Monthly Archives: March 2016

Reasons Why Forex Traders Lose Money

Most forex traders end up troubled, it is said that 96 percent of them lose their money. Some traders do better than that, while it takes time for new traders to familiarize all trading things. Here are a few reasons of why traders lost money.

  • Start with small capital

Most currency traders are searching for an alternative way to get out of debt, or to generate easy money. It is normal for a broker to encourage an investor to trade large lot sizes, including high leverage in order to see bigger results with just a small amount of investment. However, starting with smaller amount might lead to worst times possible.

Thus, inexperienced investors in forex trading should not engage with small amount of capital. Start with $1000 for smaller trades, if not, you’re just putting yourself in trouble.

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  • Mismanage of risk

With poor risk management even if you got skills and knowledge, all your money could be wiped out. Your job in forex trading is to secure what you have, and not to make profit. Simply because if your capital is worn-out, your ability to make profit will vanished.

Hence, learn to use your stops, and move them as soon as you reached a reasonable profit. In lot sizes, use a realistic one that your capital account. Most of all, get out if the trade is no longer making any sense.

  • Being greedy

Traders are being greedy as they feel like squeezing every last pip. They’re doing it before a currency pair turns and thought of throwing away the profitable trade. Remember, there is money to be made every day.

Therefore, do not practice being greedy. There’s nothing wrong to execute reasonable profit as long as you got more pips to go. The movement of currency changes every day, so there’s no need to chase for that last pip.

  • Indecisive Trading

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Finding yourself in an uncertain decision makes you think of picking a wrong direction. For instance, you’ve opened a trade and it did not profit immediately, you start to close your trade and later realized that the market go back in the initial direction you just

You must choose a direction and stick with it. Switching back and forth will just surely wiped your account at a time.

  • Picking turning points

Inexperienced traders are normally undecided in picking turning points. A trade is placed on a pair, and while it keeps going in the opposite direction, they add to their position predicting that it will go in the right direction this time. If you continue this way, there’s a higher chance your trade will turn negative.

To avoid this, you must trade with the trend. If you think the trend will change and you witnessed an opportunity for new direction, wait for a definite trend change.

You can earn bigger profits and execute better trades here at Trade12 by reading the latest market updates on our official website, Trade12.com. Striving to become the best forex broker for you, Trade12 reviews daily market events essential to your trading activities to help you develop a keen understanding of what is forex and certain trends involving stocks, currencies, indices, commodities, and metals. With all the positive Trade12 feedback from clients, you will be assured that your trading account is safe and secured.

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How to Predict Forex Movement?

Most of the successful investors and traders in the forex market proudly claim that their success has been driven by their skills and ability to forecast every market movement. To be a successful trader, one must possess a full understanding of the factors that create an impact on the rate of exchange currency’s movement.

Here are a few factors that provide the investor to generate a more precise forecasts, which enables them to have a better opportunity towards success.

  • Economic Growth

    A country’s economy is very essential in the forex market. If a country’s economy is healthy, it involves a higher chance that its central bank will raise interest rates to capture the growth of inflation. The higher the interest rates, the greater the possibility for investors to aim for the country’s financial marketplaces. Thus, if a country’s markets are participated by many investors, currency’s demands accordingly increase. With greater demand, comes with an increase in the currency’s exchange rate.

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  • Geo-Politics 

    Reading a newspaper and seeing economic statistics or accounting numbers are quite traditional and considered old. Let me tell you that the currency exchange market is considered as the only market that can be traded by virtue of political, including economic news in the world financial markets. Keep in mind that the currencies represent a country instead of companies. Normally, commotions on political landscape affect the exchange rate movement.

  • Mergers and Acquisitions

    It is considered as the least essential of other relative factors when it comes to forecasting the movement of a currency rate. On the other hand, it is usually the most powerful factor where near-term currency moves are considered. If a company from one economic region desires to acquire a corporation in a separate country, the mergers and acquisitions simply occur. A wise trader will keep on top of this type of activity in that it supports to forecast short-term movements in the market.

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  • Interest Rates 

    The currency value of a country rallies coincidentally with a hike in interest rates. The increased value of the currency mirrors what is called “capital appreciation”, and this allows the investor to have a chance to generate profit. Each currency rate comes packaged with an attached interest rate. Thus, interest income is derived either by buying currencies from countries, which comprises of a higher-interest rates or finance these purchases with currency from countries comprising with a lower-interest rates.

  • Trade and Capital Flows

The first thing to know before making a final forecast with regards to the trend of a certain currency is whether or not the currency is dependent on the capital or trade flow on its country. The amount of investment a country is getting from international sources are known as “capital flows”, while the income that resulted from a trade is called “trade flow”. Other countries can be dependent to capital flow, while some countries are exceptionally sensitive to trade flows.

You can earn bigger profits and execute better trades here at Trade12 by reading the latest market updates on our official website, Trade12.com. Striving to become the best forex broker for you, Trade12 reviews daily market events essential to your trading activities to help you develop a keen understanding of what is forex and certain trends involving stocks, currencies, indices, commodities, and metals. With all the positive Trade12 feedback from clients, you will be assured that your trading account is safe and secured.

Tips for Part-Time Forex Traders

Not all market traders get involve full time, and of course, thanks to the advancement of technology, clients do not have to be a fulltime trader to have access to the markets.

There are various part-time traders, including professionals, old retirees, and even students at legal age. Basically anyone who has to allocate most of their time on full time jobs or other things but still want to be a part of the market.

However, it is somehow difficult to trade part-time, as there are many obstacles to overcome before profiting consistently. But worry not, here are some strategies to help you and make your part-time trading effective:

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  • SET YOUR PRIORITIES. As indicated above, part-time traders can be the ones who give most of their time to their full-time jobs, which is merely the main source of their income. Hence, compromising the quality of forex trading is not advisable. Setting your priorities applies to all, and it does not matter how long you have been trading. It may be for months or years, but setting your priorities straight is helpful to all. However, there is a catch for part-time traders: you have to keep the game extra tight. Since you are not available all the time, it is best to keep yourself disciplined and prepared when trading.
  • FOREX TRADING METHOD SHOULD VARY ON YOUR SCHEDULE. You might only have an hour or 2 to give time in trading every day, and in this case, it could limit your options. But there is a solution for that since you can trade during sessions that have low volatility. There is a strategy like scalping or switching to longer-term swing and position plays. Check your schedule and figure out your trading style from there.
  • MAXIMIZE YOUR TRADING TIME. Managing your time wisely is essential when you are a part time trader. You only get little time with your trading so make the most out of it. Setting a routine when trading is also important. It does not only mean actual trading where you buy and sell. It should also include core tasks like journaling, chart reviews or back testing. Whenever the market is moving slow, you cannot just stare at your charts and slouch around. Take that extra time as an opportunity for skill building in core trading tasks.
  • WISE MINDSET IS ESSENTIAL. It is impossible for a person to watch the charts 24/7 without a blinking eye. Keep in mind that it is okay to miss the huge moves as long as you are patient for a setup to materialize. Do not worry; pips are just always around the corner.
  • JOIN FORUMS. There are hundreds of discussion boards you can join in and you ensuring you, you are not alone in any trading situations. There are thousands of full-time and part-time traders in online forums where you can also learn from their experience. Socializing with these people can help and advise you with your trading.
  • TAKE IT SERIOUSLY. Even if it is only for part-time, trading can be very risky. You are investing your money, and even if you have lots to spare, stick to the idea of making profit, but it can also be a rainy day sometimes. It’s not even only the money you’re investing, but also your time. Invest to grow, take time to learn and make the most out of it. Maybe you are not aiming to be a professional trader, but it takes perseverance to see results.

Striving to be the best forex broker, have our exemplary brokers to guide you and be regularly informed with current market affairs at Trade12.

What is forex though? Find out at Trade12 and be a part of our company’s growing excellence and definite success as Trade12 reviews all sorts of news to assist you with your trading. Sign up for a live account now at Trade12 forex broker to profit as much as you desire. You are also very welcome to express your Trade12 feedback regarding our company’s service.

 

*Note that this article has been contributed for another blog website, but was originally written by Trade12.