Posts Tagged ‘Trader’

Risk Management

Saturday, April 30th, 2011

Risk Management can make the difference between your survival and your “death” in Forex trading. You can have the best trading system in the world and still lose money without a proper risk management. The risk management is a combination of several ideas so that you can control the risk of your trades. It can limit your trading volume, can force you to make headging, can force you to trade only during some specific hours of a trading day, etc. And most important to know when to accept the losses.

Why is Risk Management Important?

Risk management is one of the key concept of Forex trading. It is a very simple concept to understand by traders, but is extremely difficult to apply. Forex brokers love to talk about the benefits of the leverage, and forget to talk about the down sides. This is making traders believe that they need to take big risks and target huge profits. It seems very easy for thous who have done it on a demo account, but once real money are at stake emotions comes in to play and things change totally. This is the part where a good risk management is very important.

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Five ways how technical analysis can fail

Tuesday, April 26th, 2011

Technical analysis is truly unique. In less then 1 second the trader can see a very significant quantity of information related to price movement of one currency. The lines of moving average can show you the trend. Candlesticks show you the correlation between the opening price and the closing price. Bollinger bands gives you price target and shows you the volatility level of a currency pair. Oscillators like MACD offer entry point signals and exit point signlas. All this informations are provided instantly, but technical analysis is not necessarily the best invention ever.

Bellow are shown 5 ways in which technical analysis shows it’s imperfection. This unpredictable events can cause currency pairs to move unpredictable for a couple of hours or a couple of days, in some cases even for a few months.

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Trend Analysis

Wednesday, April 20th, 2011

Understanding Trend Analysis

Bellow are a few methods that you can use to analyse the trends and how you can use them on charts.

~What are trends and different types of trends

~Who to draw a trend line

~Trend movements and trend channels

~Support and resistance levels of trends and how to identify them

1. Trends

The trends are use to determine the relative direction of a price in the market. There are 3 types of trends: bullish trends (upward trend), bearish trend (downward trend), sideways trend (neutral trend). Without a trend the prices stay flat and unchanged. For the trades to be profitable there must be a movement in price value, or there must be a trend. The forex market, a market with a lot of trends, has a lot of explosive price movement in a short period of time, which can create significant income opportunity. There is a saying: “The trend is your friend“, never forget this when you are tranding.

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Why forex brokers offer Leverage

Friday, March 5th, 2010

Forex brokers earn from the spread, the difference between the buying and the selling price of a currency pair at one moment. They are happy to offer leverage because the higher the volume of a trade is the valuable are the pips in the spread.

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When and how to start trading?

Thursday, March 4th, 2010

Before you start trading the forex market, there are a couple of questions that need to be answered. How to chose a boker? Should I use a demo account? What do I need to know before I make my first trade? Let’s talk about this things.

1. Choosing a broker

This is a personal decision for every trader. Some forex brokers offer different options and different benefits that can be very attractive for some traders while at the same time other traders may consider them useless. It is very important that you compare and analyze carefully every forex brokers options and to chose the one that you feel comfortable with.

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Three Frequent Mistakes

Wednesday, February 24th, 2010

When you start trading on the forex market there are a couple of mistakes that you must avoid. Below are the most common mistakes that occur in forex trading.

1. To much leverage

One of the best advantages of the forex trading is the posibility of using the leverage. One of the most common mistake the trades do is that they use to much leverage. Using to much leverage means that you make a big transaction when you have to little money in the account. If the market moves a little against your position that could result in a big loss for you.

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Forex Scams

Sunday, February 21st, 2010

Popular Forex Scams

Forex scams can have many forms. Some of them can seem very convincing and legal. They all have in common the fact the traders are looking for that magic formula that can make them profits. Unfortunately, there are no easy answers. Below is a short list of the most common forex scams.

1. Signals sellers

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