The guy sitting next to you at work making all that money trading currency does not have a special Forex crystal ball. What he is doing to ensure continued profits in his trades is reading indicators and then basing his currency trading moves on them. Once you adopt this practice, how to increase your Forex trading account will no longer seem like such a mystery.
What are Indicators?
Trading currency requires knowing when to buy and when to sell and the sooner the better. This requires studying charts to see how the pair you are trading moves under current circumstances. These movements are known as indicators, and once you master them you will become that same Forex fortune teller as the guy in the next cubicle.
Identifying the Type of Market
When looking at a chart, the first thing you are going to want to pick out is the type of market you are dealing with. This will help you in determining the type of indicator you are going to use. A trending market is when the price of the currency is moving steadily, either higher or lower. These can be seen by long lines heading in one direction. Ranging markets are noted by strong resistance and support levels, where even with sharp fluctuations the currency is not breaking through.
Continue reading "Growing Profits in Forex Trading By Using Indicators"
Would you consider taking out a $50,000 loan against your home in order to finance a gambling trip to Las Vegas? Of course not, and yet when you leverage your Forex trades that is essentially what you are doing; borrowing money at a risk that you won’t be able to afford to pay it back.
What Does Leveraging Your Trade Mean?
On the surface, leveraging looks like a good idea. Most brokers will allow you to borrow from them to make a trade, usually with a small percentage down. Let’s say yours will require 1%. This means that for every $1,000 in your account, you potentially could trade with $10,000. Leverage has nothing to do with changing your chances of a successful trade, it just means you are able to invest more into it then what is in your Forex account.
How Can Leverage Help?
Forex trading is measured in pips, which are actually fractions of a cent. In some cases, a gain of 100 pips may only equal one dollar. Continue reading "Letting Go of Your Leverage: Why Slow and Steady Works Better With FX Trading"
The most important structural part of a house is usually unseen. If the foundation of a house is cracked, not level, or deteriorating, the home is no longer safe. The family living inside is at danger and the first priority of the owner should be to get the foundation fixed.
Many have a vague plan for Investing, but do not have a solid, non-negotiable trading system in place. Your trading system covers everything from your tools and entry strategy to your risk management. It answers every question before it needs to be asked.
In Forex trading, the market can be brutal. It is commonly stated that 95 or more percent of traders lose in the Forex Market which speaks to the difficulty of trading it. That is why it is essential to build a personal and successful Forex Trading System.
There are many aspects to a successful system, but today I want to focus the importance of Trade Management.
Before I jump into the details, though, I want to hit on the importance of a good entry strategy so that you have something to use your Trade Management with. Continue reading "Do you have a Forex trading plan?"