• Get Started

    • Month: November 2016

    Online Forex Trading – Be Realistic

    Starting out in Forex trade is never an easy thing. With the promise of high investment returns, a lot of people are easily enticed to venture in currency trade without having second thoughts. After all, who would not want to double or to triple their money? For some, this might appear as the easiest way to financial liberation. Forex trade can definitely make it possible for you to earn more.

    When you come across Forex trading websites, almost all would promise you converting your money into millions in just a short span of time. Some online advertisements would even beguile you to finally quit your job and to just focus on Forex trade. Can you really make it big overnight?

    Why Set Realistic Expectations?

    The answer is both a yes and a no. Forex trading is definitely worth your effort especially when you already possess the right mindset and you use effective trading strategies. But the promise of earning thousands or even millions overnight is just impossible and even dangerous.

    When you finally set to venture in currency trade, setting realistic expectations is the initial step. Success in this kind of business all starts with knowing what to actually expect. Since there are different market forces that can, directly and indirectly, impact currency trade, you can never be 100% sure.

    Always keep in mind that any investment involves a certain level of risks. It is basically the same thing when it comes to Forex trade. Without a doubt, you can earn a huge sum. But on the other side, you can also incur losses. Once you come out thinking that you can have all the economic gains by just buying and selling currencies, you are doomed to fail.

    Remember that just like in kind of investment venture, you need to be realistic to make your goals achievable and feasible. Your attitude and mindset towards Forex trading certainly affect your trading decisions.

    Calculating Risks in Forex

    Instilling impossible expectations towards Forex profitability can negatively affect your trading choices. For one, traders who have high and impractical expectations might end up gambling their money without even thinking about the risks.

    The tendency is that some would easily want to get high profits in an instant. There are even traders who would trade currencies every day thinking that by doing so, they can earn more. With Forex trade being a highly volatile business venture, you can never afford to trade without even calculating the risks and without any Forex knowledge. Doing so will not only lead to disappointment but to high losses as well.

    If you really want to make it in this kind of business, you need to have patience. You have to set realistic expectations so that you can carefully plan your trading strategies.

    Study the currency market, gather the price data along with the significant indicators and create your trading plan. These are the things that you should keep in mind if you really want to be successful in Forex.

    The expectation of earning huge amount in an instant might seem appealing at first. But in the long run, you need to understand the fact that success takes quite some time. With Forex, patience is definitely a virtue. You need to know when to use your bullets to your advantage. In that way, you can avoid incurring losses and you get to earn high profits.

    The Winning Traits of a Forex Trader

    In the world of Forex trading, the most successful traits a trader may have has nothing to do about who gets to play the good or bad guy. Rather, it’s all about the traits that increase your tendencies to make wise – or unwise – moves.

    Cut Your Losses Early

    Traders hear this very sage advice all this time, but most ignore it – to their everlasting regret. Hope is a powerful motivator. And it’s always good to be optimistic. However, you have to be careful about choosing what to be hopeful for. Cutting your losses early does not mean you’re quitting. It simply means it’s time to move on and try another currency pair. It really is that simple.

    Don’t Fix What’s Not Broken

    It is a cliche, but that doesn’t stop it from being true. In fact, ignoring cliched advice is a quintessential example of how people insist on leaving the path to success in order to take a wrong turn. Why put a stop to an account that’s doing well? Although there’s a chance for trading pairs that are doing so good to plummet and suffer a huge drop in their rates, these things rarely happen without any noticeable signs. In most cases, you will have enough clues to warn you and fall back to Trait #1: cutting your losses early.

    Know the Right Time To Trade

    Some people just like being the exceptions to the rule for the sake of it. However, that kind of attitude is dangerous for a Forex trader to adopt. More often than not, it will lead to heavy trading losses, enough to break the bank for good.

    Timing is everything in Forex trading. You may like to think it as a subjective factor, but studies show that timing is actually objective. Numerous experts have proven with their case studies that the best time to trade in the Forex market is between 7PM to 11AM in UK time, which in Eastern Time will be around 2PM to 6AM. However, with IMMFX you can trade 24h around the day from Monday to Friday.

    Know The Best Times To Use Trading Breakouts Versus Range Trading

    Rather than letting mere instinct to be your guide, there’s a surer way of determining which of these two essential trading strategies is best to use.

    1. Range trading is best to use during active hours as your strategies are given sufficient time to work.
    2. Trading breakouts are best to use during volatile hours as they can take advantage of the extreme changes that currency pairs will undergo.

    Make Use of An Effective Leverage

    How much leverage you allow yourself to use will always have a considerable impact on your trading strategies and its eventual outcomes. There are many different formulas you can use to compute how much leverage you can afford to use [ Read: Understanding Margin in Forex Trading ], but at the end of the day, the factors listed below will prove most important.

    1. Keep it conservative.
    2. Always apply a stop-loss point to your strategy.
    3. Risk tolerance levels do not have to be proportionate with leverage.

     

    There are always exceptions to the rule, and those are simply an inevitable part of the game. Even if things do not go your way, the above traits will serve to minimize your losses and increase your winnings.

    Understanding Margin in Forex Trading

    Comparing to other investment, the Foreign Exchange margin trading is one of the fairest and the most attractive investment method. Forex Trading on margin is nothing but taking a short-term loan from your forex broker.

    What Is Forex Margin Trading?

    In Forex, the margin trading means that the traders borrow loan from bank, finance organization or broker house to carry on the foreign currency trading. Generally, the financing proportion is above 1000 times, which means the Forex traders fund may enlarge to 1000 times to carry on the trading.

    The bigger the financing proportion means the Forex traders just need to pay very less fund. For example, the financing proportion provided by the IMMFX is 1000 times, namely the lowest margin request is 0.10%, the traders just need to pay 10 US dollars, then he or she could trade as high as 10,000 US dollars, fully using the contract method to make big profit by only paying a very less price.

    Basically, you are providing just 0.10% of your trading capital, the remaining 99.9% is provided by IMMFX.

    Making Profit in Forex with Margin Trading

    The currency fluctuates continuously due to reasons such as political, economical reasons, sometimes the changes could be extremely great, therefore, the Forex traders also can have the opportunity in among which makes a profit.

    For example, the Japanese Yen daily fluctuation is probably between 0.7% to 1.5%, Forex traders may make the profit through buying and selling. All trading could be completed in a short time, the trading strategy could carry up according to the market conditions, it is extremely flexible, even if the direction looks wrong, the loss could be stopped immediately, the loss could reduce but profit potential is still great. Therefore, the Foreign Exchange margin trading is the most flexible and the most reliable investment method.

    Besides the fund enlargement, another attraction of the Forex margin trading method is that it can be traded in both ways, you can make profit by buying the currency when the currency rises (long-buying), or to sell a currency when the currency is dropping to make profit (short-selling), thus does not need to be restricted by the restriction so-called bear market is unable to make money.

    Margin Calculation

    You must calculate the margin required as a percentage of the lot value. If your account is denominated in USD, the margin required per transaction is calculated in USD. For example, retail forex brokers always quote currency pair such as EUR/USD (i.e. EUR in terms of USD). If the EUR/USD is trading at 1.2500, that is one Euro is worth 1.2500 US Dollars, and you want to buy 10,000 Euros or 10K, you would sell 12,500 USD to get those 10,000 Euros. Basically, with a leverage of 1:5000, your margin required will be 0.2% of $12,500 which equals $25 only.

    What does trading on margin provide me?

    Forex Trading on margin lets you to significantly leverage your funds and potentially create strong profits compared to your capital.

    However, Forex margin trading also involves a high rate of risk. A minor price movement can outcome in a considerable loss of funds. Although high leverage involves high risk, there are features added in the IMMFX trading platform that can benefit decreasing the amount you might lose in trading.

    The IMMFX Trading Platform automatically calculates margin requirements and confirms available funds before executing a new trade position. If the account equity, the total floating value to the market, as defined below ever falls below the minimum margin requirement a Margin Call will be issued and all positions will be automatically closed.

    What are the margin requirements for IMMFX?

    You are allowed to select the margin level qualified to your account, down to a minimum margin requirement of 0.1% or 0.2% (or a maximum leverage of 1000:1 or 500:1) following your trading conditions or capital. This equates to the least margin of $100 or $200 for each lot, which represents 100,000 units of the first or “base” currency being traded.

    How do I change my margin level?

    Please note that you can change leverage on Currency Pairs + Metals at any time from your BackOffice (www.my.IMMFX.com) page and by clicking on ‘Change Margin’ within the forms section.