Forex articles about currency markets for education purpose only which express author's point of view and should not be considered as advice in Forex trading.

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Bad Habits of Forex Traders

We all have our bad habits and forex traders are no exception. The only difference is that forex traders will end up Bad-Habits-of-Forex-Traders_EFlosing money if they keep up with their bad habits. Many forex traders do not even know that certain things they do are ultimately bad habits. Some of these bad habits of forex traders are identified below.

Losing Sleep to Make Money

A certain trader told of a position he had been watching for days. He had been in profit all this while, and wanted to stretch the profits even more by staying awake until a big move he had been expecting played out. Well, on the day of the big announcement, he was forced to stay awake to monitor this call and the effect it would have on his trade. But after several days of cutting sleep, he just could not stay awake. In what seemed like seconds, he put his head on his table and slept off, only to wake up to see the entire position completely obliterated. The news had disappointed the markets and the currency he had his money on sold off, wiping off all his profits. He later wrote that it was as if his brokers were watching him all the while and took him out while he slept!

The problem was not his broker. It was sleep deprivation. Many traders routinely stay awake to trade during trading hours when they should be having a good night’s rest. If you keep it up, it will catch up with you and you may pay with your hard-earned profits.

Chasing Pips All Over the Place

Some traders want to trade everything tradable. They jump from one currency to another with no understanding of currency behaviour or fundamentals and end up becoming a ‘Jack of all currencies and master of none’. A smarter approach is to follow a limited number or assets and become familiar with the technical and fundamentals of trading them.

Continually Adjusting Stops or Trading Without One

Continuously adjusting stop loss settings when the market is moving against the trader is like changing the position of a picture around the same wall, knocking in a new nail all the time until the wall begins to look like a dartboard. Instead of being willing to take a small loss, the trader begins to widen his stop loss to stay in the game but may end up losing more than they were prepared to. Sometimes you have to let the bad ones go and wait for the next opportunity to come.

Different traders have different styles and approaches. Whatever your method, just be sure to learn from past mistakes and not fall into the habit of repeating the bad ones.

Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).

Are London Traders Living the High Life?

There’s a common perception that traders and bankers in London are among the best-heeled people around. The London-Traders_EFstories of excess and multi-billion dollar bonus pools – despite regulatory crackdowns in the wake of the financial crisis – have fueled opinions that every trader in the City is living the high life. The question is whether or not perception is reality.

Young traders may struggle to cope with London’s cost of living

For entry-level traders straight out of school, making ends meet in London can be a real struggle. A junior analyst may expect to make about £50,000 a year – which translates into around £36,000 a year once taxes and National Insurance contributions are taken into account. With rents on a small flat in central London running at around £1500 or more a month, that means that 50% of their net income goes out on accommodation alone.[Read more]

Vanilla Options versus Binary Options

There are two types of options contracts: vanilla options and binary options. Even though both categories of options Vanilla Options vs Binary Optionscontracts have some features in common, there are some individual features that set them apart. Some of these differences are why vanilla options are preferred over binary by some traders.

Trade Format

Binary options are quite limited in the opportunities available to traders to trade the markets. Vanilla options allow traders various trade types which may be used to trade various scenarios in the market. For instance, straddle and strangle strategies may be used to trade scenarios where price action is not moving at all and stuck in a range. There are even strategies for moderately bullish/bearish or heavily bullish/bearish market scenarios.[Read more]

Can compounding your Forex account really get you your dream boat?

Many of us traders started trading in the first place to better our lives and achieve success. What’s that well known term that we all love? Financial freedom.  Now, of course there’s no such thing as an overnight success, but how many of us really achieve what we set out to achieve when we embark on our journey as Forex traders. You see, we go through the gruelling stage where we learn how to trade Forex just to come up with what almost feels like mediocre results. It leaves you wondering whether those past 6 months of training yourself to master the markets was really worth it, – leaving your career to pursue ‘the life’. Well, the answer isn’t always no, and the 5% of traders who have incredible success stories usually obtain a few skills along the way which help them become great. Now, obviously there are many skills that I could mention but one in particular I am going to talk about in this article is compounding.[Read more]

Ruble Tumbles Against USD Amid Sweeping Policy Changes

Forex Purchases Paused as Ruble Breathes a Sigh of Relief

US DollarEver since the Bank of Russia initiated forex purchases to stabilize the currency, the ruble went into freefall. Now, for the first time since these measures were adopted the Bank of Russia temporarily halted forex purchases and the ruble bounced back. During May 2015, forex purchases in the region of $100 million – $200 million daily were made. However, these reserves were depleted when the central bank attempted to defend the value of the ruble.

As a result, the ruble gained as much as half a percentage point against the dollar as it ended up at 55.704. Since interventions in the currency market began, the ruble slumped by as much as 15% against the dollar. Should forex fears increase, the depreciation in the ruble will lead to higher inflation. Since intervention was halted, the Micex Index gained a percentage point and the RTS Index gained two percentage points.[Read more]

Russia & China Buck Pressures with End of Year Currency Swap

Money and CoinThe Russian economy took an unprecedented beating in 2014, largely due to its adventurism into the Ukraine and its annexation of the Crimean peninsula. Western sanctions, spearheaded by US and European efforts, were swiftly imposed upon Russia as punishment for its aggressive posturing. Massive capital flight and a rapid devaluation of the rouble sent shockwaves through the Russian finance sector, prompting the Russian central bank to intervene in the currency markets. In tandem with monetary policy intervention, the Russians signed an important agreement with the Chinese (August 2014) to halt the further depreciation of the rouble on the international currency markets. The Russians are shifting away from their reliance on Western countries, in favour of trade with Bric countries (Brazil, China, India & South Africa).[Read more]

4 Surefire Rules to Follow not to Dump Your First Forex Deposit

What does it mean to lose money?Choose a Forex broker

If your initial Forex deposit gets down for more than 90%, it means that you lost it.

The web is full with trading systems and assistants promising that you would gain huge profit within the shortest time. Can you trust such promises?

First of all, we would like to ask why someone offers you to earn on Forex and why so many people lose their deposits?

How does a broker earn?

To answer the above questions, you need to understand what makes a broker’s earning. In this light, it will be easier for you to get the point of promises in the web.

An honest broker earns on spread (the difference between bid and ask). In other words, it is broker’s commission for your transaction in trading terminal. Normally, the more and longer you trade, the better earning of a broker is. But it is related only to honest brokers.

Here we are coming to the:[Read more]

Why Forex Trading is an Ideal Home Business?

The value of each nation’s currency is constantly fluctuating in relationship to other currencies, because of the operation of comparative advantages and the concept of foreign exchange which developed as healthy measure for all nations to be economically connected back in the Bretton Woods Conference of 1945. People may not realise it, but foreign exchange trading is very much like stocks. The values fluctuate and you need to be either very well-versed with the on goings or plain lucky to master this trade.


image by allan

Now, foreign exchange is often seen as a business venture or a line of business in a stock-trading firm and not necessarily an industry of its own. It is a niche but one can find very few home businesses running on forex trading. That is where a majority of the crowd seems to be losing out. Having forex trading as a home business is one of the safest ventures you can find in the current economic scenario and here are a few reasons for it:[Read more]

What Can You Learn From Sport Athletes About Forex Trading?

To become a professional in any field, one requires tremendous levels of hard work and focus. Be it sports or business, one always need to stay at the top of the game in order to earn a living through their skills be it physical or mental. Although at first glance, sports and foreign exchange trading might appear distant and totally non-related to each other. It might sound surprising to many but there are a lot of valuable lessons that a forex trader can learn from a professional athlete.

Running - Sport Athletes

Image Credits @ U.S Army

  1. Fearlessness

Most inexperienced traders face difficulty during fluctuating forex markets and often act out their fear of failure. The first thing that they teach most athletes is to accept their failures as learning and keep pushing forward. More than 90% of all foreign exchange trades result in a failure, so there is literally no use of trading with a conservative mentality. Losing is not the end of the world but is an unavoidable part of life. Being result oriented and fearing losses in the forex trade will never allow you to become a successful trader. Business is about taking risks and your fears only limit your ability to make profits in a long run.[Read more]

Trading Tip: Stick to your strategy

When May Sarton said, “We have to dare to be ourselves, however frightening or strange that self may prove to be”, she was definitely not Forex Strategyreferring to traders who constantly keep changing their strategy as soon as they record a loss, but her wise words can help them keep off this self defeating habit. It is human nature to point a finger at something or someone when things go wrong, but in Forex, constantly changing your strategy can run your pockets dry.

Guest post by Orbex

Forex trading is basically a skill which can be improved over time. Like every skill, the ‘’10,000 hour’’ rule also applies to Forex. In simple terms, the rule stipulates that for one to achieve competence in any skill, he should be able to practice a particular skill for a minimum of 10,000 hours. To be honest, no particular Forex trading strategy is wrong. What is wrong with most strategies is, well, the owner of that strategy. To most people, a strategy is as good as its last trade. However, this view is fundamentally wrong, unless, of course, you are looking for the Holy Grail. We all know there is no Holy Grail in the Forex market, so when you have settled on a particular strategy, you should be able to learn all its strengths and weaknesses. Learn when it works, and when [Read more]

Dealing With Anger And Emotion After a Losing Trade

Anger After a Losing TradeToday’s lesson will be on ways to deal with the emotion you feel after losing a trade. As I’ve said many times before, it is impossible to win every trade you make in the Forex market, trading is a game of odds and we must strive to keep the odds on our side as much as we can to be successful. Accepting that there will be some losing trades is the first step to success as a trader – though it comes with some more than undesirable consequences. Losing a trade is never a pleasant experience, even for the most experienced traders. It is a difficult thing to come to terms with, especially when you are new to the Forex market. You need to learn how to deal with the emotions you feel when you lose a trade and have a decent plan to help you keep things under control and remain focused on your predefined trading plan. Contrary to the title of this trading lesson, not everyone feels the same emotions when they lose a trade. I personally feel anger, but others may feel sad, disappointed or even embarrassed. In this lesson I want to give you some advise about how to deal with the vast array of emotions you might feel when you lose a trade and I want to teach you how you should feel and how you can adapt your trading style to ensure you maintain the right emotional balance in the unfortunate event that you lose a trade in the market.[Read more]

The components of a trading plan

A trading plan can be relatively simple or it can be complex. In forex, a trading plan is essential to traders as it brings routine and calm to the trading process. Using a trading plan, a trader can make better decisions, trade in a more relaxed way, and therefore be more prepared to overcome any unforeseen hurdles.

Trading Plan[Read more]

Rules for the Commodity Channel Index

The Commodity Channel Index is a technical indicator invented in 1980 by Douglas Lambert. The indicator itself was initially designed to help with engineering problems that dealt with erroneous signals. However, it’s been applied to many other things, including financial markets, and despite its name, the indicator works just as well on Forex as commodities.

Price oscillator

The CCI is a useful price oscillator and it’s fundamental use is to calculate where the price of a currency is in relation to its statistical average. The oscillator is unbound with values able to exceed +100 and -100 on both sides. As such, values over +100 are considered to indicate a highly overbought condition while values under -100 indicate an oversold condition.

It’s therefore a flexible indicator that can be utilized in momentum and mean reversion strategies. The most common method is to buy the market when CCI is below -100 and sell when the indicator is above +100. It’s also possible to use the CCI in connection with other indicators such as volume, ATR or with moving averages to smooth the oscillator and identify divergence.

While overbought and oversold levels offer good points to buy and sell, it can often pay to treat the signals differently. A market where the CCI goes through the levels gradually is more likely to continue on its way, while a market where the CCI spikes up or down through the levels quickly is more prone to reversal. These are important characteristics for mean reversion traders.[Read more]

The rhythm of forex markets

There are many ways to approach Forex trading and several rely on subjective interpretations of price patterns or computed rhythm of forex marketsindicators.

Many indicators, however, look at markets in exactly the same way. They look at Forex prices as moving largely independent of time and market signals often occur from similar price movements.

Some traders, particularly short term traders, and particularly those that have been trading for a while, take a more instinctive approach to the markets. Often, they have tried numerous technical indicators and now use only one or two favorites.

More importantly, a lot of their decisions in the market are based on gut instinct and intuition. Many claim they are able to ‘feel’ the market and move in sync with the market’s rhythms.

Two types of market rhythm

Being able to feel the rhythm in the Forex market is an important skill and it is not one that is easily picked up with technical indicators.[Read more]

3 tips for surviving in the markets

Financial markets are always interesting, never dull, but it could be said that the last few years have been more interesting than Forex Investorusual. The global financial crisis and the response from world central banks has led to financial events making the front pages of world news, when previously, this would not have been the case.

There is a good reason for this – the world of finance is more perilous than it has been in recent times. Stock markets can no longer be relied on to produce stable, solid returns and Forex markets are increasingly fought over by governments who all want to devalue their own currencies. As a result, there has never been a better time to learn how to survive in the markets.

Preserve capital

The key to surviving in any market, not just Forex, is the preservation of capital. Only once capital has been preserved can a trader even think about growing wealth. Because growing wealth without thinking about capital preservation means taking on unwanted levels of risk.[Read more]