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Here is a few pointers on choosing a wise stop loss to avoid big losses:
Just a little secret here, please be advised that brokers are continuously manipulating prices on the market and will therefore go for your stop loss so they don't end up in a loss themselves. As it is, only the US Dow is not manipulated as it's run by one organisation. Please be aware of this as you place your trades and stop losses. The market in which brokers operate works in such a way that, once you open position, they will open an opposite position to yours and whichever outcome you get, will be their loss or gain. T his is how they accumulate enough funds to fund pay outs in case of traders winning on trades. They also make commission on the number of trades you place and what spread they are or even both and this can only happen if they stop you out and somehow get you trading again and again. That's why many brokers assign account managers to help you on your learning journey. Essentially, to beat the brokers at their game, one can decide not to enter a stop loss but have it either written down in notes or in your mind and set an alarm in your trading system to remind you of when the price is at you chosen stop loss and go in close your position. Tricky and time consuming as it is, this is the best way to get the most out of your trades. Hope this helps. British voters on Thursday, 23 June 2016 voted to leave the European Union but what does that mean for your trading? The decision to leave the EU has impacted commerce, finance, politics, migration, security and even agriculture. In the run up to the election, many traders took to trading less volatile currencies especially the Japanese Yen and the Swiss Franc. However, as the decision loomed, many decided to bet their trades either way should it not favour Brexit and many did reap substantial amounts of profit. It must be said though that the British Pound has suffered a great deal in the aftermath of the decision and one can only hope for inflation to keep low enough compared to our European counterparts, for the Central Bank to regulate the interest rates accordingly so as to attract foreign investors and for the housing market to continue holding in order to sustain the value of the pound. In the currency market, at any one point, some currencies will be more volatile that the others, so it's advisable to keep up to date with the current economic shifts in the market so as to decide what trades to place and when. As time goes by and the Brexit negotiations are agreed and executed, the British government will hope to benefit in being able to control the national borders, break away from the European Union bureaucracy, regenerate the British fisheries, generate more savings for British consumers, getting hold over the much loved British values and most importantly being free from the European Union direct membership payment in excess of £17.4 billion. With these achieved, hopefully the pound will regain value and stability and be once again be the top favourite trading currency. Forex trading is not familiar to any every day person however it has of late become a very popular tool for a good number of people to make some extra money. It has emerged as being an incredibly popular vehicle in which people place their funds. We will explore below as to why this has become the case. First of all, once one has good knowledge of the trending forex and has studied and explored the markets in line with the current economic indicators, they are likely to be in a good position to place trades that are likely to fetch high earnings. For those motivated to be successful in the forex market, trading in foreign currency can provide a path to wealth. Again, this contributes to the popularity of such trading. Forex trading has also become popular because it provides a viable alternative to other forms of investing and trading. Although the trading market has lately been unstable leaving many not sure where to put their funds, the fact that many people have reaped huge profits from it still makes it a popular choice for investing funds. The ease accessibility to trading is another reason for the huge popularity of forex trading. With the possibility of opening personal accounts online regardless of whether it's in office or at home or even on the move has let to a surge in the number of people interested in opening accounts with online brokers compared to previous systems where one had to contact a broker over the phone to open accounts and also with instructions of which trades to place and when. New technological developments have made things much more accessible. Specifically, there are platforms which have emerged that allow a trader to use software to execute trades. These trades can be executed automatically or manually based on preset indicators. This has made it so much easier for traders to get online and trade as and when required. In addition, along with the above, some trading platforms do offer some indicators, signals and pointers regarding the current markets and therefore these help traders to make informed decisions when it comes to what trades to open. These features have proved popular with traders and some have been able to place very profitable trades. It's always a good time to start forex trading so if you are thinking of starting, get yourself immersed in the resources available and get trading and hopefully you'll discover why it is a popular tool. Being a trader in the Forex market has good points and bad points. There are times when one will earn a lot of profit and there will be times when one will make lots of losses. Forex trading is complicated, risky but can also be rather profitable. To be efficient and effective at Forex Trading, one has to be ready to take some risks. Different currencies are traded in the Forex market. This market was created with the whole purpose of meeting the demand and supply of different kinds of currencies by individuals, companies, and governments. Most of the traders are investors, businesspersons, speculators, businesses, and those in the industry of banking. Every trader beginner or advanced is encouraged to have their own trading system. For starters, you can start with a small investment. With the system in place, you can easily decide when to enter the market and when to exit. The cost for every transaction is very minimal and so you can trade for as many times as you like in a day; besides, the Forex market is open round the clock. The market is also often influenced by global events and news. It is a good idea to keep abreast of the happenings in the economic and business news as this will influence the outcome of the trades placed around the time there are big changes in the industry. Those who work in the banking industry are lucky in that they have this information readily available to them. Never enter the Forex market with limited knowledge. You must be aware that around 90% of all Forex traders suffer great loses. Only 5% are able to gain profitable results while the remaining 5% are only break-even. You will need to have adequate knowledge about the Forex market. You can start by researching online for useful information about Forex trading. With an internet connection at home and efficient trading software, you can make educated transactions. You can’t rely on sheer luck if you want to succeed as a trader. You need to study and analyze the market trends while considering market indicators and generators. You can also get a broker to help you out with your trading concerns. When you open an account with one of the brokers, they will usually assign an account manager to help you should you need some advice and support. Lastly, don't let your emotions dictate the way you trade as this will lead to some unfortunate and frustrating choices. Try to stay within your usual trading limits and take a break if you feel you are losing control. The foreign exchange markets (also known as Forex, FX, Currency Trading) provide ways for institutions and retail investors to take financial advantage of price fluctuations between currency pairs. If you are interested in expanding your investment options and learning more about how you can make money in the financial markets, Forex should be a serious consideration for you. It should be noted that Forex trading is considered a high risk form of investment as the FX brokers would often give you high leverage (i.e for every Pound Sterling in your trading account, you are able to trade £10, £50 or £100) and this exposes you to much greater return on your investment but with the risk of equally large losses. Due to the level of risk involved in Forex trading, it would be extremely wise to practice using a demo account and spend a great deal of time understand what factors influence the Forex Exchange markets. For instance, the vote by the British people in a referendum to exit the European Union was seem by the big players in the financial markets as bad. This resulted in the sale or weakening of the British Pound again other currencies. Other news events that influence the Forex markets are interest rate decisions, employment figures, major disasters, change in governments etc. Below are the different groups of traders: Fundamental traders; these traders only trade news events and economic figures They carry out fundamental analysis and make decisions on what direction a currency pair is headed. The other kind of traders in the market are Technical traders. They create indicators based on mathematical formulae and make decisions based on the levels or chart patterns thrown up by these indicators. Most indicators are lagging indications because they present a graphical representation of what has happened already. You also have predictive indicators which use past price action to predict levels at which price reversals may likely occur. The most common amongst predictive indicators is Fibonacci retracement levels. The third type of trader is one that combines both Fundamental and Technical analysis. This approach aims to pull together the best of both Fundamental and Technical analysis. A news event might indicator the direction of movement for a currency pair (e.g. GBPUSD) whilst a collection of technical indicators actually give alerts on when to enter the trade and at what levels to set the take profit and stop loss. You can also learn to stand on the shoulders of giants. By the this, I mean you could subscribe to the trading signals of well established and successful traders. You would get price levels at which to enter trades (buy or sell), take profit and stop loss levels. More importantly, you would learn the rationale behind each trade that is called out by the person or company you're subscribed to. This way, you would be making money whilst you are learning. Eventually, you would be able to make your own trade predictions and you will find that they will be in line with that of the more established trader. In conclusion, Forex trading can be very lucrative regardless of which style one adopts once the knowledge of what factors move the market is acquired and behaviours of trading indicators are learnt. Combining this knowledge with a very disciplined trading style could be the start of a very lucrative venture in the Forex markets. Do not trade until you have got at least one system that has been proven to work in your demo account. When you transition to Live account, be sure to remain disciplined and start of with a small deposit. Best wishes! Forex Trading in a lay man's terms is the is the speculation on the price of one currency against another. For example, if one thinks the pound is going to rise against the U.S. dollar, you can buy the GDPUSD currency pair low and then hope to sell it at a higher price to make a profit. However be prepared that when you buy the pound against the dollar and the U.S. dollar strengthens, you will end up making a loss on that trade and this explains the whole idea about speculative trading. One of the key elements behind forex’s popularity is the fact that forex markets are open 24-hours a day from Sunday evening through to Friday night. Trading follows the clock, opening on Monday morning in Wellington, New Zealand, moving on to Asian trade then to Tokyo and Singapore, before moving to London and closing on Friday evening in New York. The fact that prices are available to trade 24 hours a day helps traders to place their trades at their preferred time of the day or night. Trading in between different market openings is controlled in a way that when a price jumps from one level to the next without trading in between, it is less and this is referred to as gapping. Many traders are who have had a few months or years trading are able to watch and follow the markets of interest and are therefore able to place trades based on what they hope to make them the highest earnings. It's always a good idea to keep in mind that trading is not only about making profit, at times losses are likely to be made and it's advisable to be ready for these moments. Forex Trading can be enjoyable once you have the tricks and tips of trading profitably. All the best! |
AuthorMy name is Catherine and I am new to forex trading. Archives
August 2017
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