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    • Month: July 2017

    Five Most Common Forex Trading Mistakes

    If you are new to trading forex, then you may make some common mistakes. To avoid making mistakes, you need to educate yourself and understand what you are doing. Forex trading can be tricky, but with the right education and information, you can increase your chances of trading successfully.

    Here are the five most common forex trading mistakes that are often made by traders.

    Trading Without a Specific Method

    Novice traders generally do not follow a specific trading method or system. More often than not, they just guess market movements. To avoid doing this, you need to develop a specific trading method and always follow it. To do this, you need to choose the analytical tools needed to trade the forex market. You can start with tools such as charts, technical indicators, trade signals and economic calendars. These tools will help you identify market trends and increase the probability of successfully entering and exiting the markets, and help you manage risks. Whichever tools you decide to use, you need to understand their usage and apply them correctly.

    Not Following a Specific Trading Plan

    Another common mistake that novice traders regularly make is that they create a trading plan or method but they do not follow it. Therefore, you must define a trading method that works best for you and then stick to it at all times. You must always be disciplined. Remember, do not trade your emotions just trade the facts!

    Expecting Too Much Too Quickly

    Many traders expect quick, unrealistically high returns. Although it is possible to get high returns, it is difficult to do it without taking on high risks. You need to develop realistic expectations to increase your chances of being a successful trader. Thus, manage the risks and you will have a higher chance of being rewarded.

    Making Trades Impatiently

    Usually, new traders are not patient when they are making trades. Because trading can be so exciting, new traders want to trade all the time, but it means that you can over trade and trade at a much lower standard. So being patient is important. And patience is also important over the long term. The longer you’re trading and gaining experience, the more likely you will be successful over time.

    Lack of Proper Money Management

    One of the biggest mistakes that traders make is not managing their money properly. Without proper money management, you won’t be able to limit your trading losses or maximize your profits. Ensure you do not forget about the risk of forex trading. With proper money management, you can limit your risk on every trade so that you will be able to make additional trades.

    Final Note

    If you want to avoid making common mistakes, you need to take the time to learn and properly educate yourself. You would not see top athletes entering a competition without proper training and practice; thus, you should not trade unless you know what you are doing. Once you have the knowledge and experience, then you can be successful in forex. Start trading only when you are ready.

    The Importance of Economic Data Releases in Forex Trade Market

    When you are trading in the Forex market, one of the most important things you need to do is to keep a track of economic indicators of the different countries you are trading with. If being a Forex trader, you are not keeping an eye on the economic data releases such as GDP, NFP, CPI, employment rates and inflations rates, it is highly unlikely that you will be successful in the trade market in the long-term.

    Keeping a close check on the recent news of economic indicators, even before they reach the market, is one of the key habits that set apart successful Forex traders from other players in the market.

     

    One major reason why most Forex traders do not keep up with the habit of monitoring economic data releases is the difficulty they may face in keeping track of when the news regarding these several indicators might be coming into the market. There are a large number of economic indicators that need to be observed and the number is rising constantly. The release timetable for all these indicators varies widely; some are made available on a yearly basis while others can be provided even on a weekly basis.

    Moreover, the increased use of electronic exchange and the constant upgrades of the information on online sources make it even more difficult to keep track of all changes in a systematic and efficient manner. Keeping track of a dozen economic indicators, each day can surely get overwhelming for many Forex traders. While many traders depend on their Forex brokers in such situations most of the time, it is still quite a hefty task to monitor all bits of economic data releases regularly.

    Another reason why economic data releases are neglected by traders most of the time is the complex nature of information, their inability to comprehend the economic jargon and draw conclusions on their basis. In order to understand and more importantly, use this information to their advantage, it is very important that the Forex traders have some knowledge regarding the macroeconomic principles and concepts. This often makes these traders ignore information that may prove to be vital for making successful decisions in the Forex trade market.

    The third and most common reason why economic data releases are usually ignored by many Forex traders is the fact that they fail to understand their importance in the Forex trade market. Moreover, the complex but interrelated nature of the relationship between these indicators and Forex trade market makes it quite confusing for the new traders to draw a conclusion regarding any relationship. This confusion is sometimes the biggest hurdle that makes traders ignore these economic data releases.

    However,

    the fact remains that in order to be successful at Forex trade, the need to understand these economic indicators and their effect on the trade market is very important. If you lack the ability to make safe and calculated assumptions about the future direction of the market, you stand to risk a lot financially. The ability to make these future assumptions can only come from the close study of several macroeconomic

     

    Benefits of Using Forex Demo Account

    Most Forex traders choose to practice on a Forex demo account and trade for a while before investing their funds to a real account. Our IMMFX demo account is funded by virtual money which you can use to execute trades, practice your trading and test our trading platform. What’s more? Let’s reveal some key benefits of using IMMFX demo account.

    Live Currency Market Trading

    As a beginner, you would not want to trade with real money in a live currency market. The lack of experience and the fear of making wrong decisions would prevent you from trading. A free Forex demo trading account will enable you to trade in a live currency market. The market will operate normally and will react in the same way to any price changes even if you are trading with a demo account.

    This is a very significant benefit as it will allow inexperienced traders to get a feel of trading in the real market. They will be able to make decisions based on fluctuations in the market and will be able to learn more from this small and simple exercise.

    Get Comfortable

    By using a demo account, you can get comfortable with our Forex trading platform. The trading platform can seem very difficult at first but once you get used to their fundamental functions and learn the techniques of using the platform to trade, you will find it very convenient to trade on that platform with a real account.

    By trading virtually, you will learn to read and understand chart patterns and interpret them. This will help you trade favorably and will result in greater chances of profit than loss.

    Techniques & Strategies

    Trading in the Forex market involves the use of many techniques and strategies to trade lucratively. Learning these tricks is very important as you cannot experiment with these strategies with real money. You may not be aware of the consequences of applying certain strategies and may end up losing your money in the currency market.

    Therefore, it is beneficial to learn these strategies and get to know the results of applying these in the currency market using virtual money and fictitious transactions. Trend trading, breakout trading, swing trading, scalping and turtle trading are some of the strategies that will help Forex traders to profitably trade in the Forex market.

    Practice

    A demo account will allow you to practice your skills of trading without risking any money. With no fear of loss, you can perform all kinds of transactions and see how they work for you. Even if you end up losing your virtual money, you do not have to take that as a failure. Rather, you can consider that transaction as an important lesson which you should avoid doing with a real trading account.

    ⇒ Open a Demo Account Now

    Forex Technical Analysis – A Brief Overview

    Technical forex analysis is a study of price fluctuations and market actions that traders use to help them make trading decisions in the forex market. Below is a brief overview of forex technical analysis.

    Assumptions of Forex Technical Analysis

    Technical forex analysis is based on a few key assumptions. They are:

    • A combined effect of market forces such as economic conditions, political events, supply/demand and seasonal fluctuations consequently lead to changes in price. Currency pricing changes are usually taken into account when traders determine their future trading strategies.
    • Forex market trends determine currency pricing changes. This concept helps traders determine their next move. The market patterns and movements have, in many instances, been linked to predictable consequences.
    • Many strategies of forex trading depend heavily on historical data and trends. These trends help to predict currency price changes. Data for the last 100 years, pertaining to the forex market, has been collected in order to identify certain trends. Over the last 100 years, some key patterns have emerged. These patterns are based on human psychology and the way traders react to different circumstances.

    Uses of Technical Analysis

    Technical forex analysis is a critical analysis tool. The importance of this tool cannot be underestimated. Most traders make decisions only after they have performed a technical analysis of the forex trends. IMMFX provides traders with a variety of different charts to help them. Traders usually confirm their trading strategies and decisions after they have performed technical analysis of currency price changes and the forex market.

    Benefits of Technical Analysis

    Technical analysis is an important tool for traders. It is very beneficial for them. Some of the key benefits of technical analysis are:

    Main Focus is on Price Movement

    The market price of a currency is a reflection of the current market and all market actions. Charting methods can help traders analyze the market at a glance and observe the changes in price. This can help them make lucrative trading decisions.

    Easy Identification of Trends and Patterns

    Technical analysis of the forex market includes the identification of various trends and patterns. Just by observing the moving average line, a trader can see whether a price is stuck in range or is continuously trending. A chart can display very quickly if a price is continuously trending in a certain direction.

    Patterns are another aspect of technical analysis. They can also be identified very easily with the help of charts. Even though patterns are highly complex, they can help traders predict price movements in the near future and base their trading decisions on them.

    A very good tool for predicting patterns like ascending and descending triangles, rounding tops and bottoms, and heads-and-shoulders are some of the few patterns that help traders determine their future trading strategies. However, without using charts, these patterns can be difficult to figure out.

    Conclusion

    Technical analysis is, therefore, an important prerequisite for traders who wish to develop profitable trading strategies based on market trends and patterns.

    Should you Use Expert Advisors?

    An Expert Advisor is a piece of forex trading software that is attached to the MetaTrader 4 platform. It can either trade automatically with no human interference or can be used to advise traders which trade they should make.

    How can you Use an Expert Advisor?

    Online traders use expert advisors either as a way to tackle the market in isolation or in addition to manual online trading. Once the EA is attached to the MetaTrader 4 platform it can direct all trades on your behalf based on the indicators you have programmed it with.

    You can use expert advisors for a number of reasons. First of all, you can use them to execute all of your trades for you on your behalf. This means that you do not need to perform technical analysis or tackle the market yourself.

    However, you can also use EAs to back test your trades and establish whether your forex trading strategy is effective. This will enable you to figure out what will make your trades more efficient and rewarding.

    What are the Benefits of Expert Advisors?

    Whether you are an accomplished trader or a novice to the industry, you can make use of EAs. They are easy to install and free to update.

    If you are novice to the industry then EAs are ideal since they do not trade with any emotion or stress. You will not need to analyse the market in detail, or have much knowledge of the foreign exchange market.

    Even for accomplished traders, expert advisors are incredibly flexible and are ideal for traders who do not have a lot of time on their hands. They are ideal for investors who already trade a specific currency pair (e.g. EUR/USD) but who do not have time to trade an alternative currency pair such as JPY/USD due to international time differences.

    EAs – Assessing their Effectiveness

    Despite the above assertions, many online traders proclaim that expert advisors aren’t as reliable as the human eye. They eliminate fundamental factors that are so important to forex trading and do not take into account natural, political or financial issues such as devastating weather or a terrorist attack.

    For this reason, if you are going to use EAs then you should do so with caution. Always perform your own background research and make a habit of keeping an eye on regular forex news. This will enhance the quality of your expert advisor and improve your chances of making a profit.

    Improving Money Management in Forex – 3 Easy Steps

    In Forex trading, money management is a serious factor and you must master it in order to have a long-term trading success. Let’s learn some easy steps to improve your money management skills in Forex trading.

    1. The Forex Trading account

    The first step is to do with your forex trading account. As a rule of thumb, you should only ever risk 2% of your forex trading account balance on a single trade. But even before this when you first open your forex trading account, you should not risk all of your life’s savings on a single account.

    Only put 2% of those savings into your trading account in the beginning. How can you guarantee that you will succeed with your first trades? You need to be able to easily start over again and if you risk all of your life’s savings on a single account then this is practically impossible.

    1. Leverage

    The next step involves trading with leverage. As a leader in the forex industry, the IMMFX brokers offer very flexible leverage as high as 1:400. However, if you are a new trader this is far too much leverage to play with and should definitely be avoided.

    Instead, consider 1:200 or less. Too much leverage is incredibly dangerous and can blow your trading account balance with one fell swoop. By using less leverage, you will be risking less of your capital overall.

    1. Stop Losses

    Stop losses are an excellent money management tool in forex. If you don’t set well-researched stop losses position you will never become an accomplished online trader. So do your research before each trade and set carefully calculated stop losses based on technical analysis and market fundamentals.

    Final Thoughts

    Evidently, money management plays an important role in forex trading. If you want to become an accomplished, long-term trader you should implement effective money management techniques into your trading strategy, including a maximum 2% risk on each individual trade.

    Classic Forex Trading Errors and How to Avoid Them

    Although in many respects we learn from our mistakes, when it comes to online forex trading, making too many trading errors can be stressful, timely and of course, costly. Both amateur and professional traders often commit the classic forex trading mistakes listed below, and whether you are trading forex, CFDs, or precious metals, it is better to be aware of some of the most common pitfalls, and do your best to avoid them.

    Trading Forex Without a Plan

    One of the worst mistakes any trader can make is to approach their forex trading without implementing a solid trading plan. Trading without a plan is incredibly risky, often resulting in unnecessary stress and losses.

    Having a strategic trading plan will help you to make valuable trading decisions, such as departing from a difficult trade in order to avoid a massive loss. Having a plan will undoubtedly enhance your trading success as you will find it far easier to get back on track after making a trading error.

    Nevertheless, a plan can only be implemented with a thorough knowledge and education of the forex industry, as well as a suitable amount of currency trading experience.

    Trading with a plan should come hand in hand with maintaining a proper trading journal. This will allow you to thoroughly assess your trading activity, review any patterns that have contributed to your success, or failures, and identify your weaknesses.

    Leaving a Position Open Without a Stop Loss and Take Profit Order

    Leaving a position running without setting a stop loss and take profit order can do irreparable damage to your account. Most forex brokers keep your trades open until you have closed them, but during turbulent market activity, it is all too easy to exit your trading platform without remembering to close your position, resulting in a frantic consumption of your funds.

    For this reason, placing a stop loss and take profit order on your open position helps to limit losses, determine your loss in advance and avoid having to trade on panic and emotion when your trade has taken a turn for the worse.

    Getting Ahead of Yourself by Using High Leverage

    Trading forex for serious money shouldn’t be taken light-heartedly and plenty of leverage can lead even the most skilled trader to make impulsive trading decisions. Trading with real money should be done with absolute caution and wisdom, so keep your leverage at a sensible range (usually the amount of leverage ranges from anywhere between 50:1, 100:1 or 200:1 for most positions) to avoid sharp drops in the market and even sharper drops in your bank account.

    8 Tips on how to Master Forex Trading

    Even though the process of forex trading is relatively simple to master, it has caused huge financial losses to countless traders. Listed below are eight tips on how to master the challenges and risks presented by the forex market and become accomplished in forex trading:

    1. Always keep clear goals in mind

    Setting goals in life is one of the easiest ways to achieve something, as with clear goals, you have something specific and attainable to head towards. FX trading is no exception. By setting clear goals before you enter the trading platform, you will be able to establish a solid trading style that suits those goals.

    1. Always expect losses

    Losses are an inevitable part of online forex trading and are experienced by even the most skillful traders at some point or another. Losses come with the territory

    1. Walk away from a losing trade before its too late

    You can use Stop-Loss position or close your losing trades before it’s too late.

    1. Don’t cut the profits too short by closing a winning trade early

    This is a balancing act that requires careful market knowledge and highly controlled trades. A losing trade is one that will not turn back around while a profitable trade is one that has the potential to further boost your forex trading account balance before being closed. Follow forex news and perform thorough market analysis to place these careful trading decisions.

    1. Choose a Forex broker that offers the right tools and resources

    Your forex broker should offer you a range of advanced trading tools and resources as well as a leading trading platform. Further still, you should be offered professional, 24-hour client support. You no doubt, IMMFX offers all these features for its clients.

    1. Start off small

    Don’t rush when trading forex. Start off with one or two currency pairs and gradually work your way up as your confidence improves. Practice any new trading strategies on a demo trading account until you have fully mastered them.

    1. Analyze the charts

    Technical analysis is one of the easiest ways to spot trends in the market. You should perform technical analysis using the indicators you are comfortable with and should also study weekly charts on weekends to stay ahead of the game.

    1. Avoid emotional trading

    Always stay calm and objective on the trading platform. Emotional trading is the biggest downfall of any investor. Whether you are fearful of the market or over-excited, both of these emotions have the potential to ruin your trades.

    Conclusion

    So, there you have it – eight key tips that will help you to master online forex trading and become an accomplished trader. follow these tips to improve your chances of success on the foreign exchange market.