ProCapital Trade Reviews On Procapitaltrade.com, Before Risking Your Money..See Findings!

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PCT Pro Capital Trade Review

ProCapital Trade is an offshore CFD Forex broker, operating since 2020. Since this broker has been in the industry for a few years now, it is understandable that you will encounter a fair amount of chatter about them online, predominantly in a negative manner, however. Their website is basic yet outdated, but simplistically set out for easy navigation. The fact that the website does not provide an FAQ page which immediately makes it incredibly difficult to obtain answers to the initial questions and queries one may have. Coupled together with the fact that they do not have a live chat feature makes you question whether or not you want to trade with a broker that is so vague and directly uncontactable.

Account Types

PCT offer 4 account types, namely: Standard, Classic, Premium and Gold. All account types are compatible on the trusted MT4 platform. The smallest account has a minimum deposit requirement of $250 (although some debates online state it is in fact $500), and the Gold account minimum deposit requirement is $50,000. This is quite some range which could be ideal for various types of traders, new or experienced. However, it is important to note that the lower the deposit requirement, the more restricted you are in terms of which instruments you can trade. You will only be granted access to ALL instruments if you opt for the larger account (Gold) meaning you are expected to deposit a minimum of $50,000.

Platforms

PCT have been smart when it comes to the trading platform by offering the leading trading platform MT4. All clients, no matter which account type you opt for, have access to MT4 desktop and mobile version.

Leverage

For the Standard, Classic and Premium, the account comparison table on the website states you may trade with 1:200 leverage while with the Gold account, the leverage is ‘adjustable’. This is rather confusing and suggests that for the first 3 accounts, you are not able to lower the 1:200 leverage, but with the Gold account you can, however, for this basic expectation from a broker, it is now somewhat considered a luxury, at the cost of depositing a minimum of $50,000.

Trade Sizes

Nowhere on the website does it state the minimum lot size one must trade with other than the mention of the minimum lot size applicable when trading with the bonus that can be granted. This information can be found in the Terms and Conditions section.

Trading Costs

It is unclear if this broker charges trade commissions as this is oddly not included in the account comparison table on the website. This can only suggest that this broker does NOT charge trade commission fees which is of course, a bonus for the trader.

Assets

As mentioned earlier, it is rather disappointing to know that if you trade with this broker, and opt for one of the 3 lower accounts, you are restricted to trading particular instruments. On the other hand, if you opt for the minimum deposit of $50,000 (Gold account), then you have access to trade ALL instruments. In summary, the Standard account allows you to trade only Base currencies (FX Majors), the Classic account allows you to trade Base currencies, Gold, Silver and Oil, the Premium account allows you to trade All currencies, Indices and Shares and finally, the Gold account gives you access to all instruments mentioned. It is unclear how many instruments in total are available to trade.

Spreads

ProCapital Trade offer both fixed and floating spreads, but depending on the account type you choose to trade with, you may be limited to one or the other. For example, with the lowest of the four accounts, Standard account, you are subject to trading only with fixed spreads, the typical FX spread being 2.4 pips. For the Classic account you may trade with a mixture of both fixed and variable spreads, btu this ofc course applies to particular pairs. The average spreads are also at 2.4 pips. Moving on to the Premium account, again, you have the pleasure of trading with fixed and floating spreads, average spread typically at 0.6 pips. Lastly, the Gold account allows you more freedom in regards to spreads as they are ‘adjustable’ so presumably one can choose to have fixed or floating irregardless of the pairs they are trading. The average floating spreads are priced at 0.6 pips also.

Minimum Deposit

We mentioned earlier that the minimum deposit requirements from the smallest to largest account do have a huge range and not only that, but the smaller the minimum deposit requirement, the larger the sacrifice when it comes to trading conditions. The standard account has a minimum deposit of $250, the Classic account requires $2,500, the Premium account requires $20,000 and the Gold account requires a minimum of $50,000. The range here is not commonly affordable among the every day trader, and it seems unjust to need to fill the requirement of depositing $50,000 just in order to be able to trade a variety of ALL instruments.

Deposit Methods & Costs

The deposit methods are not clearly stated anywhere on the website, and there is not an FAQ page for clients to refer to for this information or even guidance on how to go about funding their account. The same lack of information applies for any charges that may be incurred with any deposit methods. The only snippet of information to be seen is on the footer of the website where it appears that this broker supports payments from Maestro, MasterCard and Visa cards.

Withdrawal Methods & Costs

As with the lack of information when it comes to depositing with this broker, there is no information set out on the website in regards to which methods can be used for withdrawals, other than that you may use Maestro, MasterCard and Visa cards, but this is not concretely stated.

Withdrawal Processing & Wait Time

Since the website does not have basic information such as whether or not commissions are charged, or which deposit and withdrawal methods are available, it is no surprise that timescales are not stated anywhere, either. To the majority of serious traders, it is unacceptable to not present such basic information on the website FAQ page, which this broker does not even include in their website.

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Bonuses & Promotions

Although there is no specific tab on the website in regards to a deposit bonus, there is some information hidden within the text of the Terms and Conditions. When using a deposit bonus, it is important to understand that this bonus can not be withdrawn unless incredibly challenging trading profit requirements are met so ensure to read through the bonus policy in the Terms and Conditions before agreeing to use any bonus.

Educational & Trading Tools

This broker does not offer any educational tools or anything that would assist you in your every day trading such as an economical calendar. However this is not a real necessity since such tools, free or with subscriptions can be found online, should you wish to partake in such products or services.

Customer Service

Customer service is not ProCapital Trade’s forte; you may only get in contact during the hours of 10AM – 8PM Sunday- Friday (Bahrain Time GMT). In addition to this limitation, you are only able to contact this broker by email or telephone. The absence of a live chat service, or even having 24/7 customer support is very disappointing and demonstrates a lack of care for the clients.

Demo Account

If you have made it this far into the review, it may not come as a surprise to know this broker do not even allow you to test their trading conditions through a demo account before committing to a live account. This is clear evidence that this broker have one priority: for clients to register ASAP and deposit ASAP even if this means trading ‘blind’ with a lack of knowledge on the broker’s services in general.

Countries Accepted

The absence of an FAQ page made finding which countries are restricted or not from trading with this broker, very difficult. The only applicable information on this subject can be found in the Terms and Conditions section which still does not specifically state which countries are allowed and those that are restricted from trading with this broker.

Conclusion

This broker does not set out the majority of basic information that every serious trader should know before registering and depositing with a broker. The fact that the Terms and Conditions had to be a FAQ replacement for some questions, says a lot. An absence of a 24/7 and responsive customer support also demonstrates an element of suspicion one should note when considering trading with this broker.

Overall, the trading conditions (the ones that ARE visible on the website) are not totally competitive, or even clear, especially when it comes to spread and leverage options. It would be considered wise for only the more experienced traders to even consider this broker, and email any preliminary questions to the support team before registering.

The Secret To Finding Profit In Pairs Trading

“Quants” is Wall Street’s name for market researchers who use quantitative analysis to develop profitable trading strategies. In short, a quant combs through price ratios and mathematical relationships between companies or trading vehicles in order to divine profitable trading opportunities. During the 1980s, a group of quants working for Morgan Stanley struck gold with a strategy called the pairs trade. Institutional investors and proprietary trading desks at major investment banks have been using the technique ever since, and many have made a tidy profit with the strategy.

It is rarely in the best interest of investment bankers and mutual fund managers to share profitable trading strategies with the public, so the pairs trade remained a secret of the pros (and a few deft individuals) until the advent of the internet. Online trading opened the lid on real-time financial information and gave the novice access to all types of investment strategies. It didn’t take long for the pairs trade to attract individual investors and small-time traders looking to hedge their risk exposure to the movements of the broader market.

What Is Pairs Trading?

Pairs trading has the potential to achieve profits through simple and relatively low-risk positions. The pairs trade is market-neutral, meaning the direction of the overall market does not affect its win or loss.

The goal is to match two trading vehicles that are highly correlated, trading one long and the other short when the pair’s price ratio diverges “x” number of standard deviations – “x” is optimized using historical data. If the pair reverts to its mean trend, a profit is made on one or both of the positions.

An Example Using Stocks

Traders can use either fundamental or technical data to construct a pairs trading style. Our example here is technical in nature, but some traders use a P/E ratio or other fundamental factors to measure correlation and divergence.

The first step in designing a pairs trade is finding two stocks that are highly correlated. Usually that means that the businesses are in the same industry or sub-sector, but not always. For instance, index tracking stocks like the QQQQ (Nasdaq 100) or the SPY (S&P 500) can offer excellent pairs trading opportunities. Two indices that generally trade together are the S&P 500 and the Dow Jones Utilities Average. This simple price plot of the two indices demonstrates their correlation:

For our example, we will look at two businesses that are highly correlated: GM and Ford. Since both are American auto manufacturers, their stocks tend to move together.

Below is a weekly chart of the price ratio between Ford and GM (calculated by dividing Ford’s stock price by GM’s stock price). This price ratio is sometimes called “relative performance” (not to be confused with the relative strength index, something completely different). The center white line represents the mean price ratio over the past two years. The yellow and red lines represent one and two standard deviations from the mean ratio, respectively.

In the chart below, the potential for profit can be identified when the price ratio hits its first or second deviation. When these profitable divergences occur it is time to take a long position in the underperformer and a short position in the overachiever. The revenue from the short sale can help cover the cost of the long position, making the pairs trade inexpensive to put on. Position size of the pair should be matched by dollar value rather than number of shares; this way a 5% move in one equals a 5% move in the other. As with all investments, there is a risk that the trades could move into the red, so it is important to determine optimized stop-loss points before implementing the pairs trade.

An Example Using Futures Contracts

The pairs trading strategy works not only with stocks but also with currencies, commodities and even options. In the futures market, “mini” contracts – smaller-sized contracts that represent a fraction of the value of the full-size position – enable smaller investors to trade in futures.

A pairs trade in the futures market might involve an arbitrage between the futures contract and the cash position of a given index. When the futures contract gets ahead of the cash position, a trader might try to profit by shorting the future and going long in the index tracking stock, expecting them to come together at some point. Often the moves between an index or commodity and its futures contract are so tight that profits are left only for the fastest of traders – often using computers to automatically execute enormous positions at the blink of an eye.

An Example Using Options

Option traders use calls and puts to hedge risks and exploit volatility (or the lack thereof). A call is a commitment by the writer to sell shares of a stock at a given price sometime in the future. A put is a commitment by the writer to buy shares at a given price sometime in the future. A pairs trade in the options market might involve writing a call for a security that is outperforming its pair (another highly correlated security), and matching the position by writing a put for the pair (the underperforming security). As the two underlying positions revert to their mean again, the options become worthless allowing the trader to pocket the proceeds from one or both of the positions.

Evidence of Profitability

In June of 1998, Yale School of Management released a paper written by Even G. Gatev, William Goetzmann, and K. Geert Rouwenhorst who attempted to prove that pairs trading is profitable. Using data from 1967 to 1997, the trio found that over a six-month trading period, the pairs trade averaged a 12% return. To distinguish profitable results from plain luck, their test included conservative estimates of transaction costs and randomly selected pairs. You can find the full 34-page document here.

Those interested in the pairs trading technique can find more information and instruction in Ganapathy Vidyamurthy’s book Pairs Trading: Quantitative Methods and Analysis, which you can find here.

The Bottom Line

The broad market is full of ups and downs that force out weak players and confound even the smartest prognosticators. Fortunately, using market-neutral strategies like the pairs trade, investors and traders can find profits in all market conditions. The beauty of the pairs trade is its simplicity. The long/short relationship of two correlated securities acts as a ballast for a portfolio caught in the choppy waters of the overall market. Good luck with your hunt for profit in pairs trading, and here’s to your success in the markets.

ProCapital

Au service de votre performance

ProCapital

Au service de votre performance

Présentation

Filiale du Crédit Mutuel Arkéa, ProCapital, offre une large gamme de services à destination d’établissements financiers : sociétés de gestion, banques privées, réseaux bancaires, courtiers et banques en ligne ou assureurs.

ProCapital fournit à ses partenaires une offre modulable de sous-traitance de tout ou partie de leur activité retail via un modèle intégré unique permettant la mise en œuvre rapide de prestations incluant :

  • L’ensemble des outils transactionnels et/ou de consultation à destination des clients finaux ou des équipes de l’établissement financier
  • La négociation des transactions sur l’ensemble des classes d’actifs
  • La tenue de l’ensemble des typologies de comptes titres

L’offre de ProCapital intègre notamment une plateforme complète à destination des acteurs de la Gestion d’actifs :

  • Gestion de portefeuilles
  • Plateforme Conseillers
  • Outils de Business Intelligence
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