Online Forex Trading

Discretionary Traders

In browsing around the web I often encounter discussions of the merits of a particular trade and opinions about the direction of a market. I know that the traders who voice these opinions have good intentions and much of the discussions could be helpful to the person receiving the information. (Some of these discussions are on our Forum.) However the provider of the opinion must be very careful that he doesn’t start believing too strongly in his position because he has made the mistake of going public with it.

This is an important psychological issue that I seldom see discussed. Taking losses is always difficult and the reluctance to promptly acknowledge that we are on the wrong side of the market is probably the single most costly error a trader can make. Even under the best of conditions we hate to take losses. Publicly advocating a particular trade or the direction of a market just makes being wrong all the more painful and harder to accept. If we make it a policy to go around advocating the merits of our trades it will only make it harder to recognize when we are wrong.

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Would you like to enjoy the lifestyle of successful forex traders? If you were to split foreign exchange traders into two groups – the successful and the less than successful – could you identify those characteristics which separate the two groups?

It does not really matter what we do in life, which includes foreign exchange trading, but, whatever we do, one thing that will have more affect on our success than anything else we do will be setting goals.

It is a simple fact that the human mind works best when it is given a roadmap to follow and, by setting a goal, you start building your roadmap by clearly defining the end point of your journey. However fixing a destination is not sufficient and you will also need to define the route which you are going to follow to get to your destination. Here is an example.
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The easiest way to demonstrate the ability to profit from Forex trading as the exchange rate rises and falls is to look at some examples. Let’s start by looking at how you might profit when exchange rates rise.

Let’s assume that you believe that the UK Pound is going to rise against the US Dollar and that you can buy GBP/USD at 1.8730. We’ll also assume that you are trading a standard InterBank lot of 100,000 so that 100,000 UK Pounds will cost 187,300 US Dollars.

To open a trade you start by borrowing 187,300 US Dollars, which you will have to repay when you close out your position.

[Note: We will not discuss the idea of borrowing to fund your Forex trading at this point but will simply note that the majority of trading is done using borrowed funds making use of leverage.]
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There are various different ways in which traders can place orders to buy and sell currencies and this gives foreign exchange traders considerable flexibility in planning their trading strategies and allows them to both maximize their profits and minimize their losses.

Market Order

The simplest form of order is the market order in which the trader simply buys or sells a currency pair at the current market price. Because of the enormous size of the market and its high liquidity there is little if any delay or slippage in the market and market orders are in essence guaranteed.

Limit Order
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Stock Trading
1. Taking responsibility of your capital
2. Cut your losses early and let your Profits Run
3. Discipline
4. Too much information
5. Do not marry your trades
6. Do not bet the farm
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Stock Trading
1. Taking responsibility of your capital
2. Cut your losses early and let your Profits Run
3. Discipline
4. Too much information
5. Do not marry your trades
6. Do not bet the farm

1. Taking responsibility of your capital
It is interesting how many people are happy to place their savings and funds in other peoples hands, accept the losses as its easier to blame someone else than to take responsibility of those funds ourselves.
Read the rest of this entry »

There are various different ways in which traders can place orders to buy and sell currencies and this gives foreign exchange traders considerable flexibility in planning their trading strategies and allows them to both maximize their profits and minimize their losses.

Market Order
Read the rest of this entry »

The easiest way to demonstrate the ability to profit from Forex trading as the exchange rate rises and falls is to look at some examples. Let’s start by looking at how you might profit when exchange rates rise.

Let’s assume that you believe that the UK Pound is going to rise against the US Dollar and that you can buy GBP/USD at 1.8730. We’ll also assume that you are trading a standard InterBank lot of 100,000 so that 100,000 UK Pounds will cost 187,300 US Dollars.
Read the rest of this entry »