Page 191 – XTrade

Why Learn How to Trade Currency in Today’s World

Many people are not fully aware as to why they should learn how to trade currency. Most notably, they haven’t noticed how the forex market impacts non traders.

Why Learn How to Trade Currency and Stay Ahead

Most people don’t feel an urgency to learn how to trade currency as they don’t have an appetite for risk, and for quick investments. Mistakenly believing that markets are too risky and offer too little a reward. This is all because people have been conditioned to think in terms of absolute, isolated numbers. So that for example a losing $100 trade in the US dollar, through a forex account, represents a painful loss. But yet a physical currency conversion of $20,000 which also includes that $100 loss, goes unnoticed. And yet, both trades are deep down identical, and the same market conditions caused that $100 loss in both cases. As currency trading takes place through the global forex currency converter mechanism, does impact each and everyone of us, being a trader or not. This is because we all at some point have to buy foreign currency, to spend in a foreign country, and we all buy goods whose price is affected by forex. This is even more profound in the case of mortgages taken out in a foreign currency, other than the one the actual property is in. In this case, real estate investors actually do a lot of research into various currencies available. The objective is to find either stable, lower interest rates, or variable interest rates and falling overall currency strength. If the mortgage currency is set to fall against the currency of their income, this will mean many years taken off the mortgage.

Why Learn How to Trade Currency on Various Frames

Learning how to trade currency on various time frames offers much more flexibility and opportunity for a profit, than it would otherwise be possible. As in the case of foreign currency mortgages, where the trend of the currency in question is never straightforward to figure out, over any period of years. Investing in foreign currency can be so much more exciting and fascinating than boring day to day fluctuations. Typically, a foreign currency will trade up or down, and then sideways for several years. When the entire period is broken down into annual and quarterly time frames, the real estate investor can use more tailored trading techniques. And in so doing, they are able to hedge risk, avoid adverse market movements, and also trade some very brief movements for a direct profit. In fact, the wise real estate investor is never tied to any one single country or numismatic zone. Rather, they are looking to benefit from currency price fluctuations and even from interest rate differentials. Real estate is a real, risky and yet fascinating way to invest. But with forex trading, the wise real estate investor can dramatically increase profitability and minimize risk.

Which Online Forex Trading Platform is Best for You

Choosing an online forex trading platform for best efficiency and results. It all boils down to comfort and account management, then trading is set to go well.

Which Online Forex Trading Platform to Choose

Choosing an online forex trading platform boils down to personal preferences, comfort and trading efficiency. When one takes care of these things, then trading is set to go well, and the trader will only have to worry about the markets they trade. Online trading is difficult for everyone, especially for beginners, and even more so during volatile market hours. Stocks tend to be very volatile sometimes. And currencies too are volatile and confusing at least during certain hours in the trading day as one exchange is closing and another is preparing to open. Having the best forex trading platform when trading currencies, can help avoid making mistakes and still trade fast, as those fast moving markets often require. Volatility will always be there, in all markets, and the forex market in particular is deceptively simply to trade as volatility comes and goes, without warning. It is important that traders are able to place new trades fast, and also place contingent stop and limit orders just as fast. Speed is critical in today’s forex market, but also it is critical to make use of overnight contingent orders as the forex market never sleeps. Failing to bother to study and trade the overnight moves in currencies, results in missing out too many profitable trades. So overnight, unsupervised trading is something that every good trading platform should facilitate, in order to implement a good and profitable forex trading plan.

Online Forex Trading Platform for the Busy Trader

The online forex trading platform a busy trader needs, should be one that facilitates everything from day trading to overnight, unsupervised forex trading, and even commodity trading. Every busy trader who has learned how to trade forex and wants to trade various markets, is a busy investor trying to study the markets every day. The objective is to be a specialist, even if they trade 3 or 5 different markets, so each market requires different research. But only one market may be available and suitable to trade at any one time. So 3 or 5 markets will provide flexibility and new trades at any one time, without the trader losing focus, because only one market can be traded at a time, most of the time. Occasionally, they might have to trade 2 or 3 of these markets in the same week, but even so, they can still remain focus quite well. The trading platform, when good, makes it possible to check all open trades at a glance, and adjust all necessary contingent orders accordingly, without excessive stress. It is also good for the trader, that the platform provides embedded calculators and tools. To help with the fast numerical calculations needed in fast trading.

Day Trading Online for a Living

Day trading online for a living is a hard goal to reach. As markets change from day to day and from month to month, all experience is put to the ultimate test.

Day Trading Online is Tougher than Most Think

Day trading online in an effort to make a full living is exceptionally hard, perhaps much harder than other ways of trading. This is all because there is a constant pressure to make money trading online, over the course of the day. This very urgency to make money ends up sabotaging traders and makes them trade impulsively, emotionally, and not at relaxed pace. There is a minority of traders who are successful, but nobody else really knows how that is possible. Those who can and trade profitably, on a consistent basis have developed extra senses for dealing with the financial markets. Many of these people make money day trading forex, and other popular markets. But their techniques are not popular in any way. In fact, many of them do all kinds of crazy things that most traders would never do. Things such as adding to a losing trade, buying new lows, selling new highs, or even not using stops at all during certain trading hours. These are all rules that most traders would never break, and their firm beliefs in discipline and risk avoidance keep them unable to master day trading. It makes no difference if one follows the best tips and advice available on day trading. If a trader is not capable of trading profitably in longer term time frames, then they will certainly fail in day trading.

How is Day Trading Online Possible Then

Day trading online is only possible when one thinks as a daredevil, and outside the box. In an original way, and without treating trading very seriously. But because successful trading is synonymous with professional achievement, and professions are about taking things very seriously, traders end up failing. Most jobs are about serious work, and a lot of devotions, but there’s no much uncertainty to worry about. When it comes to trading, uncertainty is too large so as to allow for rational thinking and taking things very seriously. The trader simply doesn’t have much control over their trades. So placing too much rigid faith in a trade or opinion, is wrong. Day traders who are successful, take things lightly and they know that at least 50% of tips, opinions, indicator readings and trades will be wrong. They bear that 50% in their minds, at all times. They focus instead on getting out of losing trades early enough, and planning the next trade without crying over the previous loser for too long. Even when using the best forex trading platform, currency day traders, no matter how successful, never forget the 50% expected fail rate. They look for few good trades and that’s about it. Even with a minority of profitable trades per week, and by breaking all possible rules, one can end up making $50,000 a year. There is no much logic involved like there is in swing trading or investing. Day trading when profitable is irrational and nonsensical.

Guide to Understanding CFD Trading

How does CFD work in principle, and why is the trading so much more beneficial as opposed to trading through Futures or Options, or the spot market itself?

How Does CFD Work in Real Life?

Many traders may not actually know how does CFD work in real life, but CFD contracts or Contracts For Difference as their acronym means, are a very efficient way for trading the financial markets. Some traders know what is CFD trading, but only on the surface, and only because some vendor or broker advertised CFDs for their high and affordable leverage. But deep down, CFD trading platforms offer unparalleled advantages over the spot market, and even more over Futures and Options trading. For stock traders for example, CFDs bypass all short selling restrictions, at all times, and allow stock traders to short stocks for unlimited protection without any restrictions, that is critically important some times. CFDs offer unique linear pricing, one way liquidity and trading performance which works like magic, for trading up to $100 per point. On the other hand Futures are not linear, and cannot be use for accurate hedging trades. And then, there are Options, which are ultra complicated, most of the time are not linear at all, and their pricing follows pricing models which are too complicated. And though Options are good for some advanced trading, they are simply useless for day to day trading, because it take a massive market movement for the trade in question to just break even. CFDs are linear, the trader stand to make a profit as soon as the market moves in their favour, no ifs and no buts. Even some highly skilled and proficient Option traders use hybrid trading techniques today, combining both Options and CFDs, because CFDs provide the flexibility and linearity that Options themselves fail to provide.

How Does CFD Work Really

All traders who use CFDs, know how does CFD work in real life. CFD trading is all about trading the difference in price, in the underlying market, over a period of time where that price has changed. But because no physical trading takes place in regards with the underlying market at that very time, it results in one way liquidity. Where the trader has perfect access to the open market, through the collective CFD brokerage industry. But the adverse volatility waves of the open market cannot create problems to the CFD trader, because they are protected by the very nature of these instruments. CFD trading is very reliable, and has become the real market. Especially in the case of stock trading, the CFD market is more stable and more dependable than the spot stock market itself. And that’s why one can short stocks through CFDs even when stock exchanges impose short selling restrictions, which is truly amazing. Reliable trading goes beyond short selling, and is an everyday reality throughout the year, all because of the good and fast way that brokers handle trades.

CFD Tips for Commodity Traders

Low risk commodity traders always seek new opportunities. Good CFD tips can help them implement their trading ideas, at less risk, without impacting profit.

CFD Tips for Commodity Traders

Wise commodity traders rely on low risk trading, few CFD tips, and generally trades having limited risk over some period of time. Commodities do offer periods of low risk trading, either because the downside is limited as prices have dropped too much, or limited upside risk because demand is limited. Those good tips come in handy in cases where the commodity trader needs to hedge an open trade, and play the market both ways until short term risk goes away. Risk that comes due to volatility is also opportunity, so it is a good idea to trade the market both ways. Trading CFD contracts doesn’t have to be complicated, but it is a good practice to consider hedging, quite often, especially when the commodity in question makes a huge unexpected move. CFDs offer linear hedging which Futures cannot offer. And by hedging the trade for up to few days, the trader is able to assess the market with a clear mind, as opposed to using very tight stops, and no hedging at all. Good commodity traders know their markets, they know they will be subjected to volatility, and unforeseen risks, they therefore use large stops and hedging trades together. This is the best way to mitigate against the effects of uncertainty and volatility, which typically in commodities do not last long. The trend in a commodity is either up or down over a period of 10 to 15 days. As opposed to stocks or some currencies, where it can be really difficult to figure out price direction for days and days on end.

Best CFD Tips Win out

Some CFD tips for commodities really do win out over any other trading tips seen in other instruments. For example, the linearity and flexibility of CFDs far exceed that of Futures and Options. At the same time, they come with ease of use, simplicity and inspire confidence in the trader. Most CFD trading platforms are easy to use, as opposed to the ultra complicated Option trading platforms, where complexity can never be removed and very few can understand and track instrument pricing. Investing in foreign currency through CFDs is also a good idea, for long term objectives. And even more so in commodity currencies where the trader will have an advantage through knowledge of trend in the underlying commodity. This single tip is among the most powerful tips that all CFD commodity traders ever learn, or figure out on their own as they gather experience. Commodity currencies help set rock solid trends in correlated currencies, and this helps avoid all kinds of nonsensical technical signals that show up on other related market charts. Price will always follow the trend of the underlying commodity, and all conflicting signals will be wrong, it’s that simple.

Using a CFD Guide for Trading

Using a CFD guide for trading better is a good idea. As long as one has already set their goals on the financial markets. As guides do not set these goals.

How to Use a CFD Guide in Trading

A CFD guide can be handy, because it provides all the basic information around the benefits of CFD contracts, which make them stand out over other contracts. But beyond that, the trader themselves have to figure out what they want to gain out of the markets, and they have to both greedy and realistic at the same time. To set realistic goals in trading, one has to already have some trading experience and be looking to take into account losses, failures and successes, as the basic road map to setting their final or long term goals. Traders who have some experience and know what is CFD trading, are at an advantage, but they too need to use a basic guide, and to see the real benefits of CFDs. Online CFD trading has been popular many years now, and yet most traders are sold on the promise of high leverage and affordable trading, as well as low risk commodity trading. While the other advantages of CFDs go unnoticed. Commodity trading is in fact low risk trading, most of the time, and sometimes it can even be extremely low risk. This is simply because the downside potential in the price of some commodities is very limited, for many months ahead, not for any other reason. And CFDs simply make the buying in those commodities very affordable. But a good guide on CFDs can show the trader how to take things further, by implementing linear hedging, and by trading even those already low risk commodities both ways, not just trade on the long side.

A CFD Guide Can Take Things Further

A good CFD guide is also good for traders who want to make the most of their CFD trading platforms. All good guides on CFDs will show the trader how to set contingent orders, and how to keep their account in control, all through a single trading platform. It may sound like a logic, simple thing to do, but most traders who attempt to move onto to serious commodity trading without any guidance whatsoever, end up missing important details. As a result, these traders become overconfident of themselves, over the wrong trades and for the wrong reasons. When does one become overconfident? When they win! And that’s where they start to become complacent, until one day all trading begins to go wrong. So knowing how to hedge an open losing trade, or place a stop loss order, is just as important as picking entry and exit points in the market. Because volatility is bound to change, and when it does, only the prepared minds can handle it well. Generally speaking, commodities and CFDs are a great combination, because traders do have an overall better chance to make some profit, over any period of time. When good guidance is provided, then the chances are even greater.