Forex Account Management Doesn t Have To Be Hard. Read These Three Tips
Simply said, no other trading instrument comes even closely to forex market when it involves liquidity, 24hr market environment and last however not the least, profit potential. Forex (currency) market is the largest (most liquid) financial market in the world, by having an average daily volume in excess of US$ 1.5 trillion, which will be more than most of the global equity markets combined.
Forex trading day starts in Wellington, New Zealand followed closely by Sydney, Australia, Hong Kong and Singapore. Three hours later trading day begins in Dubai (UAE) and other Middle Eastern countries. In number of hours they're followed closely by Frankfurt, Zurich, Paris, Rome... London is the last anyone to open in Europe and five hours later it's accompanied by New York, Chicago and finally the West Coast. The busiest hours are early European mornings because during those times major Asian exchanges continue to be open and European afternoons because during those times major US markets are open at once as Europe. Therefore, wherever your home is and whatever work hours are you currently can always find I do buy into the statement that financial markets are efficient. They're very efficient in a very important factor - transferring money from bad and naive traders/investors to the pockets of those who know what are they doing. You're now probably thinking about "What am I doing in this field? Do I've any chance to succeed?" The clear answer is "Yes, you do. ".The device that we are planning to reveal for your requirements is really a fail proof entry and exit strategy that will put you on equal level with big investment firms and with experienced professional traders. 5 some time and energy to take part in forex trading as opposed to stock market where you are usually limited to the standard business hours.
Another property of forex market that makes it an excellent trading instrument is utilization of leverage. Many beginning traders don't fully understand the concept of leverage. Basically, when you have a set up capital of $5,000 and if you trade on a 1:50 margin you can effectively control a capital of $250,000. However, a two percent move against you and your capital is completely wiped out. If you are a beginning trader you shouldn't use over 1:20 margin and soon you get comfortable and profitable and then and only then you can attempt to utilize higher margins. What does 1:20 margin mean? This means that along with your $5,000 you'll control a capital of $100,000. Let's say you are trading EUR/USD and by utilizing our entry strategy you have chose to enter the trade on an extended side. Which means that you're betting that USD will depreciate against Euro. Let's say current EUR/USD rate is 1.305. Again, if your trading capital is $5,000 and you are using 1:20 leverage you will effectively be exchanging $100,000 to Euros. If the existing rate is 1.305 you will receive 100,000/1.305 = 76,628 Euros. If the trade goes in your direction the margin works in your favor and 1% decline in USD will mean 20% increase in your set up capital. So if EUR/USD rate moves from 1.305 to 1.318 you will be able to exchange your 76,628 Euros back again to $101,000 for a profit of $1,000. As your set up capital was $5,000 it is effectively a 20% increase in your account. However, if the trade went against you and USD appreciated 1% vs. Euro your account would be reduced to $4,000. That could not need happened as our strategy has generated in hard stops to stop such outcome.
And the next and equally important property of forex market is the truth that trends in forex market last longer and are more clearly defined than in any other trading instrument.
Anybody thinking about some more details about forex trading should have a look at high-quality course like Peter Bain [1] at Forex Mentor. His course provide clear guidelines about when to enter a trade, what to expect in terms of market movement, when to exit a trade, just how much loss can be accepted in the event the deal moves from the trader, and some secret techniques which can be easily implemented. Following his simple guidelines will help you become a successful forex trader.
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