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The content has been prepared by Traders4Traders Inc, which is the training arm of T4TCapital, for general information and educational purposes only and is not (and cannot be construed or relied upon as) personal advice nor as an offer to buy/sell/subscribe to any of the financial products mentioned herein. No investment objectives, financial circumstances or needs of any individual have been taken into consideration in the preparation or delivery of the content. Financial products are complex, entail risk of loss, may rise and fall, and are impacted by a range of market and economic factors, and you should always obtain professional advice to ensure trading or investing in forex instruments is suitable for your circumstances, and ensure you obtain, read and understand any applicable offer document.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
Factors like interest rates, trade flows, tourism, economic strength, and geopolitical risk affect supply and demand for currencies, which creates daily volatility in the forex markets. An opportunity exists to profit from changes that may increase or reduce one currency's value compared to another. A forecast that one currency will weaken is essentially the same as assuming that the other currency in the pair will strengthen because currencies are traded as pairs.
Just like stocks, you can trade currencies based on what you think about its value (or where it goes). But the big difference with forex is that you can trade up or down just as easily. If you think that the currency will grow in value, you can buy it. If you think it will decrease, you can sell it. With such a large market, finding a buyer when you sell and a seller when you buy is much easier than in other markets. You may have heard in the news that China devalues its currency in order to attract more foreign business to its country. If you think that this trend will continue, you can make a deal in the Forex market by selling Chinese currency for another currency, say, the US dollar. The more the Chinese currency depreciates against the US dollar, the higher your profit. If the Chinese currency rises in price when you have a sell position, your losses grow and you want to exit the trade.
High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.
Confirmation bias is the one factor that is most common amongst professional traders. Looking for information that will support a decision you have made, even if it wasn't the best decision, is simply a way of justifying your actions and strategies. The problem is that by doing this, you're not actually improving your methods, and you're just going to keep making the same trading mistakes. Unfortunately, this can create an infinite loop in Forex trading psychology that can be difficult to break.
Forex trading, also known as forex, currency or currency trading, is a decentralized global market in which all world currencies trade. The forex market is the largest and most liquid market in the world with an average daily trading volume exceeding $ 5 trillion. All of the world's combined stock markets do not even come close to this. But what does this mean to you? Take a closer look at Forex trading, and you may find some interesting trading opportunities not available with other investments.
Challenge: Banks, brokers, and dealers in the forex markets allow a high amount of leverage, which means that traders can control large positions with relatively little money of their own. Leverage in the range of 100:1 is a high ratio but not uncommon in forex. A trader must understand the use of leverage and the risks that leverage introduces in an account. Extreme amounts of leverage have led to many dealers becoming insolvent unexpectedly.
The Aussie dollar is very dependent on the price of gold, as Australia is the 2nd largest gold producer in the world. If gold prices fall, this means Australia is getting less money for that gold, and generally the Aussie dollar will weaken in these circumstances. If gold prices rise this is great for Australia and their dollar will normally strengthen with the rise in the price of gold.
This is great, as the markets are open so long, we can enter or close a trade whenever we need to, whereas if you were trading stocks on the NYSE you can only trade during market hours, and once the market is closed you have to wait until the next trading day to trade your position. This forex help tip can really save you when there is a big unexpected political or news release and you need to close your position right away.