Leverage essentially means having the ability to control a large sum of capital using very little of your own funds and borrowing the rest. When you buy a house on credit i.e. a mortgage, for example, you are actually trading with leverage. Say you put a 25% down payment of $50,000 on a house worth $200,000, you are effectively using leverage here!
Statistics say that hardly 2% of traders actually make the cut. The remainders of the 98% are merely a flash in the pan. Some traders give up at the first taste of failure; others continue to spend money in hopes of finding the 'Holy Grail' of trading.
The world of forex is full of excitement; it gives traders the possibility of controlling huge amounts of money without the need to invest a lot of their own capital. The old industry saying of 'buy low, sell high' – when done right – can be extremely rewarding..
Even the best forex traders in the world have losing trades - losing is a part of trading - but how do you react when you lose? How do you feel? If you're angry or sad; chances are you were risking too much, or taking a trade you knew you shouldn't - or both.
Have you ever found that your trading system works great one day but fails miserably the next? Your problem is quite possibly market type identification. Too many Forex traders will trade the same way no matter what the market is doing. Instead look to identify the market type first, and then devise a strategy appropriate to that market type.
How to catch better entries with the Head and Shoulders Pattern? In this series of articles learn the different ways you can trade the head and shoulders chart pattern. The first part of this article deals with setting more realistic target levels on the head and shoulders pattern.
Using oscillators is very prominent in the world of trading, whether you are just beginning or have been trading professionally for years. Oscillators are based on math formulas and are categorized as inductive statistics. In forex, they make up a vital part of technical analysis since they are used to confirm market trends, signal when a trade is being overbought or oversold under extreme conditions, and also inform the trader when the market's movement is about to reverse due to loss of momentum.
ActionForex.com was set up back in 2004 with the aim to provide insight analysis to forex traders, serving the trading community over a decade. Empowering the individual traders was, is, and will always be our motto going forward.