Forex Trading: How Leverage Works

Forex MarketThe concept of leverage is very profitable in forex trading, but also can be dangerous if you are not careful in using it, especially if you are using very high leverage (over leverage). High leverage will cause the minimum margin or minimum guarantees that you pay each time fewer and fewer transactions. This will psychologically affect your trading.

One character successful forex traders are those who can eliminate the influence of emotions when trading. When people talk about the advantages of forex trading, the first time they put forward is usually a high leverage facility, or even very high. With certain leverage, you can open the tens or even hundreds of positions with relatively little capital. This can be done only by a relatively small margin collateral, and that makes one of the charms of forex trading. Nowadays many brokers that offer leverage of 1: 100, 1: 200, 1: 400 and even 1: 1000.

If you are trading on a broker with facilities leverage 1: 1000, then for a contract value of USD 10,000 (commonly called a mini lot) you only pay a margin of (USD 10,000 / 1000) = $ 10 for each transaction (0.1 lot for mini lot ), with the value per pip (pip value) as determined by the value of the contract mini lots (eg for EUR / USD with a contract value of USD 10,000, its value per pip is $ 1). Thus if your capital USD 500 and you open 30 positions (each 0.1 lot) with leverage 1: 1000, the total margin that you need only $ 10 x 30 = $ 300.

If for any position you derive profit of 10 pips, then your total profit is $ 10 x 30 = $ 300, or 60% of your capital. Conversely, if you are experiencing an average loss of 10 pips, then your loss is also 60% of your capital, and in the forex markets such events can take place in a matter of minutes, even if your broker spreads given is zero (no spread).

Psychologically, the higher the leverage you use, then you will be more brave (a lot) in open trading positions, because the value of the minimum margin that you will pay less. Just as if you are driving a car, driving with a speed of 60 km / h and 200 km / h is certainly very different in anticipation if anything happens. Semaki speed you drive, the greater the risk you face when things are not profitable. In many cases, accidents due to driving at a very high speed end in death.

Trading forex with very high leverage can be likened to driving with a very high speed. The risk is big enough. As you know that the brokers lend to you for the rest of the contract value which should be reduced to the minimum margin that you pay. In case you are trading mini lots with leverage 1: 1000, the broker lends USD 10,000 – USD 10 = USD 9.990 for every 0.1 lot (for mini lot) that you open. Have you ever wondered why the brokers do not charge interest on loans to you even if such trading position you hold for days or even weeks?

Retracement And Reversal That You Should Know in Forex

Retracement and ReversalHave you ever been in a situation where it looks like prices are likely to continue to move upwards (uptrend / uptrend) and you are getting ready to install a long position (buy orders), but what happens then is the price rebounded down and getting down?

This Situation may occur when the trader is not aware of the difference between retracement and reversal. Instead be patient and follow the downtrend (a downtrend) as a whole, traders believe that the case is a condition retracement so put a buy order.

In this article, you will learn the characteristics of a retracement and a reversal in forex trading, how to recognize it, so it is not wrong in determining the real market conditions.
What is Fibonacci?

Fibonacci price movement can be defined as the reverse direction for a while against the trend. Another way to see this is to look at the price movement area that moves against the trend but then returned to continue the trend.

What Is a Reversal?

Reversal is defined as the change in the price of the reversal of the overall trend. When turning to the uptrend downtrend, reversal occurs. When downtrend turned into an uptrend, a reversal also occurred. Using the same example above, the form of reversal can be described as follows:

What Should You Do?

When faced with the possibility of retracement or reversal, you have three choices:

When you have put the position, you can continue to hang on to your position. This can cause you to lose (loss) if retracements turned out to be a long-term reversal.
You can close your position and re-enter when the price starts to move in the direction of the overall trend again. Of course there is the possibility of loss of trading opportunities when the price suddenly moves sharply in one direction while you do not have time to install position. If you decide to re-enter, you will be charged a spread of more than one time.
You can close your position permanently. This could lead to a loss (if the price moves against you) or large gains (if you cover when the price is at the level of the top or bottom).

Since reversal can occur anytime, determine which is best is not always easy. That is why using a trailing stop loss can be a good way to manage risk when you use a trading strategy to follow the trend.

You can use a trailing stop loss to ensure profits stay where you can always get the number of pips though the situation is a long-term reversal.

Fact That Other People never told you About Forex

Fact That Other People never told you About ForexThere are several aspects of forex trading that other person does not want to disclose it to you. Especially those who are trying to sell a wide variety of expensive trading systems, brokers, and some people do not want you to know.

Today I want to tell you 6 things people never tell me when I started trading forex.

1 You do not have to be very smart to succeed in to trade

Could be one of the wrong concept that people have is they think that to become a professional trader is the person who should really smart, educated, good at math, or that has a remarkable ability to be able to profit in trading. The fact is, there are many successful traders are those who never lecture or even not finish their school. The reality is, to be truly successful trader is having the ability more psychological than technical ability as what other people off over the years. You do not need a college degree to become a successful trader, and you do not have to understand about things like calculus math. All you need is discipline and patience to make into a habit and part of your trading day.

Therefore, if you start to learn forex, you do not need to panic and anxiety because they do not understand trading systems complicated or confusing indicators.

The main thing you need to have is the ability to be emotionally and ability to control yourself, especially when you’re in a constant temptation to make you not to trade disciplines.

2. Professional trader does not consider gains in percentage

One of the ‘secrets’ largest trading forex is that non-profits in the percentage of cases. Try to think, if someone says to you that they make 100% profit in their trading last year, what exactly does this mean? That is not the case that could be a measure of the performance of their trading, the reason could be that they are just a good luck claiming professional trader when in fact they are just an amateur trader, who said that they changed the account of $ 200 up to $ 400

Professional traders usually do not provide annual performance reports of their trading to a group or groups of people that their investments. In contrast to trade them for a profit on a regular basis for each month. Professional trader draw their regular trading profit and not letting it settle in their accounts.

In actual fact, overall, the most important thing in forex trading is a risk reward, meaning that it is as much as you risked your losses and how much you download, set your profit target. For more details on risk reward this, please click on the link. Professional traders always think of this.

3 It takes time to become a successful trader

Maybe you never heard this from one already involved in the forex world. Many brokers and other people trying to sell “how accurate or secret” forex trading systems so you’d think that forex trading is simple and easy, instant, and you’ll be able to think quickly mastered.

Here I do not mean to make you discouraged, because you really CAN make money or earn profits in the forex market. I personally know several traders who succeed, where they are traders who really want to learn for hours and downs in trading them until they are able to control how trading is right, that the discipline and patience, and has a clear trading plan.

I believe that anyone can become a successful trader if they have a willingness to learn. You need to realized try to take a decision, that you will only be open trading positions when you learn the system it appears on the current market movement is in a position that you think appropriate. And you have the discipline to not risk it more than what you should be risked, where it is most traders do not discipline and almost impossible to “bow” to discipline yourself.

A professional trader understands and understands that in a few months they will get a huge profit, in a few months they might break even, or at some time they will be a little lost / loss in their trading.

4. Successful forex trader sometimes bored with what he was doing

maybe you do not want to hear that a successful trader will never get bored with what he was doing. That is not true. Each person will get bored in a given situation, regardless of the field they get into it. And it is a natural thing.

When you discipline, patience, and have a clear trading plan, you will not experience what feels like amateur trader, which is experiencing the feeling of “being above” and “being under”, meaning as excessive indulgence when a significant profit , but when their accounts are depleted, they feel frustration or results from excessive stress. Instead, a professional trader is not easily “shocked” by the market conditions they have experienced; win, lose, break even, it has become part of life in their trading, because they have to prepare all the risks and benefits (risk reward) they will face when they start to enter the forex market really is.

I’m not saying that to be a professional trader can make trading means not a thing to feel or be a great job, but at its core is a professional trader are those that do not have a ‘super emotional’; angry when they lose excess glad when they get the profit.

5 The more you think ‘need’ to make a profit in the forex market, the more weight you will feel the burden

Perhaps the best way to explain why most traders lose their money on an ongoing basis in a long time because they pressed themselves to quickly and had to get them to trade at a profit. And remember, you are the own self to blame when you lose your money; not your broker, or not your friends are telling you “Buy EUR / USD today, because it would go up!” You are the only person responsible in the forex market, is responsible for the mental and emotional health is in you.

For most traders, they get into the forex market because they thought how easy and fast to get money through forex trading. They think and dream of an independent life, can work virtually anywhere, while on holiday, and so on, if they choose to become a forex trader.

Know that the forex market is often not given hope for you to open a trading position, perhaps in a few days, weeks, even several months. Accept the fact that the forex market often does not give a great probability for you to do trading. The most important thing is how you know when it’s time to get trading, and when not to enter trading. Trader also good to know that when they are in doubt, they will not be in the forex market.

You will produce a profit in trading exactly when to trade your rare, because in line with the passage of time, you can afford on a trading plan you will be honed, discipline and patience will be formed, so you will not be hasty when you decide to get into the market forex.

6 You do not need to use the tools or sophisticated software or use multiple monitors to deter-set your trading

Most of the web sites that are not trading will tell you that you actually do not need sophisticated software or use some of the monitors for trading so that you can become a successful trader. The reality is that you can succeed in only to trade using just your laptop and use the free program, which many MT4 available on the internet. By using a laptop, make it easier for you if you often travel, and still be able to make trades, wherever you are.

The most important tool you need is to trade for yourself, especially your mind & mind (brain), not indicators software, or some number of pairs of monitors for your trading.

If you can manage yourself and mentally when you were losing the money you lost cause, surely you are approached to become a professional and successful trader to make consistent profit in your forex trading.

Social Trading Arena by WhoTrades

Prevalent Russian fiscal administration supplier and retail specialist Finam advertised the dispatch of another item and brand called Whotrades. The new brand is a social forex exchanging system permitting dealers to associate with one another and in addition duplicate their activities so as to amplify benefits.

Finam Launches Whotrades Social Forex Network

The dispatch of Whotrades speaks to Finam’s most current web exchanging try. The organization as of late uncovered that it chose to dispatch a social forex exchanging system because of the way that in the organization’s conclusion the presently existing administrations of this kind are of not fulfilling quality.

The above is particularly genuine in terms of the Russian money related exchanging business. Finam uncovered that the new Whotrades brand is pointed fundamentally at the Russian forex exchanging market anyway it would additionally go for a general worldwide vicinity too.

At this minute the site and administrations of Whotrades are as of now accessible in a sum of 21 dialects including English, Russian, Chinese, German, French, Italian, Spanish and then some. New dialects will no doubt be included based the ubiquity of the brand in distinctive nations.

New dealers enlisting at Whotrades will have the likelihood to take after different merchants and associate with them. Brokers will have the capacity to posts notices, make blog entries and in addition talk about the most recent methodologies and traps with one another.

An alternate effective gimmick offered by Whotrades permits merchants to take after one another and duplicate one another’s activities. Other than having the capacity to duplicate one another’s activities, dealers will additionally be given the likelihood to duplicate the activities performed by sanction forex exchanging experts collaborated with Whotrades.

Whotrades independently records all the supported accomplices and experts. These experts likewise have the likelihood to make webinars and other instructive material that will be offered to the merchants who have chosen to tail them.

About Finam

Like pointed out above, Finam is at this minute one of the biggest retail budgetary exchanging organizations in Russia. The main internet exchanging item discharged by the organization was Finamfx, a forex exchanging expedite that is at this minute authoritatively authorized by the Cyprus Securities and Exchange Commission (Cysec).

The new Whotrades item is essentially a development of the Finamfx brand with long range informal communication abilities. Separated from the organization’s conventional internet exchanging and duplicate exchanging administrations, at Whotrades brokers will have the likelihood to captivate into social exchanging also.

About Social Forex Trading and Copy Trading

Social forex exchanging is a generally new marvel in the forex exchanging industry. This kind of internet exchanging permits dealers to communicate with one another progressively through informal organization sort stages. Merchants will have the capacity to talk about most recent patterns and methodologies and in addition impart their exchanging history and activities to one another.

Social exchanging works best with the fusion of duplicate exchanging. Forex duplicate exchanging permits brokers to take after one another and let the product stage consequently duplicate and execute the activities performed by the individuals who were emulated. Along these lines, dealers might smoothly duplicate the activities performed by famous experts in the business.

While both of these ideas are moderately new, they are now to a great degree prevalent in the Western Hemisphere. Then again, just a lessened number of authentic Russian organizations are particular on these administrations. Finam and Whotrades mean to turn into the biggest brands in this developing business.

Plus500 Solidifies Spot in FX Industry

Eminent European forex and CFD intermediary Plus500 simply discharged its first budgetary facts report after the organization opened up to the world in July in the not so distant future. The new report uncovers an expand in incomes, benefits and profits paid out to shareholders.

Plus500 Reports Stunning Growth after Successful IPO

Money related exchanging administration supplier Plus500 uncovered that amid the first a large portion of 2013 it figured out how to create a sum of $44.7 million in incomes. In examination, the organization just figured out how to create a total of $30.3 million amid the same time of 2012, implying that incomes developed with 47% not long from now.

The organization’s primary concern net benefit amid the initial six month of this current year were of $15.4 million, speaking to an expansive expand of 59% contrasted and the same period a year ago. The normal income produced for every client in the first 50% of 2013 was of $898, much bigger than the $722 in 2012.

The report uncovered that around 50,000 dealers were eagerly taking part in money related exchanging at Plus500 amid the first a large portion of the year. Amid the first 50% of 2012 this number was of around 42,000 just. This plainly calls attention to a strong development in new merchant acquisitions.

The organization likewise published in the report that it had paid out an aggregate entirety of $8 million in profits to shareholders. This total speaks to 52% of the organization’s net wage. The wander uncovered that it would dependably pay out at least half from its net salary to shareholders in profits.

Plus500 uncovered that this execution was accomplished because of the organization’s inventive promoting program that essentially included associations with outsider advertisers and associates. Along these lines, the majority of the genuine promoting action was directed by outsider associates, permitting the organization to concentrate on the wellbeing of its real administrations.

Similarly, the new report additionally uncovered that the specialist’s working money stream of this period was of $15.7 million and that net money rose to $32.7 million, speaking to a build of 27%. New client numbers expanded with a high 22% and dynamic clients expanded with 18%.

About the Recent Plus500 IPO

Because of the fast development of the organization, Plus500 proclaimed in July 2013 that it would open up to the world through an IPO on the London Stock Exchange. The IPO brought about the organization raising $75 million that will generally be utilized on the advancement of new administrations and future extension.

This occasion made Plus500 one of the few forex specialists to ever bring this much cash up in an open advertising. The occasion likewise plainly brought up the climbing notoriety of retail fiscal exchanging administrations and online forex exchanging.

About Plus500

Plus500 is a major forex and CFD expedite that offers internet exchanging administrations in a substantial number of nations. The organization’s forex exchanging portfolio permits dealers to exchange on more than 50 unique forex money sets with no commissions and altered spreads.

Separated from forex, Plus500 gives dealers the chance to exchange on different possessions also, for example, products, stocks and lists. Dealers will have the capacity to store and withdraw cash utilizing different devices, for example, Visas, Moneybookers, Paypal and then some.