Tech believes it is in the investors favour to lend out their digital assets than utilising decentralised finance networks. As a result, JENCO Bot was created as a fully automated lending system, cushions investors against crypto volatility. The bot monitors the digital money market for optimal returns on an investment. As a user, you are required to have an account with JENCO Bot then linked via API to the supported exchanges to automate the lending process. (Bitfinex & Poloniex)
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Here are investment options you can try to weather the current economic climate
The global pandemic caused by COVID-19 has significantly affected economies and businesses all over the world. Having no near precedent, the world was thrown into a frenzy in trying to contain infections. Businesses not considered essential, and companies with factories abroad had to close shop until their governments stabilized. Non-employment reached its highest rate as more people lost their jobs. In America alone, almost 43 million claimed their unemployment benefits with the projection that millions more were going to have to do the same in the next few months.
With such uncertainty and left without work, people sought out other means of making money. Online jobs seemed like a good option, but these jobs required a specific set of skills that not all had. Fortunately, an opportunity presented itself in the form of investments.
Many people worry that investments are not as secure or that having zero to little knowledge leaves them at the mercy of more seasoned investors. This is far from the truth. In fact, investing can be easily learned and accomplished. Investing in different areas is not even a competition.
Traditional investments and alternative investments
There are many ways to invest, and there are many platforms available depending on the type of investment a person feels more secure with. To simplify, investments can be classified into two categories: traditional and alternative.
Traditional investments are stocks, bonds, and cash. These are known to be more secure because assets are more well-known, and the liquidity is high. On the other hand, alternative investments are all those not falling in with those mentioned earlier three. Alternative investments are investments in commodities, real estate, hedge funds, and private equity. These may have lower liquidity, but they have less regulation. With less regulation, this means investors have more freedom to move and make decisions.
Alternative investment options
Despite the volatility of the markets and economies, investing is very much a good option. Some investing instruments need to be studied intensively and mastered while others do not.
One of the best options would be investing in digital assets. Digital assets are more flexible, as investing in them does not require extensive knowledge or vast experience. These investments can be easily managed on the world wide web and be quite profitable with the right tools. A little learning is required to understand how to use the tools without throwing caution to the wind.
The benefits of investing in digital assets are numerous. According to Capital Markets CIO Outlook, the three benefits are the following: enhanced financial returns, a perennial stream of income, and a better hold on investments. It adds that “Digital assets are certainly a better alternative than the traditional means of investments and are already influencing the current set of investors.”
With technological advancements, a new breed of investors is born. These investors are savvy enough to know which tools online can help them achieve their financial goals. The use of tools online is made more accessible with the introduction of automation, which works hand in hand with arbitrage trading.
Arbitrage trading and decentralized finance
Arbitrage trading is an investment strategy that has been in existence for decades but has now come to the fore. Arbitrage is a strategy that takes advantage of discrepancies in market prices and profiting from the difference.
Investors who engage in arbitrage trading know about the high profits and low risks involved. Now, this trading method has become even more competitive with the introduction of automation.
It is a challenge to manually conduct arbitrage trading as the profits come from finding price discrepancies in the different markets. This trading method requires speed and manually finding the data, and trading is done faster by a program and a computer.
“This is where automation of arbitrage trading comes in. A great platform is one that offers automation that is programmed to extract data from the world wide web of information, analyze which markets are more profitable and have lower risk, and most likely close the deal itself,” says Tony Jackson, Chief Executive Officer of Jenco, a decentralized financial service platform.
Traders use different software programs to achieve successful trades. One type of program is automated trading software. “This type of program is designed to overcome one of the primary challenges of arbitrage trading: the timely and accurate trade execution necessary to take advantage of trading opportunities that may only exist for a few brief seconds,” according to J.B Maverick in an article in Investopedia.
Decentralized finance can also be utilized as it has a lot of potential like arbitrage trading. According to a study by Jenco, “DeFi uses electronic devices to interact and display bidding or asking prices in real-time. Hence, traders do not necessitate being in the same location to initiate transactions. Everything is done virtually, and digital markets are made secure by blockchain technology.”
From the same report, the utilization of DeFi’s blockchain technology allows global accessibility of various financial services, low transaction prices, and secure exchanges. Utilizing DeFi is more beneficial since users do not have to follow centralized rules. Direct, peer-to-peer exchanges can occur, given that various values are agreed upon irrespective of the current offline values.”
Conclusion
A smart investor knows to strike while the iron is hot, and there is no better time than now. When employed with the right strategy, anyone can increase their profitability, and stay on top of their investments during trying times. Innovations in being able to invest through a purely digital platform with low barriers to entry may just be the prime solution for new and seasoned investors to explore.
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Why Decentralized Finance - Jenco Tech
Decentralized Finance (DeFi) is one of the hottest applications of cryptocurrency and blockchain technologies––taking traditional financial concepts like securities, bonds, money markets, and more, and putting them on the blockchain puts significantly more power in the hands of those who participate in these markets, not just the middlemen who manage them.
Without a doubt, though DeFi is a very nascent field, there’s an incredible amount of rising interest in trading on the blockchain and extending the financial capabilities of cryptocurrency.
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JENCO Promotes Financial Decentralization through the JENCO Protocol
Jubilee Energy and Commodities or JENCO is now going full blast with its digital investing and trading venture that promotes decentralized finance (DeFi). After officially introducing its new platform last month, the company is offering new profit opportunities especially for those who prefer alternative currencies.
Tony Jackson, the CEO of JENCO, says their business is not about supplanting the current financial ecosystem, though. The company aims to bridge the traditional financial markets with digital finance by providing an efficient system that harnesses the power of smart contracts and token solutions.
Jackson acknowledges the challenges of offering something novel to traders and investors. The idea of financial decentralization coupled with blockchain technology is yet widely accepted. Many know about digital currencies, but they have limited comprehension of how it works. That’s why JENCO is offering a simplified platform that allows anyone to rake in profits without the need to thoroughly understand digital currencies, non-mainstream finance, and blockchain.
The company offers the JENCO Protocol, a straightforward but versatile trading platform, to anyone interested in making money with digital currencies and nontraditional but high-quality investments. The platform is built to resolve many of the issues attributed to traditional investment. It provides access to high-yield assets, minimizes the difficulties encountered in hedging and risk management, and supports wealth building. Additionally, it guarantees secure transactions. JENCO Protocol enables DeFi to provide access to more investment options.
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