Why Do Most Forex Traders Fail?

Posted by Deb | Forex,Guest Post | Wednesday 1 March 2017 6:51 pm

Here’s the truth – most forex traders lose money trading forex. And, if you have tried it on your own you have probably lost money too. I don’t know what happened in your situation that caused you to lose money but I do know, in general, what causes most people to lose money with forex.

There are three factors that I find with failing forex traders and I want you to do a “self analysis” to see if this is happening to you too:

1. Greed – this is a tough one because none of us want to admit to being greedy. However, MOST of us are to some degree! If you find yourself making money with forex but always wanting to “make more” only to find yourself eventually losing money then you are struggling with greed!

2. Unrealistic Expectations – Most people like forex because of the volatility and quick movements throughout the day. For some, this is no different than the thrill of gambling in a casino. If you are expecting to turn $1,000 into $10,000 in 30 days or less then you have VERY unrealistic expectations.

Your goal should be to steadily make positive gains day after day and let your account grow through compound interest. Give yourself a LONGER timeline to become successful and the pressure will drop and your chances of success will increase!

3. Poor Money Management – Put simply, this means trading too large of a position for your account size. If you are risking more than 1% of your account on any one trade you are trading too large. I personally trade MUCH less than 1% per trade because it helps to lessen my risk even further. I recommend you do the same!

And while we are on the subject …

Is Forex Trading Gambling????

ForexCharts

Many people who don’t understand forex immediately label it as “gambling” and guess what, most of them are right! And the reason they are correct is because traders violate the rules that professional gamblers follow EVERY DAY without fail.

What are those rules? Here are just some of the pro tips I’ve learned over the years.

1. Never trade based on emotion – If you “feel” like a trade is going to go in a certain direction based on feelings alone then WALK AWAY. Leave emotion at the door! Pro traders place a trade for one reason only – they see an event unfold and they know with a high level o certainty that an outcome will repeat after that event (most of the time). They are playing an edge based on TESTING.

2. Never trade outside of your plan – This means you should trade the HOURS, the FOREX PAIRS and the TIME FRAMES you have decided that are best for your trading style. When you trade outside of that bad things happen. Don’t do it!

3. Walk away from your computer – Forex is not a “game” that rewards you for long hours. In fact, it usually works just the opposite. I guarantee that the more time you spend on your computer the more trade setups you will magically “see” and take. Taking MORE trades in forex will not reward you. Take just enough to make your profits and then WALK AWAY!!!!

Now it’s your turn. Look in the mirror and decide if you want to trade forex for a living or let fear hold you back! Then, make a decision to take a first step to a life of freedom!

Get more free tips instantly at: www.ForexAlerts.guru/free

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FACTORS THAT AFFECT CURRENCY RATES

Posted by Deb | Forex,Guest Post | Sunday 22 January 2017 10:02 pm

Following please find a fewa factors which affect the fluctuation of foreign exchange rates. People who engage in money transfer internationally should stay updated on these factors and be able to decide the best times when they can carry out their money transfer. One can avoid losses in the currency exchange rates by opting for the flat exchange rates service that maintains a flat rate despite the market fluctuations.

Inflation Rates
Market inflation causes change in currency rates. The value of currency appreciates when a country is experiencing low inflation rates. When the inflation rate is low, good and services price will increase at a low rate. When a country is experiencing high inflation rates, the currency value depreciates and this leads to very high interest rates.

5857220614_2dab24d89a_bInterest Rates
Varying interest rates affect the value of a currency and also affects the rate of dollar exchange. When a country has high interest rates, its currency value appreciates because lenders make more profit, this results to increased foreign capital and high exchange rates.

Country’s Current Account/ Balance of Payments
When a country has loss on its current account because of earning less money from its exports and spending more on imports, this leads to depreciation. Balance of payments can lead to unstable domestic currency rates.

Government Debts
When a country has a lot of debts, it cannot acquire foreign capital which makes it experience inflation. Foreigners do research and if they foresee a debt in a certain country, they sell all their bonds in an open market not escape the consequences they might face in future. As a result, the exchange rate value of this country goes down.

Terms of Trade
Terms of trade are the ratio of price between imports and exports. A country has better terms of trade of the prices of exports are greater than prices of imports. This country will experience a high revenue, high currency demand and increased currency value.

Political stability and performance
Political and economic stability of a country determines the strength of its currency. Foreign investors are always attracted to countries that are stable both economically and politically. Countries that experience political and economic turmoil often miss a lot of investment from foreign investors. High inflow of foreign capital causes a country’s currency value to appreciate while countries facing political and economic crisis experience low currency value.

Recession
When countries experience recession, their interest rates fall drastically making it impossible to attract foreign investors. The currency values of such countries become weak leading to low exchange rates.

Speculation
Foreign investor will invest more in Countries that have a possibility of experiencing high currency values in future to plough back more profits. This leads to a high demand on that currency and the currency value rises up.

Georgina This guest article has been submitted by Georgina Cumber, a freelance finance blogger specializing in the foreign exchange and bad credit industry.

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How to Determine Exchange Rates

Posted by Deb | Forex,Guest Post | Thursday 29 December 2016 12:14 am

Exchange rates are never constant in the global market. They keep changing from time to time. In fact they are constantly changing every minute as viewed in the stock market graphs. The stock brokers and the foreign exchange experts always keep their eyes on the constant changes on the graphs on how the markets keep behaving. This allows them to know when to make purchases and sales of the money in order to change from one foreign currency to the other. The factors that affect the behavior of currencies in the international market mainly are the supply and demand at any given time. The factors that determine the supply and demand can be political stability in a country, the economic stability in a country and the security that exists within the borders of a particular country.

Exchange Money Euros Finance Currency Paper NotesThe interest rates depend on the factors mentioned above which influence the economic calculations which in turn affect the stability of the currency in the international market. The foreign exchange experts should be knowledgeable to know when to buy or not to buy a particular currency as a result of the conditions that exist within the country. The currency exchange services should include experts who have the capability of predicting the behavior of currencies in the international market as a result of the existing conditions within a country.

The first step in getting the best foreign exchange rates is to maximizing on the profits during the process of changing from one currency to the other is to seek the services of an expert in the international trade. This is a prudent idea for international business men who will keep dealing in large amounts of money from time to time. One cannot know when to get the best rates from the market apart from the stock brokers and the international financial advisors.

Another way is to compare the prices from various conversion agents within the same time duration. This is because comparing prices within a large time frame may not help because the prices keep fluctuating upwards or downwards all the time. The process of comparing the conversion rates should be done within the shortest time frame possible. If one takes a longer time they might think that they have got the rates at their lowest yet the prices may have changed immediately they saw them during the long time they took to make the survey. In currency exchange, it is better to do the comparison online or in shops that are very close together where one does not waste any time from one currency converter to the next. That is why the financial expert will do it better than the unskilled citizen who does not know where to start from.

Georgina This guest article has been submitted by Georgina Cumber, a freelance finance blogger specializing in the foreign exchange and bad credit industry.

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How to Capitalize on Growing Silver Prices

Posted by Deb | Day Trading Journey,Guest Post,Investments | Tuesday 23 August 2016 11:59 pm

SilverInvesting in silver is like any other investment. There are always risks, but there is also that potential to earn money. There is no real secret to succeeding in this kind of business venture. However, it pays to be informed and learn the correct investing practices that can help the investment succeed.
Silver or Gold?

Silver is known as the poor man’s gold. Like gold it is a high risk investment, but the investor stands to gain a lot if the silver is invested wisely. Much like gold, silver prices are steadily on the rise. But unlike gold, silver is easier to attain since it is not as expensive. So an investor with limited resources can make use of this commodity to make his investment balanced and safer at a lesser cost.

Higher Potential Rewards

In a market where share prices are rising or are expected to rise, there is a higher increase of value in silver compared to gold. This may be because of factors like supply and demand and volume of the commodity being traded. So a good thing to note is when the market is bullish or rising, then it would be a good idea to put money on silver rather than gold.

The Demand for Silver

Silver is a metal that has many medical and industrial applications and people are finding new uses for this precious metal every day. It is used in computers, laptops, cell phones and other devices. Not only that, it is used in the medical field because of its anti-microbial properties. This is silver that is not returned to the stockpiles. This will eventually increase the demand for this metal and will lead to higher prices as the demand gradually increases.
Silver as a Commodity

Like its more expensive counterpart, silver is a fixed value commodity. The price generally remains the same except in certain circumstances where there is a possibility for the value to increase. This makes it a lesser risk when trading, especially in places where there is political unrest. Silver, like gold can be used as a currency without fear of losing its value in such a delicate situation. The value of silver will remain the same.

Silver CoinsKnow when to buy and sell

Like all items in the stock market, silver prices can and will fluctuate. The secret is buying when the price is low and sell when the price is high. One has to consider that there are certain fees to pay when dealing with silver so it would be a good idea to find out when the price is at its lowest and when it is at a high enough prices for the investor to earn a profit after the fees.

Trading silver is not an easy task. The market is also unpredictable, so it will be hard to guess when to jump in and when to get out. Silver may be a better investment than gold, but investing

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Betting on Deflation May Be a Huge Mistake. Here’s Why…

Posted by Deb | Guest Post | Thursday 21 January 2016 11:08 pm

By Clint Siegner, Money Metals Exchange

Precious metals investors heading into 2016 worry the dollar will continue marching ahead, right over the top of gold and silver prices. The Fed is telegraphing additional rate hikes throughout the year, and commodity prices – led by crude oil – are falling. There have been tremors in the biggest beneficiary markets of all when it comes to the Fed’s QE largesse – U.S. equities and real estate. And the possibility of a recession is growing, both in the U.S. and around the world.

inflationThere are plenty of reasons we might see even lower official inflation numbers and a stronger dollar in 2016. But don’t think for a second that consumer prices or living costs will fall. They haven’t, they aren’t, and they never will in a sustained way – thanks to the Fed’s creation in 1913. This is where the deflationists have it wrong.

The impact of further disinflationary forces or even a deflationary episode on precious metals prices is a bit harder to predict.

The bear case for precious metals is rather simple. Should metals trade like commodities, they are likely to follow other raw materials lower. If we get a liquidity crunch akin to the 2008 financial crisis, just about everything will be sold as investors raise cash to meet margin calls or flee to the dollar as a perceived safe-haven.

There is also the possibility that metals prices will simply be managed lower. Growing numbers of investors realize that Wall Street is not a bulwark of free markets. Major banks have admitted to rigging markets against their own customers, and the Federal Reserve aggressively intervenes in markets in its quest to centrally plan the world economy. Why wouldn’t the Fed also be active in trading precious metals? Those dismissing the notion that metals prices are manipulated are naive.

Today’s Situation Is Different Than 2008

The bear case assumes history, in particular the experience surrounding 2008, will repeat. Or that there is still plenty of ability for anyone seeking to force metals prices lower in the futures market to actually do so. Or both.

Maybe. But relying on those assumptions could be a tragic mistake.

For starters, the U.S. dollar is already near record highs. Meanwhile, commodities and precious metals have been beaten down mercilessly. This set-up is the complete opposite of what faced investors leading up to the summer of 2008. And even though stocks and commodities got hammered in 2008, gold posted modest gains for the year as a safe haven from the threat of a collapsing economy.

Lower gold and silver prices have already produced an imbalance between bullion supply and demand. Supply deficits in 2016 are likely to make the developing problem with inventory at the COMEX and other exchanges even bigger. Registered stocks of gold all but vanished recently as bargain hunters, particularly in Asia, have been happy to buy and take delivery. Silver inventories aren’t in much better shape.

deflation_inflationMore deliverable bars must come from existing stocks, but holders won’t be anxious to sell. Those with “eligible” COMEX bars have certainly been slow to convert them to “registered” of late. By all indications, miners will be unable to provide the needed supply.

With prices below the cost of production, mine output is set to drop significantly this year.

If the metals markets look forward, as markets are supposed to do, they will anticipate the Fed’s response to a strengthening dollar and economic malaise. In 2008, investors knew little about the lengths to which the Fed would be willing to go. Today they DO know. The Fed will overwhelm deflation by creating new inflation.

Markets are completely dependent on Fed stimulus, and people simply expect officials to roll out an even bigger initiative whenever the need arises. Anything to prevent the cleansing effect of corrective forces from restoring heath to the economy. In a recent interview, market expert Jim Rickards predicted the Fed will abandon rate increases and actually commence lowering before the year’s end.

Metals investors should take heart in the fact that gold and silver prices have shown some resilience in the face of disinflationary forces recently. Both metals outperformed oil and most other commodities last year. Yes, prices declined roughly 11% for both metals. But crude oil fell 36% and copper lost 22%. The precious metals gained purchasing power against many other things.

Bottom line: Don’t bet on a meaningful deflation. Fed officials will not allow it. And they can keystroke dollars into existence until the power goes out for good.

Clint SiegnerClint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

 

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What Can We Expect for the US Dollar, Gold and Oil in the Year 2015?

Posted by Deb | Guest Post,Investments | Monday 15 June 2015 8:28 pm

This last year, 2014, will undoubtedly take its place in the history. During 2014, risks had been growing around Ukraine and the Middle East. One of the main events of the year was the collapse of oil prices. In June, 2014 barrel costed about 115$, but in the last days of the year quotes slumped to  56$.

What Can we expect for the year 2015?

Oil market

The main reasons for the oil prices collapse in 2014 were:

  • Increase of hydrocarbons production in the USA from 9.8 to 11.5 mln barrels per day;
  • Recession in countries of the European Union led to decrease in consumption and prices of hydrocarbons;
  • Growth of supply in Iran planning to increase production twice and Libya’s return to the market;
  • Technological factor: improvement of technology of production and decrease of prime cost as the result.

Currently, one can witness a disproportion between demand and supply: Every  day,  the level of oil production exceeds the market  demand by 600-700 thousand of barrels.

Analytics of the US investment banks assume that sometime during the first two quarters of 2015 year this index can grow up to 1.25 mln barrels per day. This factor will put a strong pressure on oil quotations,  so that we may see  again the low values  of 2008, when the  cost of Brent was $36 per barrel.

US dollar

The main global currency was boosted by the growth of the US economy which was growing with the fastest pace of the last 11 years. The US department of commerce revised its GDP estimation and defined it up to 5% per annum. Such estimation was justified by a higher consumer demand  and expenses of business. It was the fastest pace since 2003. It had been reported earlier that US economy grew for 3.9%.

This intensive growth in 2014 lays a solid foundation for 2015 and we can expect that the US currency will be consolidated against its major competitors.

Gold

Finally,  let’s talk about gold. Since there is no inflation risk in the USA – on the contrary, deflation presses Europe - there is no ground for traders to invest in gold: savings are not depreciated. This can make the precious metals less popular and quotes of gold may get to $1100 per ounce.

Confident growth of the US economy will support global markets through 2015, whereas low oil prices will have a positive effect for the economic growth in general.

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Online Forex Trading

Posted by Deb | Forex,Guest Post | Tuesday 29 October 2013 1:14 am

Is there anything today that cannot be done via the internet? Aside from smell (which they are working on) and taste, we find ourselves more and more living in a virtual world.

As little as 20 years ago, most investors invested through the services of a broker. Often orders were taken via the telephone, but mostly it took a personal visit to the broker’s office in order to get an order filled. Physical tickets were handled and floor runners ran to the market floor to place a trade.

Practically all trading is done today online. It is faster and more convenient and highly impersonal. Traders need never meet the broker who places the trade and are totally ignorant of whether or not their money is handled properly.

Forex, or foreign exchange, trading began in 1997 and was conducted by big players such as financial institutions, international banks and wealthy investors with substantial portfolios of over $1,000,000. Forex began as an online investment and continues to be the largest financial market in the world despite the fact that there is no physical marketplace.

Over the years, Forex brokers opened their doors to individual traders and with the lackluster performances of the stock and bond markets, many traders have moved their monies over to Forex.

Forex traders bet on the movement of the price of the currency. The U.S dollar is considered the strongest currency and the EUR/USD is the most popular currency pair traded.  A host of commodities such as gold and petroleum products are internationally priced in dollars and require payment in US dollars only.

Many factors determine Forex prices including economic factors such as interest rates and inflation. In addition, political issues and social changes create price fluctuations. Often these reactions are short lived but they are enough to make a Forex trader lose a substantial amount of money.  A surplus or shortage of a currency can cause major fluctuations in the Forex rate of any currency.

Forex markets are open 24/5 on a continuous 24-hour basis and are not governed by the rules of any particular country. However, in order to protect the individual investor, most Forex firms are regulated by a supervisory agency and must comply with the regulator’s stipulations.

Bitcoin trading operates in a similar nature to Forex trading.  This popular virtual currency can be traded online against other currencies and transactions can be completed in mere seconds.  Although there is no reputable regulation yet, there are many movements to have this form of trading regulated in the near future.

Online Forex

Anyone interested in trading Forex can open an account with the myriad of online Forex brokers. The sites are informative and interactive. They can provide the novice trader the information needed to get started. Some sites, however, can be overwhelming and often the beginner gets lost in the maze of data. It is advisable for any new trader to read the online review sites, such as Daily Forex, to compare the features offered by each brokers.

Before placing your first trade, it is essential that you understand the world of Forex. Online tutorials are usually provided on the broker’s site. In addition, free courses, such as FX Academy.com  are offered to those who wish to delve deeper into how Forex works in order to emerge as a successful trader.

The most important feature to look for is the broker’s free demo account. This provides you with the opportunity to trade for several months with virtual money. Practice makes perfect and the more experience you have under your belt before trading in a real account, the more chance you have of coming out ahead. Jump in too soon and you can expect losses.

When you do open a real account, ease into trading by using only the minimum amount required. Often this can be as low as $500. Try to avoid leveraging your account. Trading on margin is a sure way to lose your money and most brokers are only too eager to provide you with up to 200:1 leverage.  Don’t fall for that trap.

A trader must know when to pull out of the trading arena. It takes a lot of time and knowledge to predict the right time to buy or sell but here’s a rule of thumb: If you’ve made some money, don’t be greedy. Pull out while you can. If you have lost money, don’t wait to lose every cent in hopes that things will turn around. Pull out and use whatever funds are left to buy again later. Don’t let your emotions rule.

 

 

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