forex trading for dummies
So we will have to look wider for dependable guidelines to profit from these high risk – high profit systems. The first priority is to ensure that your account will be able to cater for the high draw downs and losses that can be expected. There are two ways to do this:But when you are reasonably safe from most foreseeable draw downs and losses you find that your return on investment ROI has dropped to a low percentage and the high %profits that you expected to make, requires too high an investment or otherwise very low profits per transaction. Suddenly you realize that with limited equity you can have the same ROI with a system with a much lower win ratio, but also has a much lower draw down and smaller Stop Losses, and therefore much less risk. So you must ask yourself the question, is it worth the stress and the danger of large draw downs and possible huge losses in order to make the same ROI that could be made with a much safer trading strategy?So – perhaps the rule of having a Stop Loss makes sense after all!In my next article I will continue to look at this issue and then propose a business and scientific way of approaching Forex trading that reduces risk to a minimum, but at the same time nearly guarantees a profitable outcome to Forex Trading. Add to this attractive volatility one important, very practical and positive point for individuals: Forex has evolved into a market in which individual investors can trade efficiently. That wasn't always the case. It used to make little sense for individual traders to trade currencies because you had to have a significant amount of capital to open a Forex trading account, which were only available at big money center banks. The expansion of the Forex market over the last decade, however, has made the Forex market very accessible with low transaction costs and easy to navigate for individuals. This large group of retail traders has complemented the ever existent institutional trading to create an even larger and more liquid market for currency exchange. Think about complementing your stock, ETF or options trading/investing with Forex an asset class of its own.
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You will come across a large difference in the kinds of services that trader’s offer and the expenses of trading with various traders.
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They tend to minimize themselves and compromise, therefore, their future.
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forex trading for dummies