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How Much Money Do You Need To Start Trading in Forex Market ? – NewsDio

Every time someone decides to embark on a new business in their life, it is common that several questions come to mind, how am I really ready to do it? Do I have the necessary knowledge and determination? Will I be able to handle it properly?

Every time someone decides to embark on a new business in their life, it is common that several questions come to mind, how am I really ready to do it? Do I have the necessary knowledge and determination? Will I be able to handle it properly?

And anyone looking to get started in the world of trading usually has these same questions. Also, the most common question that anyone who wants to enter the world of financial markets has is how much money do I need to start trading in Forex

As with any other type of business, the result can vary depending largely on the investment made, since it is not the same to start a business with a debt free capital to start it by mortgaging your home and owing money to several people. This will give you more room for maneuver as it will help you endure the first few months while the business begins to deliver the expected benefits. And the same goes for trading, it’s not the same to start trading with $500 as it is to start with $5000.

However, answering this question is really very complex, because estimating an amount that answers the question is complicated, as there are several factors that influence it. The main factors that will determine how much money you should start trading with are the strategy you plan to use, how much knowledge you have about the market, and your economic situation. 

Nowadays we can get many brokers who require a really low minimum deposit like on fxdailyreport, so you can create an account and start trading Forex with little money. Moreover, this represents a great advantage because if you don’t have a large capital, no problem, you can start operating with little money, and gradually learn. 

In fact, it’s highly recommended to start trading Forex with little money, and as you try your strategy and acquire more knowledge you can increase the capital according to the results you have.

The money you need to start trading forex trading is associated with your expectations, whether you want it to be your main source of income or a secondary source. To achieve your goals, it is recommended that you start operating with small amounts that you feel comfortable with and free from pressure. 

Start trading with an amount that you can risk and that does not affect your budget at all, this means, that it’s money that in case you lose it doesn’t affect your economic situation. This way you can trade with peace of mind and without the pressure of needing that money, so you can start trading, learning and improve your strategy.

That is why the optimal amount to start Forex Trading is different for each person, because everyone has a different financial situation and expectations.

One of the keys to success in the financial markets like Forex is to invest money you can afford to lose. So if you’re looking to trade to solve a moment of economic urgency, the chances of you losing your money are really high, because you can’t operate with total peace of mind as you will be constantly under pressure in every operation you make, and is likely to make very hasty decisions to be very concerned about losing your money.

The main thing when starting Forex Trading is to survive. Try to hold out as long as possible, learn as much as you can about each trade you make, and you will improve your trading strategy, and eventually start making a profit.

However, there are many experienced traders with long careers in financial markets who claim that it isn’t a good idea to enter Forex with less than $10,000. This is a bit ambiguous because as we mentioned before, everything will depend on the expectations and budget of each person. 

Although this idea of entering with $10,000 as a minimum is based on using between 2 to 5% in each operation, this strategy requires a lot of knowledge and especially discipline, since its success is based on having long term gains with a minimum risk. Therefore, it’s essential for a beginner to have discipline and avoid risking more than expected and end up losing all his money.

It’s very important to be disciplined to start Forex Trading, because it’s very common for novices to invest 10, 15 or even more than 20% of their capital in a single trade, and this can lead them to lose all their money in one or a few trades.

Therefore, if you want to enter this world of trading, it is advisable to learn as much as you can, and practice your strategy in demo accounts first, also, if you have the possibility of having someone who has experience and can guide you in the process would be perfect.

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Daily Financial News

Don’t Count On JPY Correction; Staying Long GBP/JPY

The path of the potential pace of the JPY decline may still be underestimated by markets, which continue trading the JPY long.

While the 10% USDJPY advance from September lows looks impressive from a momentum point of view, it may no thave been driven by Japan’s institutional investors reducing their hedging ratios or Japan’s household sector reestablishing carry trades.

Instead, investors seemed to have been caught on the wrong foot, concerned about a sudden decline of risk appetite or the incoming US administration being focused on trade issues and not on spending. Spending requires funding and indeed the President-elect Trump’s team appears to be focused on funding. Here are a few examples: Reducing corporate taxation may pave the way for US corporates repatriating some of their USD2.6trn accumulated foreign profits. Cutting bank regulation could increase the risk-absorbing capacity within bank balance sheets. Hence, funding conditions – including for the sovereign – might generally ease. De-regulating the oil sector would help the trade balance, slowing the anticipated increase in the US current account deficit. The US current account deficit presently runs at 2.6% of GDP, which is below worrisome levels. Should the incoming government push for early trade restrictions, reaction (including Asian sovereigns reducing their holdings) could increase US funding costs, which runs against the interest of the Trump team.

Instead of counting on risk aversion to stop the JPY depreciation, we expect nominal yield differentials and the Fed moderately hiking rates to unleash capital outflows from Japan.The yield differential argumenthas become more compelling with the BoJ turning into yield curve managers. Via this policy move, rising inflation rates push JPY real rates and yields lower, which will weaken the JPY. Exhibit 12 shows how much Japan’s labor market conditions have tightened. A minor surge in corporate profitability may now be sufficient, pushing Japan wages up and implicity real yields lower.

JPY dynamics are diametrical to last year . Last year, the JGB’s “exhausted”yield curve left the BoJ without a tool to push real yields low enough to adequately address the weakened nominal GDP outlook. JPY remained artificially high at a time when the US opted for sharply lower real yields. USDJPY had to decline, triggering JPY bullish secondround effects via JPY-based financial institutions increasing their FX hedge ratios and Japan’s retail sector cutting its carry trade exposures. Now the opposite seems to be happening. The managed JGB curve suggests rising inflation expectations are driving Japan’s real yield lower. The Fed reluctantly hiking rates may keep risk appetite supported but increase USD hedging costs.Financial institutions reducinghedge ratios and Japan’s household sector piling back into the carry trade could provide secondround JPY weakening effects

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Daily Financial News

Mexico raises interest rates, cites Trump as risk

The head of Mexico’s central bank says U.S. Republican candidate Donald Trump represents a “hurricane” sized threat to Mexico.

Banco de Mexico Gov. Agustin Carstens told the Radio Formula network Friday that a Trump presidency “would be a hurricane and a particularly intense one if he fulfills what he has been saying in his campaign.”

Trump has proposed building a wall along the border and re-negotiating the North American Free Trade Agreement.

Mexico’s central bank raised its prime lending rate by half a percent to 4.75 percent Thursday, citing “nervousness surrounding the possible consequences of the U.S. elections, whose implications for Mexico could be particularly significant.”

Mexico’s peso had lost about 6 percent in value against the dollar since mid-August. It recovered slightly after the rate hike

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Financial News

Africa’s first Fairtrade certified gold co-operative offers hope to gold miners living in poverty

Syanyonja Artisan Miners’ Alliance (SAMA) has become the first artisanal small scale mining co-operative in Africa to become Fairtrade certified, bringing much needed hope to impoverished communities who risk their lives to mine the rich gold seam that runs around Lake Victoria.

SAMA is one of nine previously informal groups from Uganda, Kenya and Tanzania which has benefitted from a pilot project launched by Fairtrade in 2013. This innovative program aims to extend the benefits of Fairtrade gold to artisanal miners across East Africa.

In that short time, SAMA has undergone training in business and entrepreneurship, as well as safe use of mercury, internal control systems, labour rights and better working conditions, health and safety and more. Previously, daily contact with toxic chemicals used to process gold meant members risked disease, premature births and even death.  Fairtrade gold was first launched in 2011, and SAMA now joins Fairtrade certified gold mines MACDESA, AURELSA and SOTRAMI in Peru.

The co-operative produces just 5 kg gold per year, but nevertheless has the potential to significantly benefit many people in the local community through better conditions through certification. It is expected that Fairtrade and organizations like Cred Jewellery will support the miners, ensuring their gold can be refined and made available to jewellers in the UK and other markets.

Gonzaga Mungai, Gold Manager at Fairtrade Africa said: “This is a truly momentous and historical achievement and the realisation of a dream that is many years in the making. Gold production is an important source of income for people in rural economies. Congratulations to SAMA, it sets a precedent which shows that if groups like this can achieve certification, then it can work for others right across the African continent.”

The Fairtrade Gold Standard encourages better practice and changes to come in line with international regulation around the production and trade of so-called ‘conflict minerals’. Under the Standard, miners are required to:

  • Uphold a human rights policy preventing war crimes, bribery, money laundering and child labour
  • Clearly represent where the minerals were mined
  • Minimise the risks of conflict minerals through robust risk assessments and collaboration across supply chains
  • Report to buyers and trading partners regarding the risks of conflict minerals

Now in its second phase, the programme will focus on supporting other mining groups in the region to access affordable loans and explore a phased approach to accessing the Fairtrade market, allowing more mining co-operatives across Africa to participate in the programme.

Gonzaga added: “Sourcing African metals from smallscale miners in the Great Lakes Region is the responsible thing to do. For a long time companies have avoided buying gold from this region, with devastating consequences for impoverished communities who were already struggling. It has driven trade deeper underground, as unscrupulous buyers pay lower prices and launder illegal gold into legitimate supply chains. That’s why we have chosen to work with these groups to help them earn more from their gold within a robust compliance system that offers social, environmental, and economic protections.”

The Fairtrade gold programme offers a small but scalable solution to sustainable sourcing of gold from the region in line with Section 1502 of the Dodd-Frank Act in the US, OECD Due Diligence Guidance and recent EU Supply-Chain Due Diligence proposals which could come into effect in 2016. This means that up to 880,000 EU firms that use tin, tungsten, tantalum and gold in manufacturing consumer products could be obliged to provide information on steps they have taken to identify and address risks in their supply chains for so-called ‘conflict minerals’.

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