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    • Month: April 2017

    7 Steps to Limit Risks in Forex Trading

    Natural and technical disasters are not uncommon when you trade from home. Computer failure, electricity cut off, hurricane, u an expected visit from a neighbor, health issues and other factors can lead to loss of money if you aren’t careful. What should be done if your positions are open and your trading platform fails? What is the way to limit your risk from all possible disastrous scenarios? Do you have a trading plan for an unforeseen set back?

    We are all familiar with a term backup. Most of the work done on the computer can be copied and saved on home server, CDs, USB drive and other memory devices. This gives you an ability to restore your work from a backup copy if the original is gone by accident, technical failure, software bugs, computer virus and other misfortune. What about forex trading? How can you back up your trades? What if there is an online system failure with the forex broker?

    Below is the list of things you can do to secure your forex trading:

    # Store your brokers’ phone numbers on a speed dial or somewhere within reach.

    # Buy another computer/laptop with a serviceable battery. Copy the trading data and the software. The laptop battery will last at least 6 hours. In case your main computer fail or electricity goes off, the backup laptop is ready to go.

    # Back up the internet connection with, for example, the internet 3G card. Having two computers does not provide you enough security if they share the same DSL connection, right? Speaking of doubling up, have two internet routers! In case one of the internet connection/router goes down, all you have to do is connect the cable and you are ready to trade again.

    # Place a firm stop-loss as soon as you place the trading order.

    # Install mobile trading platform on your phone and have price alerts sent to you.

    # It is advisable not to use your trading computer for personal surfing, especially during working hours. You will understand what I am talking about here when a virus attacks your PC!

    # Having another funded account could be a good idea. That way if your main broker account experience any access issues, you can trade your positions on the second forex account.

    One of the winner principals of forex trading is that if you are not planning to succeed, you have already planned to fail. Computers are the part of online forex trading, whether you like it or not. Failure comes as an unexpected and fatal disease. Do not relay 100% on your computer or the software since there is no such thing as a perfect machine. Failures happen and usually when it happens you not only lose some text – you lose it all along with the opportunity to close the open positions or enter a profitable trade on time.

    It is your responsibility to adopt a professional way of dealing with failures. Your backup technique turns you into a professional forex trader who frowns for a spit second and moves on to plan B without loss or pain.

    5 Interesting Forex Trading Facts Explained

    Each and every single trade you make connects and involves quite a number of things. Knowing what exactly happens behind the scenes, what makes the market act the way it does and how everything is interconnected is beneficial to any kind of a trader.

    How much to Risk?

    First of all, you have to figure out how much of the deposited account balance you are willing to risk for each trade. You have to pay attention to the following factors:

    Focus on the money management, and by that I mean focus on managing your losses. Successful traders do not win every trade since it is statistically impossible. Your winning percentage is between 50%-70%, meaning that you will have a lost trade up to 50% of the time.

    If you want to be successful, avoid risking more than 2% of your account funds on any one trade.

    Do not use leverage higher than 1:200 because that is a suicide mission.

    What to Expect?

    There is no Focus-Pocus. You will have to work hard to make a decent profit and it may take at least half a year.

    Do not expect to make tones of profits with a deposit of $100. Treat mini/micro accounts as a transition state from demo trading to real live trading.

    Never trade money you cannot lose. In fact, I suggest having at least $2,000 available. This money should not make you twitch and fall into coma in case all of it is lost. Treat the money you will lose in the beginning as a learning fee. Practice makes perfect –remember that!

    How much to Learn?

    If you are a complete newbie, do not open a live account until you learn the basics and practice with the demo account. Trading education may take up to 6 months, depending on how serious you are and how much time you invest in learning.

    Technical analysis should be your best friend. Study everything there is to it and you will understand the market better. If you choose to trade news, be aware that most traders choose not to (after rather nasty experiences!)

    Is Forex Easy?

    If you expect to find a golden fish to make your 3 wishes come true, you are barking at the wrong tree. Forex trading is difficult. Period. It was never easy. It didn’t get any easier today. It is not going to be easy in the near future.

    If you feel like being seduced by automated software or magic strategies from so-called gurus for just $199, which promise to solve all your problems (including mortgage on the house and college tuition) and make you millions in weeks without any knowledge of trading – RUN away from the computer and don’t come back until you take a cold shower and realize that there is no easy money, especially not in forex.

    Which Currency to Trade?

    Most frequently traded currencies are U.S. Dollar (USD), the Euro (EUR), the Australian Dollar (AUD), the Japanese Yen (JPY), the Canadian Dollar (CAD), the British Pound (GPB), and the Swiss Franc (CHF). 90% of all transactions in forex market involve US Dollar.

    Despite the fact that the whole world is connected in forex trading, the main trading centers are
    New York, London, Sydney, Tokyo, and Frankfurt; while the countries whose economic news you should follow closely are the United Kingdom, the United States, and Japan.

    Developing a Forex Trading Strategy

    Most traders start out with high hopes and dreams of quick wealth, but this becomes tempered along the way. Expectations are usually adjusted as a trader develops a strategy and gains experience. Here are few ideas traders may want to consider or reconsider when developing or rethinking a trading strategy:

    Listen to Everyone, but Trust Yourself

    Always a good idea to learn from others, but at the end of the day, the individual trader must believe in his own method. As long as a trader is constantly refreshing and updating his or her information as well as the sources then they will eventually figure it all out. Each of us brings something to the table, and have our own edge. We only need to recognize it, develop it, nurture it, and believe in it. Combine this with constant research, testing, evaluation, and analysis. Not every strategy fundamental or technical will work or work for us. Trading is always more art than science.

    Follow your Mentors and Heroes

    Have one, two or several. Legendary investor Warren Buffet looked up to Benjamin Graham, who enjoys godlike status as a value investor. Peter Lynch of Fidelity looked up to both and learned all he could about them. This formed the foundation of his philosophy and laid the groundwork for millions of equities investors, as well professional fund managers. Timothy Morge of Blackstone Capital was mentored by legendary trader Bruce Kovner. Bottom line; It pays to have teachers and role models.

    Some people cannot fathom or tolerate being in the apprentice role. Often, their egos aren’t able to withstand directions from others. The dynamic Ray Kroc had a healthy ego, be he was more than willing. The founder of McDonald’s said he always hired those who were smarter than himself. These were people whom he could look up to, respect, admire, and learn from. It saved him time and grief, and he gained valuable insights into the food business, which he eventually revolutionized.

    Mind over matter…but mind BEFORE matter too

    Too much analysis may lead to paralysis, but too little leads to ruin. Traders must do their homework before they go to market. Too often, traders don’t see all the ramifications of their strategies and methods until it is too late.

    Keep Your Daily Routine

    The amount of time that can be dedicated to trading will likely determine what kind of strategy a trader will employ. Those with limited time each day will not become intra-day traders. They will likely focus on longer term trades, while those who have time to watch charts will generally want to trade as they are doing it.

    Comfort Level

    A strategy must match not only the level of capital a trader possesses but also what method of trading they are most comfortable with. While it does help to reach beyond our personal level of comfort and push the envelope on occasion, it is not something we want to do on a regular basis. Trading is one of the most stressful activities one can engage in, and if we are doing it on a daily basis, we need to find the strategy most compatible with our nature.

    Risk Capital

    The amount we can afford to risk trading should always be an amount we can afford to lose. In some ways, a trader is like a soldier who has a rifle but is only issued a limited amount of bullets. Lesson to traders; use your ammo wisely and make every shot count. A very wise and experienced trader at an investment bank in New York once said to me, “It’s OK to miss a trade. Not OK to mess a trade.”

    Trade Objectives

    If the trading strategy is the road map, the objectives are the destination. Got to know where we are going before determining the best way to get there. What are the monetary goals? Are they realistic? Is our trading method objective and does it conform to current market conditions? How long will it realistically take to achieve our goals? What kind of reasonable return on our capital investment can we expect? Are we patient enough for a particular strategy? Should we set daily or weekly profit and/or pip targets? Many traders-even intraday or swing traders will not set short-term goals. They look towards months or quarters. This is done to avoid undue pressure and stress which might cause trading errors or overtrading.

    Test and Application

    There are literally thousands of strategies for trading. Most don’t work over the long term and are merely snapshots of the times they did. The only way to know is by testing and evaluation. Of course, we cannot evaluate all of them, but we can weed out the most obvious “no go” strategies. These are the ones that do not conform to realistic expectations about ourselves or the markets. The old expression “if it’s too good to be true, then it probably is,” applies.

    Don’t Marry Trades

    At the end of the trading day, session, or after a trade has closed in profit or as a result of stop loss, walk away. Mentally, and especially emotionally. You don’t want to take it to bed with you. There’s always another trade and another day to trade. Indeed, the ability to walk away and focus on the next task or trade will enhance our edge in the markets.

    Keep Track

    Many traders write down all of their trades or what their thoughts, strategies, and objectives were. Some will use Excel spreadsheets to record detailed data for each trade, while scalpers generally will not. For most traders, it’s a good idea to keep a journal rather than a log book, either old fashioned pen, and paper, or electronic. Ideas and knowledge often come from the strangest places, and at the most inconvenient times, and it is always helpful to have something to refer to.

    Forex Trading and The Concept Of Money Management

    Most of the people believe that money management is not a big issue when it comes to trading forex professionally in the currency market. But what they do not know is that money management can help you rise to great heights in the field of currency trading. I have seen hundreds of people fail in their forex trading initiatives just because they did not understand the importance of money management.This article is aimed at discussing some of the strategies involved in managing money while trading in the currency market.

    This article is aimed at discussing some of the strategies involved in managing money while trading in the currency market.

    What comes under the purview of Money Management?

    The first and the foremost strategy is to understanding what comes under the purview of money management. Money management involves taking decisions regarding the amount of money that you are going to invest in the market so that your investment is at minimal risk. It is said that the worst way to invest in the currency market is to invest all your money in a single trade and then end up losing all of it.

    Money management impacts your Earnings

    Money management greatly impacts the way your earnings improve in the currency market. This is due to the fact that by using a sound money management strategy you are minimizing your risk and also ensuring that your losses are not eating into your invested capital. One of the aspects of good money management is keeping a record of all the trades that you have made. This can help you keep an account of the money that you have made or lost in the market.

    Not leveraging a trade by a factor of more than Ten

    One of the best money management strategy involves not leveraging a trade by a factor of more than ten. This means that the maximum amount of leverage that you can have for a single transaction in the currency market is 10:1. What this would do is ensure that you do not lose a lot of money if the trade goes bad. Another great method of managing your bankroll is by taking into account the amount of risk that you are taking. You should try to keep your risky investments low and less risky investments more. This would help you earn more profit.

    Conclusion

    These are some of the strategies that can be used to effectively manage you bankroll while trading in the currency market. Money management is very vital to success in the currency market, and those who understand this are bound to achieve their goals quickly and easily in the forex market.

    Understanding U.S. Non Farm Payroll (NFP) and the Market

    NFP measures the net number of non-farm jobs (as well as subtracting government or non-profit employees) added or subtracted in the U.S. during the prior month. Since most currencies and commodities are tied to the USD and the U.S. economy, the effect of this particular economic news has a greater impact than just about anything else other than central bank interventions, interest rate changes, natural disasters or wars.

    Indeed, bank interventions in the market are often directly related to this particular piece of news since it reflects a wide variety of economic factors including consumption, the potential for future inflation, economic growth or contractions. The Federal Reserve, in particular, relies on the NFP to gauge the effectiveness of their own monetary policies. NFP is key to this decision-making process of the FOMC and the ripple effect of any wide variations in upcoming reports could alter the interest rate landscape rather quickly.

    Importance of NFP Release

    The significance of NFP is measured far beyond financial markets. Political and fiscal policies throughout the world are promulgated as a result of NFP results as it’s believed to be one of the more accurate barometers or snapshots of current economic conditions, and of the efficacy of fiscal and monetary activities.

    To Trade or Not to Trade NFP Release

    To trade or not to trade, that is the question. Many traders will step aside on the same day that NFP is announced since much movement can be attributed to the additional liquidity in the markets, and not to any confluence of direction or sentiment…at least most of the time. NFP has a tendency especially as the news comes on the first Friday of each month to confirm trends, and potentially make overreaching into oversold and overbought levels more probable.  Divergences from NFP expectations can set the tone for the rest of the month and beyond. Moreover, NFP plays a huge role in the direction of bond and equity markets, as well as the price of oil, gold, silver and practically all other commodities, due to demand implications. Traders note the following:

    Scalper’s delight, swing traders fright

    Whether they are trading through automated EAs or manually, this is “game day” for scalpers. The resultant volatility can provide enormous profits and opportunities especially for those who are less risk averse. The duration of scalped trades can be even shorter during NFP since the ranges expand well beyond average.

    The downside, of course, is that traders can pick the right direction or trend based upon NFP, but get stopped out or worse, from price spikes. NFP tends to send U.S. denominated instruments higher when NFP is positive or exceeds expectations. Negative reports can have an even greater effect.

    Swing traders and others with longer term perspectives often find their stress levels and blood pressure increase substantially during NFP news day. Even when they’ve left wiggle room for their trades, adjusted or readjusted their stops so their trades don’t get closed from market swings, they may question the impetus and validity behind their trades if NFP pitches a curve ball to the markets.

    Bend or trend

    NFP is one of the prescient fundamental indicators that even the most technical of analysts and/or traders pay homage to. Often, NFP creates a circular motion in the currency markets where prices react to, and then resume their original direction, though juiced with additional momentum. NFP is a great trend confirmation signal as well as a reversal engine. For intraday traders, timing becomes crucial as NFP can alter the landscape often without reason.

    It’s always wise to remember the maxim of economist John Maynard Keynes who said that the “markets can remain irrational longer than traders can remain solvent.” NFP has a distinct tendency to prove that to traders who are not able to bend with the market. Insufficient capital, tight stops, and/or loose money management (essentially, too much risk) can magnify this outcome for traders.

    Agitate or consolidate

    NFP is a primary market mover and it’s a catalyst for institutional traders to move into markets and/or readjust prior positions. Often, NFP extends the range of markets to a wider price area. Traders need to be cognizant of price action that can reverse rapidly after reaching the outer limits of the extended range, rather than continuing on what can appear to be a breakout.  NFP is the mother of many a false signal.

    Stops and Targets

    The art of setting a stop gets even more complicated and problematic during NFP news day. Even the most logical areas or levels for stops can become “killing fields” for trades. Some traders will wait at least 30 minutes after NFP, before considering entries. Others will wait until New York equities markets are in full swing before trading. It’s very difficult to judge sentiment in the immediate aftermath of NFP, and some of the best traders will simply not trade on this day, or if they are in a trade, will only close it if there is a real and considerable contradiction with their overall strategy. These traders might also adjust their TP (take profit, limit or target) further out as NFP confirms a trend and enhances traders confidence in their strategy.

    All things are relative

    While NFP has immense impact, it shouldn’t be viewed without context. Other financial news events can cause greater movement with price or illuminate trends more clearly.  Indeed, traders whom rely on the NFP to move markets can be disappointed by subsequent inaction following announcements. This often happens when other news has already occurred, that NFP only confirms.

    Online Trading Forex – How, Where and Why

    As of today, forex is the largest market in the world. It has over 4 Trillion US dollars turnover every single day.

    Trading forex allows you to use high leverage in order to trade large amounts of minimal investment capital. It is very important to follow the steps below otherwise you may lose a lot of money instead of gaining the profits.

    Educate Yourself

    Learn all there is to it. You won’t be able to trade forex without the basic knowledge of spreads, currency prices, indicators and ways to analyze the market. Keep in mind that learning forex is an ongoing process which is likely to continue through your trading career.

    Trade with a Reliable Broker

    You need a good, trusted broker to trade with; a broker that doesn’t trade against you and earns his living on your losses.

    IMMFX offers transparency in forex dealing. We are an STP forex broker with zero conflict of interest. STP stands for Straight-Through-Processing, which means when you place an order with IMMFX we will simply pass this trade to one of our liquidity providers. These liquidity providers are the largest banks in the world, have deeper liquidity and they are the ultimate counterparty to your trades.

    Start Small

    There are lots of currency pairs you can trade, however it might be a good idea to stick to just one pair in the beginning. Focus on the pair, learn which technical and fundamental factors causes the pair prices to change and how.

    Choose Trading Platform

    The process of trading platform is closely related to the selection of the broker. Each broker offers trading platforms with certain features and trading conditions. You need to figure out which platform suits you the best. Some of the main features to consider are:

    • Download vs web-based
    • Metatrader or in-house (broker designed) platform
    • Accurate trading prices
    • Reliable order and transaction execution
    • Accurate market analysis and news
    • Strong security protection
    • Minimal system downtime
    • Allows different trading styles including, swing, hedging, and swap-free accounts

    At IMMFX, you can trade with the most popular and flexible MetaTrader 4 trading platform which also comes for your pocket devices. Our Prices are accurate and we don’t play with the price of any instruments since we an NDD broker. You can also perform Swing trading, Hedging or Scalping with us. IMMFX also offers Swap-Free accounts for traders with the Islamic faith. Therefor, IMMFX could be the right choice for your trading career.

    Have a System and a Plan

    You need a plan to follow. Compose a system that provides you with an indication of when to enter and when to exit trades. Test it on demo accounts and carefully invest it into your daily routine. Discipline and consistency are the main keys to your online trading success in forex.

    Winning Scalping Forex Trading Strategy

    One of the popular strategies among traders is Scalping, which involves the rapid opening and closing of positions. Some scalpers deal with each trade of 5-15 pips within 5 minutes’ tops, while most traders stay in a trade for as little as 1 minute.

    How Does It Work?

    The trick in scalping is to be in and out with a profit but still maintain the discipline and risk management. While trading, you might want to pay attention to market indicators which affect currency rates.

    Exchange rates tend to fluctuate based upon economic and political news events – on both the national and international levels. There are several key indicators that scalpers (or any Forex trader) pay special attention to before investing:

    1. Government statistics, including the Gross Domestic Product (GDP) rate
    2. Unemployment figures
    3. Trade balance reports
    4. Inflation
    5. Interest rate announcements

    Not every trader can be a scalper. Since positions are opened for a short period of time, each return might seem insignificant. Combined together, however, great gains can be made. Scalper is a trader who doesn’t like to risk and only looks for safe, small and frequent opportunities.

    What are the Challenges?

    1. Patience

    The difficulty that most scalpers face is the lack of patience. Some traders find it hard to trade in such small portions and feel motivated enough to collect these pieces of pips into a bigger profit picture. If you tend to get excited easily and have a plan to produce large profits with each trade, scalping strategy is definitely not for you.

    1. Concentration

    Being a scalper requires great concentration and knowledge. Since you will be opening and closing many positions during a day and each position will bring small profits, you can hardly afford to suffer the losses.

    1. Full-Time

    Scalping is a very challenging and time-consuming technique. If trading is not your full-time job, you should probably scratch scalping out of your to-do list! You will have to give up at least 6 hours a day in order to make a decent earning.

    1. Forex Brokers that Allow Scalping

    Believe it or not, some forex brokers do not allow scalping. You will read about it either in their terms and conditions or find it extremely difficult to scalp with brokers that make sure this strategy is impossible to implement.

    However, you will be amazed knowing that you can perform Scalping with IMMFX very easily. We allow scalping and hedging as well. Our hedging is totally margin-free. However, we only allow scalping for currency pairs and not on CFDs.

    Conclusion

    Overall, scalping is not for everyone. Before you step blindly into it, you have to figure out your trading character, plan out the trading style and consider all the pitfalls lurking behind scalping.

    Forex Tips For Successful Trading Experience

    Forex trading may be intimidating and confusing at the first glance, however with a proper discipline and set of rules new and scary turns into a daily routine. Practice always pays off, especially if you follow the following tips:

    Education

    The first part of your education should be the realization that forex trading is not a spinning roulette that relies solely on the chance of luck. Mastering fundamental and technical analysis is a must if you want to make any money in currency trading.

    Practice

    Demo accounts are not for babies, but rather a great tool to practice your skills before you enter the real money market. Go over all the features and functions of the trading platform you have selected, try out your strategies and get a general feel of the market. Demo differs from live trading, but it doesn’t mean that there are no benefits from practice.

    Brokers

    Your next step is finding a good broker. Research the matter and look for a broker that is suitable to your trading style and need. Consider all the small details while shopping for forex broker – minimum deposit, trading platform, charting capabilities, customer support, regulation and license and other factors important to you. Feel free to visit Immfx Account Types and Trading Conditions to find out why we are one of the most reliable forex brokers with maximum positive reviews in the industry.

    Emotions 

    Leave your emotions for your family and friends. There is no drama in forex, but rather methodical analysis of the evolving trends. Control your greed, fear, excitement and disappointment. In trading, the only thing that follows the emotions is bankruptcy!

    Information

    Remember the night before final exams at school or university? You try to literally stuff your head with as much information as possible, memorizing the textbooks and solving the exercises. At some point during the night, however, your brain is no longer able to process information because you are just too tired and it is simply too much.

    Too much information will only cause damage and confuse you in the long run. Read some of the analysis and use a couple of indicators. Stuffing your trading platform with all indicators possible will create a complete chaos and ruin your day.

    Guarantees

    Do you want guarantee? Go to your grandmother and ask if she loves you! Seriously! Expecting guarantees in forex trading is like waiting for Santa clause to come down the chimney when you are 40! Santa is cool, but unfortunately, he is not going to help you trade! There are no forex secrets, no special ingredient, no mystery system, no guarantees of 400% profit per day.

    And if someone is trying to tell you otherwise, turn around and run as fast as you can. It is all scam which only leads to the loss of your hard working money!

    Patience

    Last but not least, work on your patience, because without it, your trading experience will turn into a nightmare. You need to be patient, using consistency and money management to build up your experience and turn forex trading into a career.