Forex trading psychology has been studied extensively by many researchers, typically to determine what type of trading mindset and personality type are most successful in terms of generating consistent trading profits. Several of these researchers have written important books on the subject that traders can read to gain insights into their own activities and whether or not they are psychologically suitable to become a successful trader. As with any form of speculative activity, the importance of psychology in forex trading simply cannot be...
The foreign exchange market has only recently become widely available to retail traders after the introduction of online forex brokers. These days just about anyone with a modest cash deposit, a computer and an internet connection can get involved in trading currencies. However, just because it is very easy this days to get involved in trading forex, that is no guaranty for anyone to succeed without having a good forex trading plan. In order to be successful over the long term in managing emotions, a forex trader generally requires an...
All forex trades involve the simultaneous purchase of one currency and sale of another, but the currency pair itself can be thought of as a single unit, an instrument that is bought or sold. A currency pair is the quotation and pricing structure of the currencies traded in the forex market; the value of a currency is a rate and is determined by its comparison to another currency. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency. In...
Retail foreign exchange trading is a small segment of the larger foreign exchange market where individuals speculate on the exchange rate between different currencies. This segment has developed with the advent of dedicated electronic trading platforms and the internet which have allowed individuals to access the global currency markets. In 2016, it was reported that volume from retail foreign exchange trading represents 5.5% of the whole foreign exchange market or $280 billion in daily trading...
Forex trading by retail investors has grown by leaps and bounds in recent years, thanks to the proliferation of online trading platforms and the availability of cheap credit. Leverage is defined as the use of borrowed capital, such as “margin” allowing the trader to gain access to larger sums of capital. Specific to forex trading, it means you can have a small amount of capital in your account controlling a larger amount in the market. The concept of leverage is used by both investors and...
