How is this even possible? What is the problem? This will be the topic of today’s article.
Has it ever happened to you that the broker deepened your loss compared to the one which was originally set as Stop-Loss?
Do you know why?
Keeping a trading journal plays an integral part in becoming and staying a profitable Forex trader. The professional traders and the best traders know this and they always keep a trading journal.
Anyone who is into Forex trading more seriously has probably started with one ultimate goal – to be able to live from the generated profits by trading the currency market. Novice traders, however, commonly misunderstand how this can be done - largely due to misleading advertisements and sales schemes by Forex companies.
So, without any further ado, let’s get into clearing up some misconceptions regarding Forex trading as a source of income and how much capital would one need to deposit in their Forex account in order be able to generate an income from it.
The answer to the question “How much should I start with in Forex trading?” depends on several factors that we will explore in this article. But, first of all, one word of advice: Don’t be misled by the minimum deposits that you see on many brokers’ websites as part of their requirements to start trading.
The Forex market is widely known as the world’s largest financial market, in the past only available to professionals from the banking sector, but now with the technological advancements in recent decades, the largest financial market is accessible for many retail traders as well.
Let’s mention a couple of examples that make this statement considerably relevant. One great example is the changing of the seasons. Our lives happen in cycles as well, because we experience good and bad life periods that alternate.
And if we look at life outside of the context of our own existence on this planet, we’ll see that the cycle of life consists of microcycles and that those microcycles are our individual lives.
In the previous article, titled “Regulation in Forex Trading” we discussed how the Forex market is regulated, what are the respective regulatory authorities in some of the developed countries as well as what regulation means for traders.
And while indeed, governments and central banks have many shameless instances where they actively intervened in the currency markets, most of the time they prefer to just monitor things without getting actively involved.
Having a great trading plan means nothing without the trading acumen to put the plan into action and the discipline to stick to it.
Below we look at each of the different assets and briefly discuss the main factors that drive their prices.
In this article, we’ll briefly discuss the most popular ways to trade the Forex market and the differences between each of them.
With depth of market data, clients get access to volume and liquidity information and can use it to their advantage. They have an insight into the sentiment of the market with the quantities of volume available at different prices which can often indicate the potential market direction in the future.
Traders on Forex trade a currency and wait for the value of the currency to either rise or fall compared to the value of the other currency from the chosen currency pair. There are many currency pairs, but it is up to the forex brokers to decide which currency pairs they will offer to their clients to trade.
Although this is the exchange rate that everyone is looking at and referring to, markets are known to often overprice or underprice financial assets, and the same holds true for currencies.
To find out how much a currency pair is over or underpriced and to determine the longer-term fair value of an exchange rate, economists use several different methods by which they can obtain the so-called “real” or effective exchange rates.
Devaluations and Revaluations vs. Appreciation and Depreciation
This is in contrast to a floating exchange rate system as is the standard among most developed countries where the value of a currency is determined by supply and demand forces in the market.
Cross pairs are not moving in isolation – Majors and crosses are closely related
Aside from the relationships that exist between some of the major USD pairs, cross currency pairs also have certain relationships to the major pairs and to other crosses.
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