WAYS TO MANAGE RISK

Risk! every business has  a measure of risk attached to it. the business of Forex trading has it's own risk. in fact it is a very risky business. Due to the dynamic nature of the Forex market , one may have to find ways to reduce the amount of risk he or she has so that, one can have less losses when one trades.
there are so many ways to reduce risk. the most important ways are listed below.

EDUCATION
One important way to reduce or control risk for anyone, especially beginners  is to increase ones knowledge of the Forex market, books, tapes and classes will help anyone reduce risk of losing money and increase the possibility of making money in the Forex market. it may not be easy, but it's worth it.

CONTROL EMOTIONS
Forex trading is based on logic not emotions. Anger over a loss, fear that one may loose and other emotions have no place when one is trading. we all make mistakes, we could miscalculate and lose a trade getting angry and trying to get the market back is not sensible. the best thing would be to move on and wait for another trading opportunity.
Trades made based on what one sees with his or her eyes and not on what one feels are more likely to be winning trades.

PRACTICE
one can't overemphasize the importance of continuous practice to sharpen ones trading skill . one can't also overemphasize the disadvantage of not practicing continuously  Practicing on a demo account is an important way to reduce the risk of losing money before one trades on a live account.

START A FOREX TRADING JOURNAL
Having a journal to document progress, profits, losses, trading strengths and weakness,  will help one know  areas that need improvement. it will help one learn more about him or herself, it will help one not to repeat mistakes, this will reduce the risk of losing money and,  increase winning trades.

FOLLOW A FOREX TRADING SYSTEM
To follow a Forex trading system requires a measure of self-discipline, which may not be easy. it's important to follow a trading system if one wants to make any kind of profit and reduce the risk of losing money.

USE STOP LOSS ORDERS
Finally, always use stop loss orders, this will control how much one loss in a trade so that one doesn't loss all his trading money. in another article i will discuss what a stop loss order is.

thanks for reading.

ADVICE FOR BEGINERS

An Advice From My Mentor

Without a doubt, the Forex market is a very profitable market, and many beginners would like make profit in this enormous, volatile market, putting in 100% of their time and energy. it's good to work hard to earn a living but putting in 100% of time and energy is not sensible.

 Leading a balanced live is best. Working all day, all month, all year, will only give one a sore back.Whereas, enjoying the company of yourself, spouse, family and friends will help you to have an incredibly happy heart while you do your Forex trading.

one can make all the money in the Forex market but one will not truly enjoy it without a happy personal, marriage and family life. one can make another pip, another lot, another dollar but one can never make another father, mother, brothers, sisters, relatives and live long cherished and loved spouse and friends.

People are better than money. people make up the living fabric of a happy existence but money is just paper, just a means of exchange. Although, money is important it should not be acquired at the expense of a happy live.

thanks for reading

ELLIOTT WAVE PRINCIPLE

Back in the 1930's an Accountant and Business expert named Ralph Nelson Elliott discovered a principle that can be used to analyze how the financial market work, this principle was based on studying the psychology of investors in the market.

Elliott used wave patterns to describe how investors behave in the financial markets. the first waves pattern he called impulse waves and the second waves he called corrective wave.

This wave patterns could be used in either in a bear or bull market. Although, it was originally used to analyze the financial markets, this principle could also be used in the Forex market. it could be used to identify a new market trend formation.


this is just a brief introduction  to the intensely broad technical analysis subject called Elliott wave principle. there are different aspects of this principle i will discuss later.

MARGIN CALL

WHAT IS A MARGIN CALL?

A Margin call occurs when your usable margin is below the average amount to use to trade. in simple terms you will have a margin call if you loss most or all your trading money in your account. your Forex broker will inform you that most of your trading positions are closed because the money in your account is not able to sustain the trading position.

 more on this later.

What I learnt.

I have come to understand that, the Forex market is not a get rich quick scheme. i thought it was a way to make quick money, i guess i was wrong.

I think that if a new  trader starts trading with a get rich quick mentality, he may loss all his trading money.


I think that for a new trader to be effective he or she must know that, the market is not a get rich quick scheme, where one can just trow in a few bucks and hope to make a lot of cash.

it involves planning, reading and practice.

NEWS- U.S BUDGET CUT

There are a lot of technical issues about the U. S budget cut and, it's effect on the  market. but, as the deal has being signed after the stale mate. I will prefer to reserve my comment on the issue.

Blog Disclaimer

THE AUTHOR OF THIS BLOG WILL LIKE YOU TO KNOW THAT, THE INFORMATION IN THIS BLOG IS FOR INFORMATION PURPOSES ONLY. THE INFORMATION IS NOT TO BE USED AS PROFESSIONAL ADVICE. THE AUTHOR OF THIS BLOG DOES NOT CLAIM TO BE A PROFESSIONAL FINANCIAL OR FOREX TRADING ANALYST. THIS BLOG IS JUST A COMPILATION OF THE AUTHORS IDEAS.


PLEASE! BEFORE YOU USE THE INFORMATION IN THIS BLOG, YOU SHOULD DO YOUR OWN RESEARCH TO CONFIRM THE AUTHENTICITY, AS THE AUTHOR WILL NOT BE HELD ACCOUNTABLE FOR ANY LOSS INCURRED, AS A RESULT OF NOT RESEARCHING THE INFORMATION.

THANK YOU.