Trading foreign currency exchange is not your typical 9-to-5 job, nor is it your normal investment activity. First of all, the days of the week are arranged differently. Monday doesn’t really count and Friday slides rapidly into the weekend. But, you better be really alive and prepared to go almost around the clock, starting with Tuesday morning! That’s when most major economic announcements and central bank press conferences kick in – and, trading can run very hot and heavy for hours. As an individual trader, the way you can get ready for this is to look at the global economic calendar (located somewhere on your trading platform or by going to “worldeconomiccalendar.com”) and decide which occasions interest you the most. Then, depending upon what your charts are showing you, launch your trade(s).
“Day trading” does not involve as much risk as Hollywood would like you to believe. Properly done, you’re not in the market long enough to get hit by anything radically adverse. And, you’re always using stop losses.
Why Foreign Currency Exchange Is Such A Profitable Activity
Trading foreign currency exchange is profitable because the world of forex is constantly on the move, exposing pricing inconsistencies that can be taken advantage of and, due to the amount of leverage available, these investment returns can be magnified far more than gains in other – more traditional – venues (such as stocks or real estate). For instance, using a leverage ratio of 100:1 means that a 1% move in the AUD/USD is equal to a 100% gain before transaction costs. So, how often does the AUD/USD move 1% in 24 hours? At least once a week (with the rest of the time, coming awfully close). But, that’s nothing compared to the GBP/AUD, which routinely clocks in at over a 2% range in 24 hours.
Key Techniques To Apply To Foreign Currency Exchange
Essentially, there are 2 ways to take advantage of this situation. Either you can sit in front of a computer, hour after hour, day trading or you can get keep your eye out for the beginning of the next big trend and hop on for a relatively long, but profitable, ride. There are merits to both trading styles. Day trading involves little risk because each burst of trading is for a very limited amount of time and, at the end of the day, you’re always out of the market. “Trend trading” involves staying in the market for days on end, using a “good initial position” and reduced leverage (i. e., a ratio of 30:1 or lower) to propel you toward profitability.
Developing Your Use Of Foreign Currency Exchange Trading Techniques
If you decide that you want to try your hand at day trading, do yourself a favour and remember that all forex trading days are not the same. Specifically, Mondays can be so volatile (or dormant) as to be worthless; and, Fridays always have an ebbing trading flow that makes getting out profitably a bit of a problem the more the sun heads for the horizon. In contrast, Tuesday mornings and Wednesday mornings are usually great – characterised by lots of funding movement, tight bid/ask spreads and great “limit order” fills. Thursdays, however, are problematic. If there’s an unemployment announcement scheduled, things can get volatile, with any “surprises” producing nasty price spikes, capable of roasting even the best placed stop losses.
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