Understanding and applying the prevailing market analysis will greatly assist you pick out the major trades daily. Forex trading requires some level of sophistication and access to vital market information. Banks and major trading organizations publishes research papers, commentary and market outlook daily to guide traders. Studying this information carefully before trading will help you prepare for the major market move and trend for the day. Also, reading independent forex research documents daily over several years will mould you into a well informed and better professional in the market. This could arise because of the fact that some events are reoccurring which could simply translate that you should do what you have been doing initially during such event occurrence.
Websites are tools through which forex oriented organizations and banks publish information and commentary that could guide you on trading forex daily. Though the data published may be boring and uninteresting at the initial time, but after several weeks of constantly forcing and tuning your mind to study them, you will start understanding how important these researches are.
There is no major move in the market that was not mentioned by a forex research organization before it happened. Depending on too many websites that publish forex information can make the whole process tiresome and very slow.
I advice you use website www.actionforex.com for all your forex research updates and events. It is the best website for fast updated forex research information. Although. I also use www.dailyfx.com to check on the day’s major market news as theirs is more straightforward.
For more information on forex trading visit http://www.forexonlineinseconds.blogspot.com
Saturday, June 14, 2008
Sunday, June 1, 2008
Coping with forex trading risk by Agwu Chukwuemeka O.
The forex trading with $1.3 trillion market is larger than every other market combined. Forex trading is available to everybody to trade with the same risk and reward. Movement of market in forex can be quickly or sharp in negative or positive direction. You can manage your risk by understanding how this unique market works and what drives it up and down. It will interest you to know that forex market carries higher risk than any other market.
The market movement can fluctuate for reasons out of our control and unforeseeable including changes in political and economic policies. These unpredictable situations are what drives the value of the currencies up and down, thereby changing their values in respect to other currencies. It is this very volatility that attracts investors. It is necessary that you understand all your buying and selling options so that you appropriately react to these currency fluctuations immediately.
Be determined to manage trades without emotion as it can help you manage your risk. Map out the percentage you are willing to risk on each trade and stick with it. When you have multiple trade open, it’s important to stay on top of the percentage that you have at risk because multiple losses can be devastating and one big loss can wipe out all your other profits.
If your trading platform provides the ability to set stop losses, you should determine your stop loss at the time you enter a trade and set it. When your stop loss is reached, your trade will automatically be closed limiting your potential loss.
It is important to take the volatility of the market into account when determining your stop loss amount. If you set it too large, you could lose a significant amount of money before the stop loss is triggered. If you set it too small, the random ups and downs in the market will mean that your position is being closed early incurring additional transaction costs.
Avoid currencies that are closely related. It is a smart risk management strategy to avoid trading two currencies that tend to move together like the British pound and the Euro. These currencies are correlated. The most common pairing is the US dollar and the Euro.
You should avoid taking a long and short position in currencies which generally move in opposite directions. You are taking more risk than you need to do.
Finally, don’t gamble. If you’ve lost money on your previous few trades, don’t double-up your next trade in order to recoup your previous losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
The market movement can fluctuate for reasons out of our control and unforeseeable including changes in political and economic policies. These unpredictable situations are what drives the value of the currencies up and down, thereby changing their values in respect to other currencies. It is this very volatility that attracts investors. It is necessary that you understand all your buying and selling options so that you appropriately react to these currency fluctuations immediately.
Be determined to manage trades without emotion as it can help you manage your risk. Map out the percentage you are willing to risk on each trade and stick with it. When you have multiple trade open, it’s important to stay on top of the percentage that you have at risk because multiple losses can be devastating and one big loss can wipe out all your other profits.
If your trading platform provides the ability to set stop losses, you should determine your stop loss at the time you enter a trade and set it. When your stop loss is reached, your trade will automatically be closed limiting your potential loss.
It is important to take the volatility of the market into account when determining your stop loss amount. If you set it too large, you could lose a significant amount of money before the stop loss is triggered. If you set it too small, the random ups and downs in the market will mean that your position is being closed early incurring additional transaction costs.
Avoid currencies that are closely related. It is a smart risk management strategy to avoid trading two currencies that tend to move together like the British pound and the Euro. These currencies are correlated. The most common pairing is the US dollar and the Euro.
You should avoid taking a long and short position in currencies which generally move in opposite directions. You are taking more risk than you need to do.
Finally, don’t gamble. If you’ve lost money on your previous few trades, don’t double-up your next trade in order to recoup your previous losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
Forex fundamental information release and currencies to be focused by Agwu Chukwuemeka O.
In forex trading, economic date tends to be one of the most important catalyst for short term movements in any market, this is particularly true because it responds not only to US economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to decide the positions the take. Generally, no less than seven piece of data are released daily from the eight major currencies or countries that are most closely followed. So far those who choose to trade news, there are plenty of opportunities. We can check which economic news releases is released when, which is the most relevant to forex traders and how traders can act on this market-moving data. The following are the major eight currencies that should be our focus:-
US dollars (USD)
British Pounds (GBP)
Euro (EUR)
Japanese Yan (JPY)
Swiss Fran (CHF)
Canadian dollar (CAD)
Australian dollar (AUD)
New Zealand dollar (NRD)
We can deduct from the list, that the currencies that we can easily trade span the entire globe. This means that you can handpick the currencies and economic releases to which you pay particular attention. But, as a general rule, since US dollar is on the “other side” of 90% of all currency trades, US economic releases tend to have the most pronounced impart on the market.
Trading news is harder that it may sound, but some releases are more important than the others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data being released at the same time.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
US dollars (USD)
British Pounds (GBP)
Euro (EUR)
Japanese Yan (JPY)
Swiss Fran (CHF)
Canadian dollar (CAD)
Australian dollar (AUD)
New Zealand dollar (NRD)
We can deduct from the list, that the currencies that we can easily trade span the entire globe. This means that you can handpick the currencies and economic releases to which you pay particular attention. But, as a general rule, since US dollar is on the “other side” of 90% of all currency trades, US economic releases tend to have the most pronounced impart on the market.
Trading news is harder that it may sound, but some releases are more important than the others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data being released at the same time.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
Forex Leverage: A double – edged sword by Agwu Chukwuemeka O.
Forex leverage could be described as the needed amount of money given to you by your trading platform or broker to enable you participate in forex trading with little commission. This money is given to you to boost the amount of money you trade with in the market These leverages is what makes most traders attracted to trading forex.
But forex leverage is a double edged sword because in as much as it can help you make more profit, it can also cause huge losses. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up and control a huge amount of money. To get the value of margin based leverage, divide the total transaction value by the amount of margin you are required to put up.
Margin-based leverage = (Total value of transaction)/(Margin required)
It is also advisable to use 1:100 leverage in forex trading to avoid higher risk. If you are required to deposit 1% of the total transaction value as margin and you intend one mini lot of USD/CHF which is equivalent to US$10,000 the margin required would be US$100. Thus, your margin-based leverage will be 100:1 (10,000:100).
Margin-based leverage in ratio Meaning
1:400 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 400 lot
1:200 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 200 lot
1:100 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 100 lot
You can make decent profits and losses during trading when you monitor currency movements in pips which is magnified through the use of leverage. When you trade with a big amount by using higher leverage, a small in the price of currency can result in significant profits or losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
But forex leverage is a double edged sword because in as much as it can help you make more profit, it can also cause huge losses. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up and control a huge amount of money. To get the value of margin based leverage, divide the total transaction value by the amount of margin you are required to put up.
Margin-based leverage = (Total value of transaction)/(Margin required)
It is also advisable to use 1:100 leverage in forex trading to avoid higher risk. If you are required to deposit 1% of the total transaction value as margin and you intend one mini lot of USD/CHF which is equivalent to US$10,000 the margin required would be US$100. Thus, your margin-based leverage will be 100:1 (10,000:100).
Margin-based leverage in ratio Meaning
1:400 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 400 lot
1:200 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 200 lot
1:100 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 100 lot
You can make decent profits and losses during trading when you monitor currency movements in pips which is magnified through the use of leverage. When you trade with a big amount by using higher leverage, a small in the price of currency can result in significant profits or losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
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