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.
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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! |
AuthorMy name is Catherine and I am new to forex trading. Archives
August 2017
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