Last year at this time, the majority of forex traders and market professionals were talking about parity between the Euro and the US Dollar as the EURUSD dropped to as low as 1.03373 on an intra-day level. Price action had plenty of downside momentum and the phrase ‘the trend is you friend’ was thrown around. As with all trend, they do reverse and the Euro entered an explosive growth spurt. Twelve months later the EURUSD recorded an intra-day high of 1.25358. Now many traders are trying to determine if the Euro party is over or if it will...
There is a relationship between leverage and its impact on your forex trading account. The greater the amount of effective leverage used, the greater the swings (up and down) in your account equity. The smaller the amount of leverage used, the smaller the swings (up or down) in your account equity. As tempting the ability to generate big profits without putting at stake too much of your hard-earned money may be, you should never forget that an excessively high degree of leverage could drain your entire starting capital in a blink of an eye...
Like any other type of investment, currency trading has its inherent risks and potential for profitability or loss and knowing how to mitigate these risks goes a long way in determining your own currency trading profit or loss. Foreign exchange trading is when you attempt to generate a profit by speculating on the value of one currency compared to another. Foreign currencies can be traded because the value of a currency will fluctuate, or its exchange rate value will change when compared to other currencies. Like some other forms of trading...
The most profitable forex traders understand that financial markets are connected and that in order to maximize profits it is important to look at all aspects. Many forex traders, especially new ones, only scan their MT4 forex charts in order to find a profitable trade. This often only gives them a part of the bigger picture which in many cases results in losses and unexplained price action moves. Those traders who think outside-the-box can and will find trades which will yield superior returns than those who are stuck in one part of the...
Many currency traders spend time learning how to spot trends or reversals on the chart without focusing on what causes those trends or reversals. There are numerous factors that influence currencies on different time frames and it is always hard to determine the most important one in a certain point of time, even though a lot of investors believe in the supremacy of one factor or another. To get an idea of the connection between the factors and the price action on different time frames, you should have, at least, a basic understanding of the...
