Thursday, August 19, 2010


Below are some expert trading tips for forex traders:
1. An old clich̩ but one which holds great truth РALWAYS trade in the direction of the trend. In the Forex markets we see great trends in currency pairs that last for a long time (cycles). Therefore, it pays to identify the dominant trend of currency pairs. Going against the trend will only cost you a lot of money and destabilise you emotionally.

2. Plan your trade, trade your plan. Trade plans can be made well in advance in the Forex market and help eliminate emotional trading. The more mechanical you become in entering and exiting trades, the more profitable and consistent you will become in the long run.
3. Before initiating any trade, always know your risk and truly accept this risk. The risk is defined as the number of pips from your entry to your stop loss.
4. Always, use a stop loss after initiating a trade. Placing a stop loss does not essentially mean that you are expecting to experience a losing trade but will help minimize losses against unforeseen market circumstances caused by unforeseen events such as terrorist attacks, geopolitical events etc.
5. After initiating a trade, a trader must have clear trade management guidelines for that trade. Trade management means that the trader knows in advance when and where he or she will move the stop loss and when to scale out of part of the trade and eventually where to take profits.
6. Whilst trading Forex, it is imperative for a trader to know the characteristics of the currency pairs he or she likes to trade. A way of achieving this is by looking at the past behaviour of the currency pairs in order to ascertain key characteristics such as: a) how well does the pair trend? b) which economic events influence the pair? c) what is the Average Daily Range of the pair? etc.
7. Always keep in mind that the Forex market presents the trader with a constant stream of opportunities, therefore, if the trader experiences more than 2-3 consecutive losses, stopping to trade for a period of time is advisable. This will give the trader time to refocus and examine mistakes and prepare psychologically to re-enter the market again.
8. Trade to profit and not just to trade. Many traders think that because they might sit in front of a trade station for a period of time it is logical that they should be trading constantly. A trader should only initiate trades once all the odds are stacked in his favour and he has an edge. Then and only then can trade be initiated. Patience and discipline is an integral part of successful and consistent trading and are traits that a trader must endeavour to possess.
9. All successful traders have a trading diary that contains all the trades good or bad they have ever initiated. This gives traders the opportunity to constantly evaluate their performance and rectify any identified mistakes.
10. All successful traders are constantly learning and evolving. Just when you think you know it all about trading, a new curveball gets thrown your way. Furthermore, as time passes by, new methods of making money are developed and need to be learned about.


Steady trading prospects

The market is constantly moving and since Forex trading involves buying and selling of currencies, so traders can easily operate in a rising or falling market. This is because, there are always trading prospects, whether a currency is rising or deteriorating in relation to another currency. So there is always profit potential in the Forex market, whether it’s a rising one or a falling one.

Along with these major advantages, the Forex market also has some other merits such as, Forex trading gives its traders, an opportunity to bigger profits as returns on their invested money. Also, since the market is open 24 hours a day, 5.5 days a week, it gives the investors can make their deals anytime they want to.

With such superior speed of the market, and fine liquidity, even the largest of transactions are conducted within a few seconds. You can study the Advantages and Disadvantages of Forex Trading as well on our website.


High levels of liquidity

Also, acting as a huge attraction is the high liquidity. With almost 90% of all the currency transactions consisting of 7 major currency pairs, helps these currencies display price stability, smooth trends, narrow spreads and high levels of liquidity.

This liquidity mainly comes from the banks which offer cash flow to companies, investors and market players.


24 hour trading

Because of the Forex market deals with countries all over the world. Forex market is open 24 hours a day from 5am on Monday until 6am Saturday(Hong Kong Time).

Investors can arrange the transaction time according to their own habits. This is one of the reasons why so many white-collar workers choose Forex. At the same time, more and more people began to exploit the stock market closed time to trade in foreign exchange, spread its investment risk as an effective channel.

Whatever time of day you trade, we are here to provide support. You can reach our knowledgeable representatives 24 hours a day from Monday morning through to Saturday morning (Hong Kong Time) by phone, email.


Forex is bringing high-profit leverage

Usually when an investor makes a trade, he has a set amount of money in his account, let's say $1000. He then buys stocks or bonds for $1000.

Suppose on the other hand, that this investor took his $1000 and opened a Forex account. Now the game changes. Unlike stocks and bonds, Forex is not regulated by a governing body, meaning there are no limits as to how much leverage can be used. Let's say the investor takes his $1000 in a Forex account and buys one or more currency pairs. The broker will then offer the investor to loan him up to several hundred times the value of the brokers account. This means that the investor can leverage his account 100:1, 200:1 even up to 400:1. This essentially means, that for an initial deposit of $1000, he can now trade for $100,000 and even more.

How's that for leverage? It's easy to see why Forex trading is so tempting. You can never lose more than the money in your account though. That means you get all the opportunity for leveraged profits, but only risk losing the unleveraged amount in your account.


Largest market in Worldwide!

The foreign exchange market is the largest and most liquid financial market in the world.Traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. Since then, the market has continued to grow. According to Euro money's annual FX Poll, volumes grew a further 41% between 2007 and 2008.

Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%.In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.


Is it that simple?

More precisely, FOREX is a currency trading market, and it is one of the largest and most rapidly developing markets on the planet. Over 2.5 trillion dollars are turned over on the forex every single day.That is more than 100 times the amount turned over daily on the NASDAQ. If you are intrigued.

So, what is a market? Simple: it's a place where goods are traded. The forex is no different, but with one little twist: the goods traded on the forex are national currencies. For example, on the forex you might pay in American dollars and buy some Canadian dollars. Or, you could sell your euros for Japanese yen. There is nothing more to it than that.

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