Trading Courses: The Importance of Eliminating Emotions

Forex trading courses are intended for teaching beginners how to trade in currencies. Generally, such courses provide an introduction to currency trading and information about how to read quotes, factors that influence exchange rates, risks and benefits and trading strategies for risk management.

Despite being all inclusive, trading courses somehow lack the most elementary feature of the learning process. This relates to the actual trading experience because no matter serious and sincere you are, the actual trading experience cannot be simulated; neither in a traditional classroom setting nor through Power Point presentations. Trading in financial markets can send the adrenalin rushing to the brain leading to rash and often illogical trading decisions. It is thus extremely important to learn how not to let emotions rule over sound trading decisions.

Education imparted in trading courses through series of lessons or meetings is great for learning forex basics, terminology and trading strategies. However, for deriving full benefit of what you have learned you must try your hand at the actual thing. It is for this reason that good trading courses insist on taking the learning process to the final and most important level. Advanced trading courses accomplish to complete this process with the aid of actual trading on a trading platform.

If you think that you have taken one of the best trading courses available, you can complete the process on your own as well. Most forex dealers allow new clients to start with a demo account. You are provided with live rates as if you were trading for real. The only difference is that real money is not involved; you trade with virtual money. Try your hand and see how long it takes you to learn how to stick to a trading system and keep emotions out.

Characteristics of a CFD Tracker that Ensure Success

A CFD trader is someone who trades in the CFD markets. The CFD markets have been seeing a surge in the number of people who intend to take it on and try their hand in CFD trading. However, there are some things that you need to check about yourself, your personality and your abilities to see if you are likely to become a great CFD trader or not. These traits are signs of a great CFD trader.

A successful CFD trader needs to have a mind that is analytical with regards to numbers. He is one who can look at numbers, create trends and understand the import of the data. Being able to make decisions quickly based on the numbers that you have seen is another important characteristic of a good CFD trader.

Confidence against all odds is another aspect of a CFD trader that can lead to ultimate success. This means that you need to have the confidence about the decisions that you have made with regards to CFD and stick with them. Giving up and calling for stop loss too early is the biggest mistake that a CFD trader can make.

However, it is also an important aspect that the CFD trader understands when he has made a mistake. Calling stop loss at the right time and reducing losses is important because a CFD trader knows that he needs to live to fight another day.

The keen balance of knowing when to hold on and when to quit is of utmost importance for a CFD trader.

Trading Strategies for Pleasant Trading Experiences

Trading in markets is full of risk regardless of whether you are trading in currencies, stocks or commodities. Venture into financial markets without proper understanding of trading strategies and you run the risk of losing all the money in your trading account.

Trading strategies are basically market analysis that traders use for determining whether to buy or sell at a given point of time. Regardless of whether it is forex or stock trading, trading strategies may be based on technical analysis such as charting tools or fundamental analysis or study of news-based events.

It is necessary for day traders to have trading strategies suited for various market conditions. During the course of a single trading session, while playing out the broader trend and range, one may notice new trends emerging and fading only to reappear again. In times like this, traders need to choose whether to make a profit only at the time that suits a single strategy or use different strategies that suit an array of market conditions.

While using strategies it must be kept in mind that markets have a mind of their own. No matter how skilled a trader is, one can only hope to minimise losses as they cannot be eliminated totally.

On the face of it, trading strategies appear to be difficult to internalise and use. They actually are but if you can take care of one single aspect of human nature, you can use them to minimise losses. For effective use of trading strategies, it is extremely necessary that you control greed and keep emotions out. It is because of this that many experts recommend automated computer based trading systems.

Forex Risks and Benefits

Only recently, trading in forex, short for foreign exchange, was in the domain of large institutions and retail participation was not possible. However, the Internet and emergence of online trading platforms has changed all that. It is now possible for retail traders to trade in currencies through online brokerage accounts.

Forex is a highly fast-paced market where prices change every minute. However, daily currency fluctuations are very small, usually less than one percent in a day. To increase the value of small price movements, currency traders rely on the availability of enormous leverage that can be as much as 250:1. The fact that the forex market is highly liquid has made it possible for brokerages to offer high leverage as it addresses the issue of risk associated with it. The availability of leverage also makes it more volatile than it appears on paper.

Trading in currencies, just like trading in other financial markets, is a risky proposition. The very same leverage that increases the potential for profit for traders is responsible for huge gains turning into losses that can sometimes wipe out the major part of your account with the forex broker.

The forex market is also the largest financial market in the world involving large number of players dealing in larger amounts of money. Moreover, the currency market is open round the clock. It is thus important for beginners to understand that traders’ reaction to information released into the market is almost instant, which leads to constant movements in exchange rates of currency pairs. Although currencies do not move as sharply as stocks, the availability of leverage and the large size of individual contracts, makes forex trading as risky.

Trading Platform: Features You Cannot Afford To Ignore

A trading platform is proprietary software, usually offered free on maintaining a funded account with stock brokers or forex dealers. It provides traders the ability to initiate buy and sell trades and manage their positions. Most platforms also include market analysis software that allows traders to chart the markets. Software associated with trading platforms is easy to operate and extremely user friendly. Most of the times, the broker or the dealer will guide beginners how to use its various features. This is often accomplished by offering traders to try their hands on a demo account before opening a funded account.

Regardless of whether it is a trading platform for forex or stock trading, primarily it is a channel for communicating and exchanging information between you and your broker. It may either be an online trading platform or it may be installed or made available for download on your computer. In either case, an internet connection is necessary for getting live feed required for placing orders and monitoring accounts. A web-based trading platform has a distinct advantage as it allows traders access to markets from anywhere through any computer connected with the Internet.

However, there are certain features that need to be checked. Availability of real time and historical data is a absolutely necessary. Another feature is the ability of placing all types of orders that you need for managing risks associated with trading in financial markets. If you are one of those who trade in the forex market during your spare time, the trading platform you need should allow strategy automation. This allows you to create an automated trading system so as to execute trades at precise entry and exit points and adhere to time tested money management rules.

FX Singapore: Different Types of Orders

There are two ways that you can trade. One is simple buying and selling of currency pairs that the FX Singapore dealer offers. You go long (buy) one currency and short (sell) in the other currency in the pair. The second way is to trade in derivatives that have a specific currency pair as the underlying asset. Both these techniques are similar to what stock traders use on daily basis in stock markets.

However, the simple buying and selling of currency pairs is more common; most new traders are relatively unfamiliar with the way derivatives are traded in FX Singapore. One buys or sells a currency pair in the hope that the exchange rate of the currencies in the pair will move favourably to the position taken in the trade. For example, a long position in AUD/USD pairs yields profits when the exchange rate of the Australian dollar goes up in relation to the US dollar and a loss if it goes down. The exchange rate will rise when the value of the AUD dollar increases against the US dollar, which means that the bet is on the Australian dollar.

Here again, while initiating a trade in a FX Singapore account a trader may place a market order or a limit order. A market order is executed at the current prevailing price quoted on the FX Singapore trading platform. A limit order on the other hand signifies a specific price at which the order should be executed.

You also have the option of placing a take-profit order with the FX Singapore dealer. This means that your open position will be automatically closed once the price moves up to the specified level. Similarly, you can place a stop loss order to protect yourself against sharp downward movement in price.

The Uniqueness of FX Trading

In the FX market you are not really buying or selling anything even if on the face of it appears that you are buying one currency and selling another. It is basically a speculative market and there is no transfer of ownership of any currency in any case. Trades are simply accounting entries and profit or loss is netted or calculated on the basis of market price. A trader’s account is credited or debited in the currency in which it has been denominated. For example, even if the exchange rate of EUR/USD is quoted in US dollars, an Australian dollar denominated FX account will be credited in AUD.

The existence of FX market is basically for the purpose of facilitating exchange of currencies for exporters, importers and other trade related international transactions including payroll and mergers and acquisitions. However, trade related needs for foreign currencies amounts to only about 20-25 percent of the daily turnover in the FX market. Such transactions are in the domain of large banks that buy or sell foreign currencies on behalf of their clients. The rest is all speculative trades initiated by multinational banks, large financial institutions, hedge funds and even high net worth individuals. In fact, the FX market opened for the small individual investor only recently, thanks to the Internet.

In essence, when a trader initiates a trade, he is actually buying one currency and selling another because currencies are traded in pairs. If a trader buys a standard lot (equivalent to a hundred thousand units) of AUD/USD, he is essentially exchanging USD for AUD. It is almost similar to exchanging cash for, say, a laptop except that no transfer of ownership is involved in FX trading. However, the transactions may only be accounting entries the effects are as real as any other trading activity.