Live to Trade Another Day

Pips Wizard Pro

Live to Trade Another Day

I am going to share with you a few reasons why I trade the Forex, and more specifically why I trade advanced Currency Markets. the Forex foreign exchange is popular for a number of reasons but one reason is certainly the ability to have leverage over any account when making a trade.  This means you can take large positions with out having to have a large account balance.  The downside is obviously that you can also loose just as quick which is more often the case when attempting to trade with higher leverage accounts.

FC Forex Braşov
FC Forex Braşov (Photo credit: Wikipedia)

Be patient. Even though you may be tempted to make trades that do not fit within your rules, you must learn to love the fact that your are following your rules just as much as you love to have winning large trades.  The problem with over-leveraging and winning, is that your a conditioning bad habits that will ultimately take you out of the game.  Rarely has a great trader ever admitted to making it by trading with high amounts of leverage in the ACM Forex

Never trade more then 10% of your account when forex investing.    You must never trade more then 10% on any given trade.  This will protect yo in the event that yo have a series of losses that you still have a high enough balance to trade the next day.  For example, if your balance is 10,000 and your were to lose $4,000 on one trade, the next trading you can now only trade with only 10% of the new balance of $6,000.  This makes it much harder to come back over time because you have less money to trade with.  Now if you have followed the rule, you would have only lost 1,000.  Trading the next day is really not much different because even though you had a losing trade you are still trading with 90% of you account.

What most people don’t realize is that when taking a large hit in the market dur to over leveraging, you have now cut you balance in half to try and slowly work your way back.  Most will try to regain there losses quickly and often dig a bigger hole only to get taken completely out.

Avoid this al together by simply appreciating smaller more sustainable gains in the Forex, rather then larger gains.  This will naturally protect against the downside and create a pattern of controlled trades that are proportionate to your balance.

The key here is if you have 7-8 trades that went against yo in the market, you can still recover reasonably well.  Live to trade another day

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Buying on Fundamentals

SetForget Pattern Profit

A very successful investor was once asked “how do you make money in the stock market?” Buying on fundamentals. “Simple”, he said. “Buy low and sell high”.

1903 stock certificate of the Baltimore and Oh...
1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia)

Great advice, if only it were that simple. We all know that in order to make a profit you need to sell your stock at a higher price than you paid for it. But to do that, you have to pick the right stock and get the timing right.

This is where things get a little more difficult. How do you go about picking the right stock? And how do you know when is the right time to buy and when you should sell and close out your position?

One strategy that many successful investors follow is looking for stocks that are particularly undervalued or cheap, relative to the rest of the market. There could be a number of reasons why a company’s shares are cheap. The key thing is to find cheap stocks that are undervalued relative to what they should be be priced at.

If you can find a company with a strong balance sheet, with a good cash position, healthy revenues and decent profits, but with a share price that seems low, then you’ve probably found just such an undervalued stock, in which case it is probably worth investing in.

Ask yourself the question why is the stock priced low. If it’s for some inconsequential reason like a recent management change, a particularly strong competitor, the company not having the latest “hot product” or the sector itself being unfashionable for example, then you could be on to a winner. Whereas if the problems go deeper, such as heavy falls in revenues, profits turning to losses, significant debts, etc, then you are best to steer clear.

If you stick with the fundamentals and buy shares in healthy companies that just happen to be a little under priced right now, you will find that over time things will balance themselves out, the company’s price will get back in line with the market and your portfolio will benefit as a result.

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eToro Forex Trading System

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Exchange Money Conversion to Foreign Currency (Photo credit: epSos.de)

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Other Popular Forex Trading Systems

Pips Wizard Pro

Other Popular Forex Trading Systems: Forex Global Trading Group

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International Currency Money for Forex Trading
International Currency Money for Forex Trading (Photo credit: epSos.de)

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