May 2018 – Forex PFA

Understanding Forex Trading – What Is Stop Loss

Posted on May 28, 2018 by blogger

In Forex trading, knowing where to place stop loss is a major ingredient for success. A good number of traders neglect this essential aspect of trading and end up causing a lot of unnecessary damage to their trading accounts. Stop loss refers to an order placed in the market to prevent you from incurring losses if price goes against you. When in a long position, a stop loss order is usually placed some distance below the point of entry. And, when in a short position, a stop loss order is usually placed some distance above the point of entry.

There are various methods you can use to set stops, some of which are equity stop, volatility stop, and chart stop. Equity stop, also referred to as percentage stop, is the most common type of stop and it uses a predetermined fraction of a traders account to compute the distance the stop loss order should be placed from entry. For example, you can be willing to risk 3% of your account in a trade; thus, you will use this position size in computing where to place your stop loss order.
Volatility stop refers to placing a stop according to the amount a market can potentially move over a given time. This method ensures the right stop loss levels are placed so as to prevent being taken out of a trade due to the random rise and fall of price. For example, if you are using the swing trade strategy and you want to trade the EUR/USD, you will not place your stop loss at 20 pips. This is because EUR/USD moves by about 100 pips each day.

Chart stop is placing stops according to what the charts are saying. A good way of achieving this is placing stops based on significant support and resistance levels. When you place stops beyond support and resistance levels, you can rest assured that your stops cannot be hit because they can potentially hold price from pushing through them.
In conclusion, stop losses are of essence in cutting down your losses when trading currencies. Regardless of what the market does, if you have a correctly placed stop loss order, you wont be spending sleepless nights. The Forex market is usually very dynamic in nature, so you never know when price will turn against you. Therefore, it is important to put some preventive measures in place. Or, is prevention better than cure?

Confused on Forex Trading Get Tips from Forex Books and Forex FAQs

Posted on May 22, 2018 by blogger

If you’re curious about what currency trading is all about, then you want to use the forex FAQs and different forex books to answer your questions. Actually, even when you think you already know all there is about forex currency trading, it still pays off to read, read, and read some more. Learning never stops when you engage in forex trading. Even the tiniest bit of data shall be helpful especially if you can apply this to your trade and how you will do your business. A lot of knowledge can be found in blogs, books or business magazines.

But is it possible to learn too much? There are actually instances when some people who were so good with theory, failed in trading because they didn’t know when to jump in! Filtering the data is necessary so that you’re going to know very well what to use and when to make use of it. Through this, you’ll be able to form your own foundation so that you could have more knowledge and skills in the currency market.

For new traders, seeking help in the forex FAQs can be an efficient way to learn the trade. If you happen to be wondering where the main forex is, this would let you know that there’s none because it’s always a transaction between the buyer and the seller and basic information like hours of operation may also be found in the forex FAQ’s (it is actually open 24/7). If there are terms that are unfamiliar or new to you, then you can seek help here, it has a collection of terminologies that may help you understand the forex market better.

The seasoned trader still needs to learn a whole lot plus they could possibly get the needed information with the use of ebooks and forex books that are constantly updated. There are numerous websites and books that you can find regarding day trading, risk management, technical and basic analysis, comprehensive business strategies, fair trading, and a whole lot more. You can learn a great deal from the experts if you happen to read these books. Learning everything will offer you an edge and can allow you to trade with confidence.

If these Forex books and Forex FAQs are used, then this would serve as a bonus to the novel trader. These are fantastic caches of knowledge that will let you adopt as well as personalize strategies and techniques bolstered by updated information that are utilized by the masters in forex trading.

Forex 3 Best Tips

Posted on May 18, 2018 by blogger

You may have heard that 90% of forex traders lose their money during the first few weeks of forex trading.

Does that mean that the FX market is not a very good alternative investment? Are 90% of traders not up to it?

The problem is that many forex investors come into trading carrying extremely big expectations that they can be forex millionaires overnight. In doing so, these traders have the wrong approach and a misguided attitude in trying to make profits from trading currencies.

There are 3 major mistakes newbie forex traders make which contribute to them losing their money early on.

They are as follows:

1. Impatience

There are times when a forex trader is his/her own worst enemy. He has a trading strategy. He has a trading plan – so how can things still go so wrong?

When inexperienced traders cannot wait for a proper set up they get very impatient. But the market cannot be dictated upon. It is a forex trader’s job to read the market, not anticipate it movements.

When a forex trader gets ahead of the market and tries to predict what the market is going to do next without clear indications from technical analysis, that it the beginning of a downfall.

2. Overtrading

Most FX traders new to trading get excited. Strategies that have been successful using demo accounts, they are eager to implement in the real market. They don’t want to miss any oportunities to make money. Trade after trade, they enter every chance they see. Before they know it, they’re holding far too many positions.

Their strategies demo trading are sound, but they are trigger happy and can’t help entering positions in every currency pair they see. Thus, they overtrade.

When open positions have added up, and the floating losses, which otherwise would have been acceptable, are now applying pressure to a newbie’s account, strategy can go out of the window.

3.Over-Leverage

Leverage is good – it’s what makes trading the FX lucrative. Conversely leverage can hurt you badly too if you don’t take care.

Mathematically it it possible to become rich overnight and it is leverage which makes it possible to multiply your account several times over in a very short time. But statistically, the double-edged sword that is leverage can also wipe out your account’s equity in no time at all.

Lack of a risk management strategy and pure greed will eventually lead to over-leveraged positions in your forex account. When this happens, the dreaded term ‘margin call’ is never far behind.

The be successful in forex trading you must have the correct attititude. Have a plan. Manage your money and be disciplined.

Forex Trading – Mapping Out Your Pip Start

Posted on May 14, 2018 by blogger

You have a strategy, but, do you have a plan? When you know what you want to achieve with your forex trading, you should put everything in a plan and have the discipline to follow your plan. This is the only way you can be profitable in the forex trading business. You can certainly make profits from short-term trades without any plan, but you can not keep on doing this without exposing yourself to the potential of losing for reasons you will most likely be unaware of. If you are serious about forex trading, you should start drawing up your trading plan.

Your trading plan should keep you on track despite market movements. You do have to stick to your plan if you are to be a successful forex trader. Any plan would be no good if you do not follow it. A good plan should include not only calls for a market that is moving in one direction. It should also include a contingency plan for when the market moves in a direction opposite to what you projected. This way you are able to cut your losses to a minimum while still enjoying the possibility of yield from your other forex trades.

Any trading plan you draw up should be based on your own forex trading personality and style. Once you have chosen your trading methodology and put it into your plan, do not undermine it by second-guessing yourself. Having a plan that you do not follow can result in losses and missed opportunities.

Timothy Stevens is a Forex Options Trader who owns – He has helped hundreds of people on Trading Forex with Options.

He has recently developed a free e-course showing you a step by step process for starting your Forex Trading easier. To learn how to start Forex Trading with Options without wasting your time and losing more money, visit

Forex Market – The Basic Knowledge

Posted on May 9, 2018 by blogger

You can take the advantage of the forex market which opens 24 hours a day for 5.5 days a week as you may be already aware of. But this is different with the stock market where they open only during business hours. So trading forex even at 2 AM is very feasible.

The next big difference is the non-centralised market. Meaning that you can trade from anywhere in the world as long as you have a computer and an Internet connection. In addition to that, unlike the stock market where you can only gain profit from up-trend market, in forex you can make profit from either up-trend or down-trend market.

Having the right mindset in forex trading a must-have trait for any trader who is starting this business. It will also be the first lesson that you will be taught on by forex experts. The currency market is a huge market even when it is compared with all the US stock market combined, it is still a lot bigger. Every day, the foreign currency market trades around 3 trillion US dollars.

You must also keep in mind that there is no 100% accurate in forex dictionary. Not a single forex trader can score 10 out of 10 winning trades. All the indicators and analysis techniques are only there to help you predict the market movement.

In forex, buying one currency means selling the other. You can never buy one currency without selling its other pair. So in USDGBP pair, when you buy the USD, it means you also sell the GBP. Buying or selling only a currency in forex without selling or buying the other pair is just not possible. Also, unlike the stock market, where you need to wait for someone who is willing to buy your selling position to successfully sell your stock, in forex this will be done almost instantly. Since there will always be someone who is looking to buy your position because of the size of the market.

Last but certainly not least, the forex market is all liquid, which makes depositing and withdrawing a lot easier than the stock market. This is certainly one of the most intriguing traits in forex for new investors.