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Advantages of Trading FOREX over Stocks and Commodities.
There are many advantages to Trading FOREX as your main income generator. Let’s start by something that may be worrying you already. “Do I need a Diploma or some kind of Certification to trade FOREX?” The answer is this: When attempting to make...
Home Based Business Opportunity: Secrets Of Success In Home Based Business Opportunity, Exposed
Do you have a home based business opportunity or program? Are you doing any affiliate program? What type of home based business opportunity are you doing? Are you a shining success in the home business opportunity that you’re doing? Are you...
Investing in FOREX or investing in Stocks? Understand the benefits and risks of each Market
So, you have the money to invest, but you don’t know whether to buy Stocks or try something new, like FOREX for example.
Stocks
Before we describe what are the benefits of FOREX, lets remember what are Stocks. Stocks have been a popular...
Real life dollars buy virtual game money?
Will people pay real dollars for in-game virtual money to help
their virtual characters buy in-game goods?
One gamer, who goes by the screen name Haylo, said he spent $10
to $20 real dollars a month on in-game platinum(all...
There Are Real, Live People Behind Currency Trading
The Internet offers an abundance of information about investing, currency trading, forex market, about how, when and what to do to earn more money in the easiest way possible. The “information highway” is practically a gold mine for traders that...
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Forex Trading: Margin Usage and Introduction to Hedging
A good rule of thumb for either a mini-account or standard forex
account, is to limit your margin usage for each trade to 5% -
10% of your usable margin.
As an example, if your usable margin is $5000, to trade safely,
limit your margin usage for each trade to a maximum of $250.
This means trading only 1 full lot for each trade. This is
assuming that you are trading in a CMS Universal account with
400:1 margin. Your use of margin is increased with a smaller
ratio, as most other brokerages only offer a smaller ratio,
normally 200:1 or even 100:1.
As your account grows and your usable margin grows, you can
increase your margin usage and trade bigger mini or full lot
sizes. If you lose money and your account shrinks, drop your
margin usage back down to smaller sizes. You need to learn to
keep your eye on your usable margin, especially if you've
suffered some losses.
Protect your usable Margin by not having more than 2 open hedged
or unhedged position at any one time. Your usable margin &
equity will get eaten up by un-hedged open positions that go bad
in the wrong direction...this is a really good reason why you
want to use stops, and if you hedge, hedge tightly.
IMPORTANT: Don't just keep putting on positions because you
think it's a good opportunity. First sell a position and book
some usable margin before you put on another position.
NOTE: Hedging does not use up more margin! Use it to protect
your equity & usable margin, esp. in an emergency situation!
If you break the hedging rules, and your positions go
against
you and you aren't properly hedged with stop losses, you'll
quickly see your usable margin degrade. If it degrades enough so
that your usable margin goes into the negative, you'll get a
margin call. This means that the operators will automatically
start selling some of your lots in your oldest losing positions
in order to beef up your usable margin. This makes your
unrealized loss become a realized loss...and the money is gone
from your account.
If you lose too much useable margin, they won't even let you
trade in your account, the message they'll give you when you try
to put on a new trade is, 'Account in Untradeable Condition'.
If this happens, you might have an open position that needs to
be hedged immediately or you might need to sell an old position.
Or you might need to deposit more money into your account. Then
you can start trading smaller lots to win back some usable
margin.
You can lose your entire account balance if you're not careful.
One other good thing about forex trading is that you will never
lose more money than is in your account, you won't have to sell
your house if you get a margin call! Stick to the rules above
and this won't happen to you. You'll make more money than you
thought possible and without the stress of loss.
About the author:
Cynthia Macy is co-author of 'The Day Trade Forex System: The
Ultimate Step-By-Step Guide To Online Currency Trading'.
http://www.daytrade-forex.com http://www.successtrading2000.com
http://www.professionalforextradingonline.info
http://www.shorterminvestingsite.com
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| Forex | Forex Trading | Forex Minis | Online Currency Trading |
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| www.dailyfx.com |
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| Currencies - Currency Converter & Latest Rates at CNNMoney.com |
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| FOREX Advisory |
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| www.cftc.gov |
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| Forex Trading: Online Currency Trading from Global Forex Trading |
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| Amazon.com: Foreign Currency Trading: From the Fundamentals to the ... |
| Amazon.com: Foreign Currency Trading: From the Fundamentals to the Fine Points: Books: Russell Wasendorf by Russell Wasendorf. |
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| Forex, Online Currency Trading, FX, Foreign Exchange | ACM Forex |
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| Forex-Day-Trading.com - Currency Trading with FREE Training |
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| Forex Online Currency Trading: Welcome to Global Forex |
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| Forex Blog |
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| Common Questions About Currency Trading |
| Whether you're puzzled by pips or curious about carry trades, your queries are answered here. |
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| Currency trading, free forex charts, news and analysis |
| Online currency trading with technical analysis, charts and forex news. |
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| Finance - Currency-Trading Ezine Articles |
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