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How To Blow Up Your Forex Account In A Few Simple Steps

How To Blow Up Your Forex Account In A Few Simple Steps

After seeing new forex traders struggle, I’ve identified several common mistakes that often lead them to financial ruin.  These mistakes can easily be avoided.  Here they are:

1. Trading Small Time Frames.  By trading the one, five, or fifteen minute charts, you’re trading more noise.  This often leads to traders being whipsawed out of positions and sustaining multiple losses.

2.  Using A Martingale Strategy.  Doubling up after every losing trade.  I guarantee you will lose 100% of your account if you use this disastrous strategy.

3.  Not Using Money Management.  Risking too much of your account on one or two trades isn’t a good idea.  You will inevitably be wrong two to three times in a row and then your account will be depleted.

4.  Using a 1:1 Risk To Reward Ratio.  You have to take positions with tighter stop losses and bigger take profits to make money in the long run.  Otherwise, you’ll never be able to recover after a few bad trades.

5.  Using Simple Moving Average Crossovers.  If developing profitable trading systems were this easy, we’d all be millionaires.  Trading is much more complex than that.

6.  Using Expert Adviser and Signal Services.  If these experts could make as much money as they claim to, they wouldn’t be selling their services or signals for a few measly dollars per month.  Ask for an audited track record and you’ll never get one.

 

7.  Not Sticking To Your Strategy.  The only way to determine if your strategy is profitable or not is to actually test it.  Both backtesting and forward testing should be used.  You have to actually stick with your own trading rules or you don’t know how the strategy actually works.

8.  Not Using Stop Losses.  It is amazing how many forex traders say they don’t believe in stop losses.  All profitable traders who have been in the game long-term use stop losses.  Simple as that.

To have a better chance of developing into a profitable trader, you should avoid these common mistakes.

Archived under Forex News Comments

Hedging Binary Options

Hedging Binary Options

This strategy benefits you mostly when you have two options with a range of expiry, where both options could be in the-money. Then you are able to minimize your risk but also maximize your gain.

This option is popular in forex binary options, in which the value of the currency can change very quickly in either direction. In this scenario, hedging could be a viable option for reducing risk to the trader.

Take the following scenario of a forex binary option based on the price of the Euro. The Euro has been rising and is predicted to continue to rise at a determined breakout point. At this point you would place a call, expecting the Euro to rise. But what if the price changes quickly and falls? You can place a put option at another point, helping you to minimize risk in the event that the price indeed falls.

In the above scenario, you have placed a call for $ 500 at the option price of 5.1. You have also placed a put for $ 500 at the option price of 5.3.

The following outcomes could occur:

* The Euro price could expire at 5.1 exactly, making your call option at-the-money. You would receive $ 500 in return of your initial investment. In this case your put option would be in-the-money, and you would receive $ 850 on your initial investment. Total investment= $ 1000. Profit= $ 350. This trade would end up being a net gain. (-500 + 500 + -500 + 850) Currency Hedging With Options

* The Euro price could expire between 5.1 and 5.3, making both your put option and your call option in-the-money. You would receive $ 850 for both trades. Total investment= $ 1000. Profit= $ 700. (-500 + 850 + -500 + 850) This trade would end up being a net gain.

* The Euro price could expire below 5.1, making your call option out-of-the-money. You would receive $ 75 in return of your initial investment. In this case your put option would be in-the-money, and you would receive $ 850 on your initial investment. Total investment= $ 1000. Profit= – $ 75. (-500 + 75 + -500 + 850) This trade would end up being a net loss, but you still lose much less than you stand to gain in other scenarios.

* The Euro price could expire above 5.3, making your call option at-the-money, and you would receive $ 850 in return of your initial investment. In this case your put option would be out-of-the-money, and you would receive $ 75 in return of your initial investment. Total investment- $ 1000. Profit= -$ 75. (-500 + 850 + -500 + 75) This trade would end up being a net loss, but you still lose much less than you stand to gain in other scenarios.

* The Euro price could expire at 5.3 exactly, making your put option at-the-money. You would receive $ 500 in return of your initial investment. In this case your put option would be in-the-money, and you would receive $ 850 on your initial investment. Total investment= $ 1000. Profit= $ 350. (-500 + 850 + -500 + 500) This trade would end up being a net gain.

* In each scenario, you stand a chance of winning a greater profit by hedging, or placing two bets in opposite directions, than the all-or-nothing chances of one binary bet. In the instances in which you stand you lose money, you lose far less than the possibility you have to gain a greater profit than loss in other circumstances.

Archived under Currency Hedging Comments

Online Forex Trading Tools Forex Trading Advice

Online Forex Trading Tools Forex Trading Advice

After being a victim to one or maybe several scams that are growing with popularity these days you responsively are cautious towards risky products. I am here to tell you that after the correct research testimonials and reviews looked over and final decision you will find out that there is little risk involved. The biggest risk is finding the right Forex Trading Robot. Keep reading below for further in-depth personal reviews and testimonials for the best Forex Trading Systems on the market today.

I.T experts united and created a forexrobot that: a.) grows small forex accounts into tens of thousands of dollars. b.) never lost the deposit since 1999. c.) works fully automated while you sleep.

Fully automated forex robot that anyone can put his hands on! See undeniable proof of automated income.. >> works fully automated while you sleep! >> Click here now >>

Forex traders make use of Forex analysis to decide whether to buy or sell a currency pair at any given point of time. Forex analysis can be technical or fundamental in nature. Technical analysis is done with the help of charting tools. Economic indicators and news-based events are used in Fundamental analysis.

Forex automated trading systems don’t work because of ‘price noise’ in the market and because of the small amount of equity required to move currency markets. Further automated systems trade against each other causing more uncertainty in prices.

Trading Forex online has become the absolute ultimate in speed efficiency and convenience for modern day traders. One question comes to mind quite often for those who are just starting to trade. That question is ‘Should I use automated Forex trading software?’ What follows are some tips to help you decide if this is the right route for you to go in your trading.

Penny stock trading can be profitable. I am not disputing that fact. But there are stories that circulate that most of the penny stocks get hyped in email newsletters that many people subscribe to with a picture of this stock jumping from let’s say $ 0.15 to $ 15 in a matter of few days. Know these shocking penny stocks pumping and dumping schemes!

The use of forex softwares and robots has gained a lot of popularity in the foreign exchange trading industry. Many of the softwares used in the trading business have earned praise in the recent times. On of such robots is Forex Megadroid and it’s more popular because the robot seems to stand out from all the other softwares of its family.

You may have heard of the Forex market and thought you might want to try it out. Do you have enough information to do so? Forex trading is easy provided you done a little research and you understand what is involved.

Archived under Forex Trading Comments

FX Trading for Beginners

FX Trading for Beginners

The foreign currency exchange market, also known as forex or FX, is the largest financial market in the world in terms of volumes traded. Forex is a global market that does not have a single geographical, financial or regulatory centre. It operates on a 24-hour-a-day basis and is closed only at the weekend. FX traders attempt to correctly anticipate increases or decreases in the value of one currency as measured against another.

FX prices are always quoted in a pair and forex trading is essentially the purchase of one currency and the simultaneous sale of another. Some of the most commonly traded FX pairs are the Euro against the US Dollar (EUR/USD), the Euro against the British Pound (EUR/GBP), the British Pound against the US Dollar (GBP/USD) and the US Dollar against the Japanese Yen (USD/JPY).

The currency quoted first in the pair is the so-called base currency.

The second quoted currency is the variable; a GBP/USD price of 1.605 means that £1 is equal to $ 1.605.

FX spread betting involves speculating on price movements of a particular currency pair. It is a type of derivative trading, which means you do not actually own the underlying currencies.

Instead, FX spread betting involves price movements that translate into points; a particular currency movement translates into a point movement, up or down.

The total profit or loss from spread betting is calculated by the number of points, up or down, and if this increase/decrease was correctly anticipated. That difference is then multiplied by your trade size. FX spread betting uses leverage, meaning the total points movement is magnified in terms of financial value. This can result in amplified profits and losses.

FX Resources

Typically, economic data includes: national unemployment figures, updates on government budgets, surpluses or deficits and official speeches. Any of these can affect currency prices and it is essential to factor such information into your trading strategy.

FX trading resources can help keep you on top of the market, supply you with background information, trading news, third party analysis and economic data. In order to start trading FX, you can apply for an account with an FX broker or spread betting company like Financial Spreads.

FX brokers offer different types of accounts, prices and terms and conditions. They also occasionally offer promotions such as special deals, free offers and packages. A common feature of many FX trading accounts is a charting package, these can help you understand FX by depicting price movements over a period of time. Information and news resources are sometimes part of an account package

You can also get third party research, analysis, trading tips, market overviews and insights. Seminars and training sessions can also be helpful. Note that some third party research and analysis is free but you’ll normally have to pay for the better quality reports.

Spread betting does involve a high degree of risk to your funds and you can lose more than your initial stake. Please ensure that it matches your investment requirements as it might not be suitable for all classes of investor. Before making any trades, make sure that you fully appreciate the risk. Only spread bet with funds that you can afford to lose. Obtain independent financial advice if necessary.

Archived under FX News Comments

Ecn Forex Brokers Canada – Forex Metatrader Brokers

Ecn Forex Brokers Canada – Forex Metatrader Brokers

Ecn Forex Brokers Canada

Forex MetaTrader Brokers are those Forex brokers who offer the MetaTrader 4 (MT4) platform to their clients.

In case you are new to Forex – the “platform” is the software that allows you to monitor the market and open and close trades from within your forex broker account. There are many brokers out there and many platforms but MetaTrader is by far the most popular one. Consequently the number of Forex MetaTrader brokers is also quite large compared to the other brokers out there.

Why is it so important whether your forex broker offers the MetaTrader platform or some other platform? MetaTrader has not become the most popular platform out there accidentally. This software has some exceptional features compared to many of the other platforms available today! Let’s quickly go over them:

1. MT4 is Free. Forex MetaTrader Brokers let clients and prospective client download the software for free and create a demo account on their servers! This a great way to polish your trading skills without risking real money! Once you download the platform it is very easy to install and the interface is very intuitive and feature-rich. There are no “Bronze” versions, Web-version etc. All the features of MetaTrader are immediately available to all clients as soon as they download the platform.

2. The MetaTrader platform is integrated with Charts, meaning that not only does it show current prices of the currencies to the users but it also allows them to open charts, place Technical Analysis indicators and oscillators on the charts (e.g. MA and RSI) all in one application. You will not have a whole mess of windows all over you desktop – it’s all contained tightly within the MetaTrader 4 main window. As a direct consequence of this integration – placing an order is really easy! Simply right click on the chart and select New Order from the Trading context menu! If you click in the area where you want your price to be the system will offer to open a pending order at that price! How convenient is that?!

3. The fact that the charts are a part of MT4 and automatically available means that you are actually getting 2 pieces of software for free – the platform and the charts! Remember – there’s still many brokers out there who will give you the trading platform for free but will not provide you with free charts. You have to pay to get access to charts with these brokers. Not the case with forex MetaTrader brokers! Ecn Forex Brokers Canada

4. Automation! Perhaps one of the best feature of the MetaTrader platform and that is why both Forex MetaTrader brokers and their clients love this software is the built-in automation system! MT4 supports a special programming language called MQL which allows traders to create their own indicators, scripts and even fully automated trading robots! The robots are called EA’s (“Electronic Advisers”) and are in essence programs, which everyone can use with MetaTrader to analyze data, automate a range of tasks, create alerts or even automate the entire trading process completely!

There are many EA’s available with the most popular one definitely being Forex-Autopilot. This amazing MQL program will trade on your behalf – monitoring the market, opening and closing positions for you day in and day out, regardless of whether you are sitting at your computer or playing golf or sleeping!

Even though Forex-Autopilot is a pretty profitable little robot and has sold by far the most copies of all similar products available on the market, my personal vote goes for FAP-Turbo, another robot developed by the same team. Although it is not quite as popular as forex-autopilot (and the only reason in my opinion is because it is brand new – released in Nov 2008!) it definitely outperforms FAP in all aspects: providing real-time results on its web site (information from 3 real accounts being traded in real time, streamed to the site LIVE!), placing server-based Stop-Loss and Take-Profit orders (Forex-Autopilot relied only on internal, programmatic stop loss and take profit, and providing 2 strategies which the robot selects automatically which one to used based on timerframe and market conditions.

5. MT4 offers tons of other features not available on other platforms. It has a huge arsenal of technical analysis indicators and you can always plug in more – since you can add more MQL modules to your MetaTrader station at any time!

You can customize the look and feel of your charts. You can export and import your data and preferences.

Another very important feature is that every Forex MetaTrader broker keeps an archive of historical prices and these prices are available for download through your MT4 system. You can use these prices to test your own strategies or you can run the robots on these data thus testing how profitable it will be. Many other parameters such as slippage, Stop-Loss and Take Profit available at time of placing an order, etc., to detailed to over them here! Ecn Forex Brokers Canada

Archived under Forex Broker Comments

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