Fri 28 July 2017
Filed under online trading
The foreign exchange market (forex or FX for short) is one of the most exciting, fast-paced markets around. Until recently, forex trading in the currency market had been the domain of large financial institutions, corporations, central banks , hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell currencies easily with the click of a mouse through online brokerage accounts. I will not be teaching you the history, indicators and all the other stuff (fluff) out, that will not get you making money. You can find this type of training for free online. However, I will be teaching you what my trading concept is, how to implement it and manage it. I have included trade examples from start to finish.
Exceptional MQL4 programming capabilities - Of course, you must look for a highly skilled and experienced expert advisor and custom indicator programmer. The level of a programmer's technical skills can be assessed through the samples of recent work. He or she must be able to build indicators and EAs from scratch based on clear specifications.
Margin - The deposit required to open or maintain a position. Margin can be either free” or used”. Used margin is that amount which is being used to maintain an open position, whereas free margin is the amount available to open new positions. With a $1,000 margin balance in your account and a 1% margin requirement to open a position, you can buy or sell a position worth up to a notional $100,000. This allows a trader to leverage his account by up to 100 times or a leverage ratio of 100:1.
The currencies most traded, commonly abbreviated to the country name and the currency name, are the United States Dollar (USD), the Euro (EUR), the Japanese Yen (JPY), the Great Britain Pound (GBP), the Swiss Franc (CHF), the Canadian Dollar (CAD), the New Zealand Dollar (NZD), and the Australian Dollar (AUD).
The simplest way to explain leverage; it gives the trader the ability to trade larger amounts of currency with a smaller deposit amount, therefore increasing the trader's buying power. Leverage is presented in ratio form; 1:1000 for example means that your buying power is increased by 1000 times. Deposit €1000 and the broker will match it to make it €1,000,000. High leverage essentially gives opportunities to traders that they would not have had otherwise. Small traders with little capital can take advantage of high leverage to maximize their profits. Just as profits can be maximized however, so can losses, so leverage must be handled with care and must not be used continuously, especially by those who do not need it.
If you're aware of the risks here and still prepared to dive in, here are NerdWallet's top picks for the best brokers for forex trading One suggestion: All of these brokers offer free demo accounts so you can test the market with virtual dollars. Dip a toe in with some play money before you dive in with your own cash.
If there is a big pattern, instead of trading the breakout, let a breakout happen. If the price has a strong breakout, then it will likely continue in that direction. Watch for a pullback to near the original breakout point, and then enter on that pullback. That way you can use the same consolidation breakout” method I use in this article, with a relatively stop loss. The price has already broken out and showed strong momentum in the breakout direction, so you are just trading a pullback, similar to a trend trade. I usually opt for this method on ranges and stuff like that (especially big patterns, where a big move IS likely to ensue following a strong breakout)…that way I avoid all the false breakouts and the battling that goes on near the breakout levels. I covered this concept briefly in this article: - calling it the ‘second chance entry' method. In my ebook I call it the ‘good-bye kiss' method.
Most unsuccessful traders risk much more than 1% of their account on a single trade; this isn't recommended. It is possible for even great traders and great strategies to witness a series of losses. If you risk 10% of your account and lose 6 trades in a row (which can happen) you have significantly depleted your capital and now you have to trade flawlessly just to get back to even. If you risk only 1% of your account on each trade, 6 losses is nothing. Almost all you capital is intact, you are able to recoup your losses easily, and are back to making a profit in no time.
Unfortunately, in the world of Forex trading systems and strategies, there are all sorts of people looking to sell you very expensive trading systems via very convincing sales pages that look and sound very professional. However, if you dig into them a little bit (literally any of them) and do some research, you will quickly find the systems are unsustainable and they are just showing you an ‘ideal' looking track record over a fixed period of time. It's also possible to make fake track records that look ‘real', so take any ‘track record' you see advertised as ‘proof of performance / results', with a grain of salt.