Lowest Spreads:ForexGen
Investing in yourself and your education is always a wise decision. Investing in learning Forex trading could be one of the wisest decisions you ever made. People from every country on the globe are entering the markets daily and many of them are becoming wealthy because of it. The first step towards creating wealth for yourself is to learn currency trading from its fundamental theories to its sophisticated investing strategies.
and the potential for more profits (and losses). How does this work, exactly? A 1% margin account allows you to control a currency lot of $100,000 for $1,000. When dealing with $100,000 small changes in the price of the currency can result in large profits or losses. FOREX currencies are traded in much smaller units than cash. The American dollar, for example, is traded in units down to 4 decimal places. Instead of $1.32 FOREX quotes are seen as $1.3256. The smallest unit in FOREX currencies is called the pip, and when you have a $100,000 each pip of your total lot is worth $10 (when trading American dollars).
If the price of American dollars changes from 1.3256 to 1.3356, that's a difference of 100 pips which represents a profit or loss of $1000. Without margin, if you had $1000 of currency, the price change from 1.3256 to 1.3356 represents a difference of $10. Significant to the tourist, perhaps, but not the investor.
So the benefit of margin is increased profit potential.
Risks
As there is increased profit potential, there is also increased loss potential. If you are not careful, your entire margin account could quickly be wiped out. If your margin account is 1% and the currency moves just one cent against you, you lose $1000.
FOREX trading, however, has several methods to limit loss. Stop loss orders automatically close your position if the value of the currency crosses a pre-determined point. Stop loss orders allow you to limit your losses to a specified amount while still allowing potential profit taking.
world of forex trading. But there is a checklist you need to follow to have a profitable trading experience. That would make your forex trading worthwhile and that much more orderly.
1. Short Term Volatility is Random
Millions of forex traders trade trillions of dollars in currency each day and to say that you can measure what this diverse number of traders will do in a few hours, or a day is laughable you can't.
2. Support and Resistance Levels are Meaningless
To trade any market you need to have valid levels of support or resistance to key off however with all volatility being random in short term trading, prices can and do go anywhere and support and resistance cannot be used - as the data simply isn't valid.
