Connect with us

Industry News

Low investment, high rewards in forex trading

Show me the way! When we think of depositing into and withdrawing from our trading account, the idea is to have the former low and the latter high. But how exactly can we deposit relatively low amounts into our trading accounts with the view to make a generous return on our initial investment?

Understanding the use of leverage

Show me the way!

When we think of
depositing into and withdrawing from our trading account, the idea is to have
the former low and the latter high. But how exactly can we deposit relatively
low amounts into our trading accounts with the view to make a generous return
on our initial investment?

That is the dream
ticket, high returns on low capital investment.

This article will
highlight some key broker features to look out for to ensure you make yourself
as profitable a trader as can be.

Whether you are new
to trading or just getting started, you may want to consider a few features
that your prospective broker can offer you to boost your earning potential and
grow your portfolio.

Leverage

One core element
Forex brokers offer is leverage. Which varies from broker to broker and the
account types available.

You may be offered
high leverage going into the 1:200 mark but this may come at a premium. You may
have to pay ongoing account costs in order to have access to average leverage
so it is important to weigh up whether a broker is offering true value. Try and
find a broker which will offer high leverage options without a monthly premium.

Leverage is, in
essence, a loan within a trading account allowing investors to get involved in
markets they would traditionally be priced out of. Historically when going to
market, investors would have to come up with the full capital to buy a stock,
reserving trading for society’s elite.

For instance, a
trade worth $100,000 with no leverage would require the investor to stump up
the whole amount to obtain the stock/commodity. Thanks to leverage we can
dramatically reduce the size of investment yet trade the same volumes.

If we dig deeper
into the maths behind leverage we can see that a $100,000 trade using 1:500
leverage would require a $200 investment. 

$100,000 (volume) /
500 (leverage 1:500) = $200.00 (capital needed to invest in that trade)

So we can see from
the above, that virtually any trader can compete in the market by opening large
positions with low capital. A revolutionary feature for online trading
platforms.

New STP Broker EagleFX
offers maximum leverage of 1:500 on an array of Forex majors, crosses and
exotics with no ongoing account costs.

How should leverage be used?

Leverage allows
traders to invest low amounts with the potential to turn a large profit.
However, leverage should be approached with caution as it can also magnify
losses. That being said, the rewards can be BIG!

When approaching leverage,
it would be considered advisable for a trader to be honest with themselves in
terms of how experienced they are. 

Ask yourself:

  • How long have I been
    trading?
  • How successful am I at
    trading?
  • Am I a novice or expert?
  • Can I afford to magnify
    losses on an investment?
  • Will I monitor open
    positions closely to protect my investment?

More experienced
traders may be better suited to a higher leverage setting as they would be
considered better prepared to enter markets. Equally, it would be advised that
beginners use a lower leverage setting as to protect their investment and not
magnify losses.

Analysis

When entering a
particular market, whether experienced or not, traders must be equipped with
appropriate knowledge for them to take full advantage of high leverage options.

There are 3 core
areas of research and analysis that traders can adopt. It is useful to explore
a variety of sources whilst researching as to not get one sole opinion from one
media outlet – there may be an agenda attached to it. 

Technical analysis
is used by traders to study price movements in the markets. This can be done
using charts, data and graphs to review historical price movements of a certain
asset with a view to spotting future trends. Indicators such as Bollinger bands
are useful when conducting this type of research.

Fundamental
analysis is used to establish a general overview of how an economy is
performing. This includes interest rates, employment levels, and GDP. Traders
can develop a general understanding of the strength of a particular currency
based on this information and open Forex positions with added confidence. The
current stability of a country is useful to know when entering the Forex
market.

Sentimental
analysis draws on raw data of how many traders have opened a position on a
particular currency pair. It allows us to delve into the psychology behind the
interest in a market and the emotional state of traders within the Forex
market. Sentiment indicators are numerical indicators that show how a
particular group feels about a market. There are many available online.

EagleFX has a news feature section on its website which contains a
‘Daily Market Analysis’ section for you to review the latest market movements.
This feature coupled with the ‘Economic Calendar’ will help you stay informed
and ahead of the curve!

Demo accounts

A feature of a
responsible broker will be to provide a space where potential depositors can
practice using the functions and features of that platform. 

Using MT4 as a
beginner can be a daunting prospect. Although tried, tested and revered by
millions of traders around the globe, the award-winning platform should be
tested before going live. So, you as a trader can get the most out of it. 

It is of particular
significance to develop a trading strategy to suit you and your account budget,
especially when using high leverage. A demo account with like for like
conditions as a real account will allow you to chop and change leverage and
find a suitable setting for YOU.

Spread

The tighter the
spread the better as this represents the cost of a transaction on a platform.

A platform that
offers tight spreads is an ideal environment for scalpers looking to enter the market
and leave quickly with a profit. Scalpers need a tight spread as they will
place the most trades out of all trading strategies thus paying more
commission.

Customer support

Always ensure a
broker you choose offers a high standard of customer care. Beginners using
lower leverage settings as well as experts using high leverage will all need
some degree of support in unforeseen circumstances.

To sum up

Whether new to
trading or a seasoned pro, it is important to gauge our leverage setting to
suit you. 

Set yourself goals
whilst trading and try not to let emotions take over. Set a target profit and
stick to this. Do not let greed creep into trading decisions as this deadly sin
can be lethal to your account balance.

Use a demo account
and practice trading with leverage if this is a new concept to you. If you feel
like you’re not trading successfully and not seeing the ROI you dream of, then
there is no shame in going back to the drawing board and developing a new
strategy. 

Develop your
perfect strategy in pristine trading conditions today at https://www.eaglefx.com/

Join for free today
and starting trading with as little as $10.00.

This
article was submitted by EagleFX.

ForexLive

Continue Reading
Advertisement

Industry News

School4Trading Review – How to Spot Possible Forex Broker Fraud

School4trading Review

School4Trading Review – How to Spot Possible Forex Broker Fraud

In this School4trading Review, we will look at the features of the software, as well as the customer support. First, let us look at the interface. The design is simple and easy to navigate. It also provides a chatbot, which helps you to communicate with the broker. The customer service is warm and inviting, which is a hallmark of a good broker. In contrast, a fraudulent broker will use cold and impersonal customer support to lure people in.

Another problem with the system is that the login process is not always intuitive. You may have to retype your password several times to get in. Then, you may experience difficulties withdrawing your funds or accessing your account. In such cases, you might have to wait for days or even weeks before you can withdraw the money you’ve invested. This is not a good sign. It’s better to choose a different trading platform altogether.

If you’re having trouble logging in, you should also check the legitimacy of the broker. Whether the broker is licensed by a reliable regulatory body or closed down, you’ll want to be sure it’s legitimate. If the broker isn’t licensed by the right body, don’t trust him. You shouldn’t waste your time with an inexperienced company. This will only cause you problems in the long run.

The next factor that should be checked is the licensing. A legitimate broker will have a license from a high regulatory body. However, a broker without a license will be unreliable. Moreover, a reliable regulator will take away the license of a scam broker. As a result, a trustworthy School4Broker/Profittrade review should mention fees, account rules, and contract terms. A scam broker will be unable to operate legally.

Secondly, look for warning signs. The broker should be licensed and regulated by a reliable regulatory body. It should be regulated by a high level. If it doesn’t, it’s a scam. Lastly, it should have a website that lets you easily access your account. Moreover, you should not hesitate to check the contact information. If you find any information that seems suspicious, you should reconsider using the broker.

In summary, Forex trading isn’t easy, but it doesn’t have to be complicated. It’s not as difficult as it seems if you’ve heard about the program. You’ll learn everything about the basics and how to become a professional. But if you’re still unsure about whether this program is right for you, don’t hesitate to contact a school4trading’s website.

The most important thing to remember when it comes to Forex trading is that it’s not easy. While it’s important to have a strong background in trading, there are a number of factors that can affect your success. Having a proper plan is vital in the long run, because you will be trading with real money. And, the platform should be reliable. Otherwise, you’ll end up losing a lot of money.

As we’ve mentioned, Forex is not easy. Investing isn’t something you can do in the comfort of your own home. You need a proven system. There are no free trials, so you’ll have to find a way to do it yourself. This isn’t a scam, and it’s a great way to make money without any help. A Forex system can help you learn the intricacies of the market.

Although the process of learning Forex isn’t an easy one, it’s certainly not impossible. Fortunately, there are many people who are willing to take the time to learn how to trade. But, even the most experienced trader needs to be aware of the risks of the market. While Forex trading isn’t easy, it can be done with the right knowledge. The software’s user-friendly interface is key.

Continue Reading

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

Continue Reading

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

Continue Reading

Trending