Basic Money Management in Forex Trading

December 21, 2009 by  
Filed under Forex Trading

Exchanging currency on the forex market as a forex trader is an activity that is practiced around the world by thousands of people. Financial managers, individual investors trading through brokerage firms online.

Since Forex trading can be a risky business, some common basic principles are developed by currency traders to enable them to better manage their money.

A smart way to manage money is to use stop orders. This device mitigation of risk is a sell order at a price below the original selling price. And if the currency drops to that value will be sold automatically by the broker. It should be set at levels low enough that it does not trigger falsely by normal daily fluctuations of the currency. It’sa good way to put a limitation on the possible loss of the existing position.

Often an investor attaches to an investment loss of speed, either because he is emotionally attached to this investment, either because he thinks it will rebound soon. In the world of forex trading works at a fast pace, it is not always the best course of action to follow. Usually it’s better to leave a position in fall and try a different tactic.

Regarding the trading of forex, another technique of good money management is to use hedging. Traders can hedge their currency positions in several ways, but most popular is the use of futures and options. With these investments of financial instrument futures, you pay some money to buy an allowance money to a future date at a fixed price. Traders buy these financial instruments to hedge a long position, with the value at which the long position was taken and the currency that was used to purchase the original position. In reversing the order of values, a fall in the long position one currency will gain money on the financial instrument futures trader and by offsetting the initial loss.

The mantra that good traders on the trading of forex follow is to cut losses short and let it run gains. As everyone wants to see their investments grow, a downward trend in the amount of earnings incurred when a transaction is a bad thing. Therefore, this trend should be stopped as soon as possible by closing the losing position.

Know The Rules in Forex Trading

December 19, 2009 by  
Filed under Forex Trading

Behavior fulfills excessive emotions when trading on the forex market can be fatal.

If fat loss, emotional behavior can sometimes push the inexperienced trader to come back too quickly on the market at an inopportune moment to try to recover money that has been recently lost. The trader thinks he can catch up by multiplying the number of operations.

The best way to address these problems is to establish a list of rules to follow in the trade of forex and never deviate from these principles.

Here are some rules that every trader could follow to increase its chances of success:

1. Leave your emotions aside.
The currency trading is like any other busines, and should be treated as such. As it is difficult to separate from the emotion caused by a loss, consider that once the loss written in the books, there’s nobody who can change that. So the best course of action is to try to learn from all the mistakes that have been committed, and process the next transaction in the same manner as if the money had been earned on the previous transaction.

2. Never make over trade. This is due to rule number 1 where often, the emotions have been running a forex trader to trade too. By trying to compensate for its loss, the forex trader beginner tends to make hasty decisions that may be detrimental to his position of account. Thinking that more transactions generate more money, too many transactions based only on intuitive decisions can quickly deteriorate the status of your account.

3. Follow the trend.
One thing that thousands of traders who practice fundamental analysis or technical analysis (or both) agree is that the Forex market follows trends. The identification of these trends may mean the difference between success and failure. Following the general trend of the currency, you can seize the opportunity to take advantage of the trend until it is reversed.

4. Stay out of the market if there is any doubt.
If a trader can not identify the trend that follows a currency, it is better to avoid a time until a better image can be formed on what is happening on the price trend.

By following these basic rules, the tarders Forex stay away from problems caused by hasty decisions based on emotion or lack of analysis.

Hedging in Forex Trading ?

December 6, 2009 by  
Filed under Forex Trading

Just like in the stock market, forex investors often use a strategy called hedging to reduce some of the risk involved in trading. Many people believe in hedging transactions like buying an insurance policy for their currency position. It acts more or less the same way. Using investment vehicles known to financial futures, Forex traders can rest easy knowing that all losses are covered by the backup plan.

A type of financial instrument futures that many forex traders use to hedge a position is a futures contract, which is an agreement for the exchange of one currency to another at a specified futures price at the last the closing date. The contract currency futures are bought and sold on the forex market just like any other instrument such as shares or currencies.

For example, say you used to use the dollars to take a long position in euros on the forex market, but you are worried that the price of euro fell against the dollar. One thing you could do is buy a futures contract dollars using euros. As external factors affecting the prices of currencies, the price of futures contracts up and down as well, allowing your contract to Euro-dollars to offset your long position in euros. If the euro weakens, the price of futures contract rises, and vice versa. Thus, you have therefore eliminated the risk of your investment money.

Another form of hedging in the forex market is practiced regularly by companies who trade internationally with many clients in Europe. A weaker euro would cost money in the long run because the original price quoted in euros does not result in as many dollars. Taking a long position in dollars using the euro, the company would just as much money on the Forex it lost to fall on the value of the euro. Similarly, if it loses money on the forex market due to a fall in the dollar, the company would compensate the increase in profits due to the greater value of the euro on the sale of its products.

Choosing Online Broker

June 7, 2009 by  
Filed under Forex Trading, Stock Trading

It is necessary to make a mix of his personal priorities to choose a broker who is both the most efficient in terms of management tools, the cheapest and most generous with information. Rates vary from one broker to another, both in terms of transaction fees at the level of care costs and subscription services …

Compare and find the intermediate cheaper becomes increasingly complicated. The pricing plans are complex enough to get lost. Many packages and packages available. The rates usually vary according to size of orders means that you make and the number of monthly orders rose. This usually involves a fixed and a variable part. Also some dealers display prices excluding taxes. In summary the most competitive broker will not be the same after the investor profile. Establish a check list is required.

Examples
:
Account opening: free or not. What is the minimum required?

Service Access: Is there a limit to the Internet or is it possible to pass his order by phone?

What type of products can I trade? Purchase sale of French equities, warrants, bonds, …

Round trip is made in intraday billed? (in a single day of trading)

Forex Trading Analysis for Traders

May 11, 2009 by  
Filed under Forex Trading

When you invest your money, it’s a good idea to begin by understanding what you’re going to invest.

The stock market is a complicated entity, and do business in the minimum trading requires a fair quality of knowledge base, understanding and acceptance of high risk factor.

The more you know in advance about the functionality of the system, the less likely will you do that you have and you will avoid the heavy losses.

Firstly, of all and probably most important point in the shipping business, you should understand that what you invest is real.

When you buy or sell shares on the market, bear in mind that you deal with your money, not pieces of paper you are a buyer and seller of real property of a particular company, its products or of another product.

Possession of a “share” means you’ve really bought into the company and you become so much a part owner of this product.

Of course, you could be one of millions of shareholders, as most companies and products are carefully divided into pieces at all, but you’re still regarded as an investor in that company or product until you sell your shares .

Think about that company as if it was the vehicle that you share with your partner or companion.

You may have even bought the oil filter was put on the car, and you can estimate that the investment gives you so ownership rights.

However, when you look at the overall cost of the car, you’ve really contributed very little to this quantity. However, as you continue to refuel the car and take care, you can claim ownership of the car.

The value of a company and its products or services can float without interruption, the value of stocks you own will not be identical from day to day and may even change from hour to hour.

When the price tends to fall and the bottom is an ideal time to buy. This is by far the first thing to bear in mind in the world of trading. “Buy cheap and sell at high prices and vice versa without stopping”.

Control Your Emotion is The Key in Forex Trading

March 11, 2009 by  
Filed under Forex Trading

Trading in Forex is not easy. Before entering, all FX traders think they will get rich very quickly and to 20.000 USD in one or 2 weeks. But starting their trade, they realize that this is not true, it is not easy to make money. Especially when working with silver. The Forex is a very tricky business. Many of us believe that there is a conspiracy planned by people who know what we think, what we do and do the opposite to steal our money. Often we think to the contrary, our decision (if I see that the market is going up then I’ll sell). Then we start looking for someone to help us do at least 200 or 300 pips per month. Most of us probably work with adviser who take our money and probably does not help us to make a decent profit. Many of us think to stop the trading of Forex. I rather think that most people do not leave so easily because we see a golden opportunity to have our own business and make a fortune.

Foreign currencies are an opportunity to make money and at the same time is an opportunity to lose our money. We can make a fortune if we knew how to handle the Forex. By cons, if we do not know how to control the Forex it will destroy us. That is why we must be stronger than him.

Moreover, if we do not know how to control it with our own hands, he will destroy us too. How, then, be stronger than this beast? Simply by learning, observing and practicing. The Forex market will not go anywhere. It will seek and will run forever. Watch how the experienced traders are now so good. Look at the charts and see the commonalities. Watch why the price changes direction. If you are the reason that influences currency, you have in your hands the first tool that will help you to control.

Every new thing you learn, try it on a demo account, see if it is valid and expand it. In this Forex article, I will help you find your way. This article offers Forex does not fish but teach you to fish. There is no conspiratorial theory in this area, no large or small people. We lose because we do not know, and the first thing we must do to become good traders is to admit that we do not know and that we must always learn.

In this article Forex, I’ll give you some clues. Then I’ll let you learn, observe and practice.

First, you must use forex fundamental analysis and techniques in conjunction, the two complement each other. So do not count on leaving the other side. The root is one of the reasons that influence the market. If you’re in a long trade and suddenly your currency collapsed, go and watch if a report exists. Then look at what is expected and what the data. After that, compare that data to your chart and you have your first tool that lets you control your business.

Secondly, in my eyes, all technical indicators have not helped me at all. I tried all combinations. Nothing worked. The indicators describe the market situation but do not give information on the following direction. I read an article Forex someone who describes his strategy in Forex trading. I was completely lost, he uses a combination of 12 indicators EMA340, SEMA890, EMA2900 etc … and inserting FIBONACCI. I was totally lost. Even if his strategy has 95% success, I will not use it because I can control the market by using simpler techniques. We do not need to look for indicators. Me, I use only one indicator Bollinger Band is the perfect weapon in my fight against the trading in Forex. Watch the Bollinger Band and see how it affects the currency. Focus on it and you read this article good Forex This will allow you to discover many things. You will then have your second tool.

Thirdly, suppose you’re on a long trade and suddenly without reason the price of trading crashed and there was no report. It just dropped. It’s weird. The strange things are those we do not understand. Observe your graphics, go back several hours or several days back, put a line of hollow point swing higher and you will see that there is no mystery. This line will be dug your resistance. If the price breaks, it will continue to rise, but go where and for how long? … Look closely and you will learn what I did. It does not take much. Just do what you can. This beast is not as fierce as that. The escape is your fourth tool. (Rpchost.com provides traiders very important tools with which they can trade with more details, check with Rpchost.com section of free Forex signal. You can access the free basic signal).

Fourth, what period should we use? It is for you to choose the appropriate time, H1, H4, D1 … I do not know, compare charts and see the appropriate period. The period is important. When you find you have your fourth tool. (Traders can access the calendar section of the site’s World Economic Rpchost.com. It is a great tool that helps traders identify and confirm their trades when an economic report appears.

Who Become A Loser in Trading

March 11, 2009 by  
Filed under Forex Trading, Stock Trading

You will not get rich quickly. Almost all investors are convinced they’ll strike a blow and a gush of fortune ticket in the blink of an eye. This is probably the worst strategy you can have for the optimist simply is not an investment strategy!

More than optimism, it also means greater claim to decrypt is that many scientists and researchers have still not found. What you need is to develop an investment strategy that can work for you for a long time.

Do not be confused with a casino. Most investors do not know when to buy low and sell high. Yet the basis of trading but people continue to pursue investment strategies not only risky but without basis or merit. I will cite an example, an investor from Sunday, although the stock market is closed that day, which starts by buying an option with an exercise price higher over the course and a very short deadline. The chances that the strike price is reached and almost nil, given the maturity and given the market trend. Recognizing that despite everything he replied, “but with a trade like this if it works I’ll win big.”