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Sunday, April 27, 2008
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Featured Global Forex Trading Article
Main Drawbacks of Forex Traders
Why is it that very few traders succeed in the Forex trading environment while the grand majority of traders fail to achieve success? There is no hard answer to this question, there are a few things that will put you one step ahead and will definitely put the odds in your favor.
The main purpose of this article is to guide you through some important aspects of Forex trading. But in a different way, instead of telling you what to do or the best way to do it, it will tell you what to avoid. Sometimes it is better to identify the main drawbacks on a discipline and then isolate them so we have the best results at a certain level of development.
The Holy Grail
Many traders spend years and years trying to find the Holy Grail of trading. That magic indicator or set of indicators, only known by a few traders, that will make them rich in a short period of time.
Fact: Well, there is no magic indicator, nor a set of indicators that will make anyone rich in a short period of time. The main reason of this is because market changes, every single moment is unique. Every Forex trading system will fail from time to time. Our work here is to find a Forex trading system that fits our personality as traders, otherwise the trader will find it hard to follow it.
Looking for Easy Money
Unfortunately most traders are attracted to the Forex market for this reason. Mainly because of the publicity showing or rather trying to show how easy is to trade and make money in the Forex market.
Fact: Yes, it is very easy to trade, anyone can do it. It is as hard as one click. But the second part of it isn't that easy. Making money or achieving consistent profitable results is hard. It requires lots of education, patience, discipline, commitment, and this list could go to infinite. In a few words, it is possible to have consistent profitable results, but definitely it is not easy.
Looking for Excitement
Some other traders are attracted to the Forex market or any other financial market because they think it is exciting to be a trader.
Fact: Yes, it is very exciting to trade the Forex market. But if this is the main reason you are still trading the Forex market, sooner or later you will discover the most expensive adventure you have ever known. Do some thinking on it.
Not Using Money Management
Most traders forget about this important aspect of trading. They think they shouldn't be using money management until they achieve consistent profitable results. They totally forget about the risk side of trading.
Fact: Money management allows your profits to increase geometrically, but also limits your risk on every single trade. Money management tells you how much to risk on each trade. Using money management is a must if you want to achieve your trading goals. By using money management you make sure you are going to be able to trade tomorrow, the next week, month and the following years.
Not Being Psychology Tuned
This is one of the most underestimated subjects when it comes to trading. One of the main principles of financial markets is that the price of each instrument is based on the perception of each individual participant �the crowd.� In other words the price of each instrument is determined by the fear, greed, ego and hope of all traders.
Fact: Being aware of all psychological issues that affect the decisions made by traders will definitely put the odds in your favor.
Lack of Education
Education is the base of knowledge on every discipline. As lawyers and doctors require several years of college until they get their degree, Forex traders also require long years of study. It is better to have someone experienced to guide you through your trading, since some information could take you in the wrong path.
Fact: The market teaches us invaluable lessons on every single trade made. The process of education for a Forex trader could take for ever. That's right, we never stop learning. We should be humble about the markets and our knowledge; otherwise the market will prove us wrong.
These are some of the most important barriers every trader faces when trying to trade successfully.
Trading successfully the Forex markets is no easy task, it requires a lot of hard work to do it right, but with the right education, you will put yourself closer to your trading goals.
More Thoughts On Forex
currency exchange
Ebb and flow of capital between nations, otherwise known as Purchasing Power Parity (PPP) is the central factor that determines market momentum. In addition, fundamental economic forces such as inflation and interest rates are constantly influencing currency prices. Faith in a government�s ability to stand behind its currency will also impact currency price. This is done in two ways: controls and intervention. Controls restrict citizens from doing things, which have a negative effect on the exchange rate (such as sending money abroad). Intervention takes two forms: changing the interest rate on the currency to make it more or less attractive to foreigners, or buying/selling the currency to raise or lower its market value.
currency conversion
The Forex is affected by many factors. These factors usually follow a certain trend so it is important to understand how each factor works in forecasting the Forex. Some are good indicators alone while others should be used together for accurate Forex predications.
More info on Forex trading
forex brokers
USING STOPS
Please always give stop order per your risk profile when you open any new position. Medium-term reversals can be confirmed only in monthly, weekly and daily charts. Chart reading is not to predict the tops or bottoms of any move, but to confirm the change of trend as soon as they are made and adopt right strategies in that new trend. Good trades.
currency exchange rate
The fluctuating oil prices of the past year - 2005 - are a good example of what can happen when factors affect the price and supply of oil. Remember from basic economy courses that higher oil prices act to put the brakes on consumer spending. This will be true as long as the major source of oil for industrialized countries is petroleum based. The price of all goods produced hinges on the price of a barrel of oil. If the oil prices rise, so do production and supply prices for most consumer goods. In addition, the expenses of individual consumers rise as they pay more to fuel their automobiles and heat their homes. The net result is a downward swing in the economy of the country until it hits a rallying point that starts it back on an upward trend.
Global Forex Trading News From Around The World
RBS set to raise extra $24B
Tue, 22 Apr 2008 13:04:32 EDT
Read full story for latest details.
Global Forex Trading | What Is Forex
¶ 2:53 AM 0 comments
Featured Global Forex Trading Article
Main Drawbacks of Forex Traders
Why is it that very few traders succeed in the Forex trading environment while the grand majority of traders fail to achieve success? There is no hard answer to this question, there are a few things that will put you one step ahead and will definitely put the odds in your favor.
The main purpose of this article is to guide you through some important aspects of Forex trading. But in a different way, instead of telling you what to do or the best way to do it, it will tell you what to avoid. Sometimes it is better to identify the main drawbacks on a discipline and then isolate them so we have the best results at a certain level of development.
The Holy Grail
Many traders spend years and years trying to find the Holy Grail of trading. That magic indicator or set of indicators, only known by a few traders, that will make them rich in a short period of time.
Fact: Well, there is no magic indicator, nor a set of indicators that will make anyone rich in a short period of time. The main reason of this is because market changes, every single moment is unique. Every Forex trading system will fail from time to time. Our work here is to find a Forex trading system that fits our personality as traders, otherwise the trader will find it hard to follow it.
Looking for Easy Money
Unfortunately most traders are attracted to the Forex market for this reason. Mainly because of the publicity showing or rather trying to show how easy is to trade and make money in the Forex market.
Fact: Yes, it is very easy to trade, anyone can do it. It is as hard as one click. But the second part of it isn't that easy. Making money or achieving consistent profitable results is hard. It requires lots of education, patience, discipline, commitment, and this list could go to infinite. In a few words, it is possible to have consistent profitable results, but definitely it is not easy.
Looking for Excitement
Some other traders are attracted to the Forex market or any other financial market because they think it is exciting to be a trader.
Fact: Yes, it is very exciting to trade the Forex market. But if this is the main reason you are still trading the Forex market, sooner or later you will discover the most expensive adventure you have ever known. Do some thinking on it.
Not Using Money Management
Most traders forget about this important aspect of trading. They think they shouldn't be using money management until they achieve consistent profitable results. They totally forget about the risk side of trading.
Fact: Money management allows your profits to increase geometrically, but also limits your risk on every single trade. Money management tells you how much to risk on each trade. Using money management is a must if you want to achieve your trading goals. By using money management you make sure you are going to be able to trade tomorrow, the next week, month and the following years.
Not Being Psychology Tuned
This is one of the most underestimated subjects when it comes to trading. One of the main principles of financial markets is that the price of each instrument is based on the perception of each individual participant �the crowd.� In other words the price of each instrument is determined by the fear, greed, ego and hope of all traders.
Fact: Being aware of all psychological issues that affect the decisions made by traders will definitely put the odds in your favor.
Lack of Education
Education is the base of knowledge on every discipline. As lawyers and doctors require several years of college until they get their degree, Forex traders also require long years of study. It is better to have someone experienced to guide you through your trading, since some information could take you in the wrong path.
Fact: The market teaches us invaluable lessons on every single trade made. The process of education for a Forex trader could take for ever. That's right, we never stop learning. We should be humble about the markets and our knowledge; otherwise the market will prove us wrong.
These are some of the most important barriers every trader faces when trying to trade successfully.
Trading successfully the Forex markets is no easy task, it requires a lot of hard work to do it right, but with the right education, you will put yourself closer to your trading goals.
More Thoughts On Forex
currency exchange
Ebb and flow of capital between nations, otherwise known as Purchasing Power Parity (PPP) is the central factor that determines market momentum. In addition, fundamental economic forces such as inflation and interest rates are constantly influencing currency prices. Faith in a government�s ability to stand behind its currency will also impact currency price. This is done in two ways: controls and intervention. Controls restrict citizens from doing things, which have a negative effect on the exchange rate (such as sending money abroad). Intervention takes two forms: changing the interest rate on the currency to make it more or less attractive to foreigners, or buying/selling the currency to raise or lower its market value.
currency conversion
The Forex is affected by many factors. These factors usually follow a certain trend so it is important to understand how each factor works in forecasting the Forex. Some are good indicators alone while others should be used together for accurate Forex predications.
More info on Forex trading
forex brokers
USING STOPS
Please always give stop order per your risk profile when you open any new position. Medium-term reversals can be confirmed only in monthly, weekly and daily charts. Chart reading is not to predict the tops or bottoms of any move, but to confirm the change of trend as soon as they are made and adopt right strategies in that new trend. Good trades.
currency exchange rate
The fluctuating oil prices of the past year - 2005 - are a good example of what can happen when factors affect the price and supply of oil. Remember from basic economy courses that higher oil prices act to put the brakes on consumer spending. This will be true as long as the major source of oil for industrialized countries is petroleum based. The price of all goods produced hinges on the price of a barrel of oil. If the oil prices rise, so do production and supply prices for most consumer goods. In addition, the expenses of individual consumers rise as they pay more to fuel their automobiles and heat their homes. The net result is a downward swing in the economy of the country until it hits a rallying point that starts it back on an upward trend.
Global Forex Trading News From Around The World
RBS set to raise extra $24B
Tue, 22 Apr 2008 13:04:32 EDT
Read full story for latest details.
Global Forex Trading | What Is Forex
Labels: Understanding Forex | Forex Trading
