Showing posts with label trade. Show all posts
Showing posts with label trade. Show all posts

Your risk per a trade should never exceed 3% per trade. It's better to adjust your risk to 1% or 2%

We prefer a risk of 1% but if you are confident in your trading system then you can lever your risk up to 3%

1% risk of a 100,000$ account = 1,000$

You should adjust your stop loss so that you never lose more than 1,000$ per a single trade.

If you are a short term trader and you place your stop loss 50 pips below/above your entry point .

50 pips = 1,000$

1 pips = 20$

The size of your trade should be adjusted so that you risk 20$/pip. With 20:1 leverage,your trade size will be 200,000$

If the trade is stopped, you will lose 1,000$ which is 1% of your balance.

This trade will require 10,000$ = 10% of your balance.

If you are a long term trader and you place your stop loss 200 pips below/above your entry point.

200 pips = 1,000$

1 pip = 5$

The size of your trade should be adjusted so that you risk 5$/pip. With 20:1 leverage, your trade size will be 50,000$

If the trade is stopped, you will lose 1,000$ which is 1% of your balance.

This trade will require 2,500$ = 2.5% of your balance.

This's just an example. Your trading balance and leverage provided by your broker may differ from this formula. The most important is to stick to the 1% risk rule. Never risk too much in one trade. It's a fatal mistake when a trader lose 2 or 3 trades in a row, then he will be confident that his next trade will be winning and he may add more money to this trade. This's how you can blow up your account in a short time! A disciplined trader should never let his emotions and greed control his decisions.

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Trading on the short-term periods at the Forex market is often considered a more popular practice than the long-term trading. In short-term trades your positions usually don't last longer than a day, while in the long-term trading they can remain open for years. Although, I prefer to trade on the long-term charts and hold my positions open for the long periods of time, the short-term Forex trading has its advantages:

1. You can trade on thousands of opportunities when the currency rates change with a high volatility.
You can capture every swing — up or down, trade inside the ranges and channels. Even the sideways market can be traded in short-term. When you trade long-term you miss these opportunities.
2. You don't have to tie up your funds for the long periods of time.
Your margin capital is locked only for the short periods and you can even get it out of the trading account if you really need it and then put it back and continue trading without any problems. In long-term trading your money gets caught into positions for months.
3. The majority of the Forex trading signals work only for the short-term trading.
Usually both technical and fundamental signals are played out in several hours of trading on the Forex market. The number of signals and events that influence currency rates on the long-term scale is really minimal.

This is what you get if you like to trade inside the day and use such techniques as breakout trading, scalping, news trading, range trading and any other short-term strategy. Of course there are also some disadvantages in the short-term trading, but they are not the topic of this post.

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Customers funds deposited with Sigma, are held and maintained separately in separated trading accounts at our partner banks. Sigma also provides its customers a variety of account plans, and services to choose from when creating or adjusting a profile.

The professionals at Sigma are dedicated to providing the guidance you need to accomplish your investment objectives.


When a dealer makes a trade he should forever observe the trade no stuff how long he is untaken to keep the trade on. To observer a trade simply it is best done on time frames higher than those in which he naturally trades. A merchant could see a trade more visibly when he has a bigger perspective. It is easier to dash the joist and resistance levels the further from the modern time skeleton you are trading. The lesser the time entice is, the harder it is to evaluator where a good exit spit is. That is if you want to get more than just a few pips on the trade. A trader who is concentrating only on an abruptly time surround will ignore clothes that are apparent to someone who is looking at the better time frames.

Something that I like to do find the trend on a better time body. Time the opening of the trade on a lesser time build then move back up to a larger time border to overseer the trade. This procedure will help to get more pips out of a trade and still permit the bazaar to move.

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Look for a reputable broker

  • Ability to trade effectively depends on consistent spreads and ample liquidity
  • Anyone can establish a position
  • Ability to close out a position at a fair market price is more important

Live to trade another day

  • Apply prudent money management skills
  • Avoid using excessive leverage that puts your investment capital at risk
  • Always trade with a stop!

Don’t trade emotionally, stick to your plan and maintain discipline

  • Establish a trading plan before initiating a trade
  • Set reasonable risk/reward parameters
  • Don’t override your stops for emotional reasons
  • Don’t react to price action – means don’t buy just because it looks cheap or sell because it looks too high, Have supporting evidence to back up your trade

Don’t punt

  • Don't punt( Punting is trading for trading sake without a view)

Don’t leave stops at obvious levels such as “big figures” (e.g. eur/usd 1.20, usd/jpy 110)

  • i.e. JUBBS stops = stops at obvious levels and thus are more likely triggered

Don’t add to a losing position in unless it is part of a strategy to scale into a position

  • In other words, don’t double up in the hope of recouping losses unless it is part of a broader trading strategy

Trading with and against the trend

  • When trading with a trend, consider the use of trailing stops.
  • When trading against the trend, be disciplined taking profits and don’t hold out for the last pip

Treat trading as a continuum

  • Don’t base success on one trade
  • Avoid emotional highs or lows on individual trades
  • Consistency should be an objective

Forex trading is multi-currency

  • Watch crosses as they are key influences on spot trading
  • Crosses are one currency vs. another, such as eur/jpy (euro vs. jpy) or eur/gbp (eur vs. gbp)
  • Crosses can be used as clues for direction for spot currencies even if you are not trading them

Be cognizant of what news is coming out each day so you don’t get blindsided

  • Be cognizant of what news is coming out each day so you don’t get blindsided
  • Beware of trading just ahead of an economic number and be wary of volatility following key releases

Beware of illiquid markets

  • Beware of illiquid markets
  • Adjust strategies during holiday or pre-holiday periods to take into account thin liquidity
  • Beware of central bank intervention in illiquid markets

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The Market
It is important to note that retail traders, such as yourself, will most likely be accessing the off-exchange foreign currency market (or Forex market) via an FCM (Futures Commissions Merchant) or broker. You will not be trading in the actual Interbank market itself. Your access to the total market will be determined by your chosen broker’s limitations/The
SigmaForex.



SigmaForex or brokers act as a bridge between you and their liquidity partner (sometimes larger global banks) that you would otherwise not have sufficient capital to do business with.
( view figure 2 ) The large majority of off-exchange retail foreign currency brokers act as market makers, meaning that by keeping many trades in house they create their own liquidity. Some retail brokers clear trades directly through to the larger banks that provide their liquidity. If you are new to the Forex market it would wise to research and understand your broker’s particular business model and method of clearing trades/The Easy Forex Guide.


SigmaForex will supply you with the informational and technical means to use its Services in a twenty-four-hour mode of operation starting Sunday 22:00 GMT to Friday 21:00 GMT except on official holidays in the USA and Europe.

SigmaForex shall provide you with access to trading transactions and quotes through the reserve in a twenty-four-hour mode of operation starting Sunday 22:00 GMT to Friday 21:00 GMT, except on official holidays in the USA and Europe, through the operators of SigmaForex.SigmaForex will fulfill to the best of its abilities all your trading orders, keep the register of your orders and of their fulfillment, and will provide you with necessary extracts upon your request./mnh12k

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During the whole week (except Saturday and Sunday) there is the so called “day-trading zone” and you are allowed to perform every kind of daily currency rate deals. These deals are renewing automatically every night at 22:00 (GMT) until the deal ends of course and are charged the daily renewal fees.

These are the simplest ways to trade on the Forex market. You only need to choose the right time and currency pair. You buy and only 15 minutes later you could have higher rate of return than what the banks are giving for whole year.



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There are a few reasons why Forex is considered unique.

  1. There are varieties of factors which affect the rates.
  2. There is geographical dispersion
  3. Large number of traders are performing in the market
  4. The market is extremely liquid
  5. Trading volume is enormous
  6. The trading hours are 24 hours a day (breaks only on weekends).

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The foreign exchange market (called as well currency or forex or just FX) exists when one currency is traded for another.
By all means this is the largest financial market on the globe. It includes trading between central banks, governments, significant banks, currency speculators, multinational corporations and many other institutions and financial markets.






The importance of these operations is described by the average daily trade which is over USD 3 trillion. The individuals are just a small fraction of this market and they are limited only to indirectly transaction through brokers or banks.

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Welcome to the World of Currency Trading

Indeed large multinational and individual banks and other major financial institutions have dominated FX trading (also known as Forex trading), but there is a paradigm change in the nature and type of investing. According to one estimate, in the new millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new technologically driven economy, and the clear winner is the customer. The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy in Forex trading.

We know Forex trading is direct access trading of currencies. In the past, foreign exchange trading was limited to large banks and institutional traders but recent advancements in technology have allowed small traders to take advantage of the many benefits of Forex trading using online trading platforms to trade. Virtually Forex trading is done 24 hours day and almost 5 ?days of a week. In the recent times, online trading has revolutionized the currency markets by making it accessible to the small and medium sized investor.

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Where is the Market Going?

If you ask me whether the market will have moved up or down by this time next year, well I may as well flip a coin, because I don’t know.

If you ask me whether the market will have moved up or down by this time next month, well again, I may as well flip a coin, because I still don’t know.

If you ask me whether the market will have moved up or down by this time next week, AGAIN, I may as well flip a coin, because I don’t know.

And if you ask me whether the market will have moved up or down by this time tomorrow, I am sorry, but I JUST DON’T KNOW!

But? if you ask me whether the market will move up or down in next few minutes, well I will have a definite opinion. Why? Because if I can see the CURRENT state of buying and selling in the market NOW, then I can make a reasoned and fairly accurate estimate of what the market will do in the next few minutes and moments.

My prediction will not be based on some secret formula; it will not be based on some esoteric sounding indicator, nor on some complex mathematical equation. No, it will be based on my evaluation of the current state of supply and demand.

Predicting the long-term movements of the markets is a guessing game. All we have to go on is the past; all we can reasonably do is assume that what has happened in the past will continue to happen in the future. Basically that is what trend following is, making the assumption that the past equals the future.

In my trading world, the only law that works is that of supply and demand: if there are more buyers than sellers then the market will go up; and if there are more sellers than buyers the market will go down.

It matters not one iota the whys and wherefores of the buyers and the sellers. It does not matter that a trader has chosen to sell now because the 9 period moving average has crossed the 14 period; or because he has just lost his shirt; or because he is taking a profit; or because he is just plain bored.

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Forex Trade Strategy

Forex Trade Strategy

A forex trade strategy is different depending on the broker, state of the market, time you plan on investing and even the currency you are trading. Strategies are dependent on the conditions surrounding the situation. A person trading without a broker in GBP/USD will have a different strategy than a person trading with a broker in USD/JPY. A simple search on any search engine will yield thousands of forex trade strategy templates, articles and advice. There is no way to gauge which single trade strategy is better than another because the market is vast and has many variables that impact the forex trade strategy.

Therefore, it is recommended that a demo account be opened with a broker firm that offers free accounts without asking for bank and credit card information. Secondly, a good tip is to spend time reading information on currency value and national indicators from verifiable resources, like Bloomberg, Reuters or Hoover’s. Third, spend time researching the different buy/sell strategies that other brokers and traders are initiating. Find one that fits your needs and level of experience.


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What is Leveraged Forex Trading?


Leverage is a term used to describe the difference between what is in your account, and what is available for trading. In Forex trading, leverage is essential as price fluctuations are only a fraction of a cent. If you have a leverage ratio of 200 to 1, that means you can trade $200 for every $1 that is in your account. The high leverage available in Forex trading is why it is so exciting, and so potentially rewarding.


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Marginal Trading in Forex Trading Systems


Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in Forex investments can be made without a real money supply. Easy Forex Course on CD. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital.

Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Forex Trading Systems Course, Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500. Forex Course Online


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