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Ten mistakes all successful FX traders should avoid

If you aim to become a successful and profitable forex trader, there are a number of seriously damaging mistakes that you’ll want to avoid. It should go without saying that you will make some mistakes when learning how to trade.

Ten mistakes to avoid when trading FX

If you aim to become a successful and profitable forex trader, there
are a number of seriously damaging mistakes that you’ll want to avoid. It
should go without saying that you will make some mistakes when learning how to

It’s simply unavoidable. This is
not necessarily a bad thing, as mistakes allow you to learn and grow. The ten
mistakes that you’ll read about below are among the most common and as such,
tend to be the most damaging when not noted and corrected.

Entering into too many trades at once

If you’re entering into multiple
trades at once, you’re likely over-trading. Each trade deserves your full
attention to help ensure that it is profitable. Dividing your attention among
multiple trades will only decrease the odds of each of those trades resulting
in profit. Less is more when trading FX and the sooner you realize this, the
better off you’ll be.

Devoting too much time to analysis and trade planning

While trade analysis is necessary,
it can take up too much of your time. You may even find that you’re spending
way too much time in the planning phase and very little actually trading. There
will only be a number of optimal entry points each day. Don’t miss out on too
many of these by being locked into exorbitant trade planning.

Placing too much focus on short-term charts

Trading too frequently on the
short-term charts can lead to over-trading and over-trading can lead to fast
losses and a gambling-like approach to forex trading. Additional, critical data
comes from higher time-frame charts such as those seen within the EagleFX
platform, and these charts tend to be more important than lower time-frame
charts. With higher time frames, you’ll receive more reliable signals and a
reduction in your stress levels.

Bypassing the opportunity to trade on a demo account

One should never trade with real
money before trading with mock funds using a demo account. Even if you’ve done
your homework and are certain that you know how to trade, you need to see
trades in action within a platform. EagleFX offers free, unlimited demo
accounts to all. Visit them now to create a practice account and avoid this
terrible mistake.

Trading solely based upon the news

Don’t assume that you know which
way the market will move based solely on the news. Far too many traders have
experienced serious losses due to making this mistake. You absolutely must
carry out technical analysis with fundamental analysis on each and every trade.

Thinking that past “wins” guarantee current profits

So, you’re last ten trades using
the same parameters and selections were all winners. Congrats! Now, don’t make
the mistake of assuming that if you open yet another using the same selections
that it too will be profitable. Yes, trading with the trend can result in a round
of easy profits, but each trend has to end a some point. Always remember this.

Trading out of desperation

If you’re feeling a sense of
urgency to trade, then you’re likely better off walking away. Terrible
decisions come from trading during desperate times. Take a break, collect
yourself, and make a new plan before trading again.

Failing to follow the process

Although each trader may use their
own strategies, there are general steps that all traders should follow when
trading. Skipping past some of these (particularly analysis) can result in
losses. Follow the process laid out by the successful traders who have come
before you if you want to have the best odds of being successful.

Making unplanned changes to live trades

Just because trading platforms such
as the MT4 platform provided by EagleFX allows for changes does not mean that
you should make them. No doubt, strong emotions can come from watching price
movement during a live trade. Acting on these can cause problems though, so
unless you are 110% positive that you’re doing the right thing, leave your open
trades alone!

Entering the market after an optimal entry point has passed

Missed an optimal entry point? Move
on. Never assume that you can jump into a trade soon after a missed entry using
the same expected price movement and profit. Yes, it can sting to miss out on a
great entry point, but others will come along.

What truly sets the best forex
traders apart from the worst is that the best are those who have made mistakes
such as the ones mentioned above, but took action to correct them going
forward. Those who do not do this may end up making the same mistakes over and
over again, eventually draining their trading account.

Select a top-tier broker such as
EagleFX, establish a solid plan for trading, and make corrections when
necessary. If you do these things, you can expect to come out on top.

This article was submitted by EagleFX.


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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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