Money Management
Written by Danielle Franklin
Some things in forex trading are uncommon and better left
inexperienced. One of these unfortunate things that you should be aware of in
order to avoid it is a requote. What exactly is requote? Why does it happen?
How does it affect your trading?
What is a
requote?
A requote happens when there is a difference between the
price you decided to enter a trade by clicking buy/sell and the price on the
market when your order actually reaches the broker.
Not always a requote means a blatant attempt to screw a
trader. First of all a requote might be somewhat a risk management – if you
trade large lots, the broker may want to confirm that you really meant to make
that big of a trading order.
Most requites happen to big players, not a trader trying to make couple of bucks with mini lots during some economic press release. It is expected from a reputable broker to ask you first, before executing a potentially risky trade.
Written by Danielle Franklin
Becoming profitable in
forex trading is not about finding great opportunities and win every trade
(which is impossible), but to know the price at which you plan to close.
Today all trading
platforms allow you to place stop/loss orders, which close the moment the
desired level is reached. This provides the best money management a trader can
ask for.
What is Take Profit Order
A reverse of stop-loss
order is called Take Profit Order. If the currency goes up and
reaches a certain level, it is sold and profits are captured.
You use this order when
you wish to close the positions when a profit level is reached. Take
profit orders are also sometimes referred to as limit orders. An online forex
take profit order is the opposite of a stop-loss order, meaning
When using take profit orders, you specify take-profit point – the number of pips from the current trading price point. As soon as the take-profit point is reached, the trade is automatically closed.
Written by Danielle Franklin
Compared to other investment instruments, forex trading presents an attractive opportunity for many. One of the explanations for increasing attention to forex is the high leverage provided by most forex brokers. While experienced traders are aware of ups and downs of leverage, beginners often skip the basics and jump into live trading without a full grasp of what leverage is, how it works and how it impacts the risks and profits. So, first things first – let's clear up some facts!
Written by Danielle Franklin
Forex trading without money management is gambling. Instead of concentrating on a long term profits from your investment, the focus is on a so-called “jackpot”. Without money management plan, forex trader is without protection and without any chance to be successful in a long run. What is exactly money management and how to optimize forex funds to get the best out of the investment? When forex trader acknowledges the existence of risk, the use of money management comes naturally. Trading market is in control no matter how intelligent and experienced the trader is. There is always a chance of being mistaken.
Written by Franky
Aside from forex trading, the word mini means something small and limited compared to others of the same type. This made me ask, is mini forex designed only for those who cannot afford to trade large? Is mini forex less dangerous when it comes to risking?
Most forex brokers provide several options when it comes to forex accounts. One of which is called mini forex account and it is usually requires a small deposit compared to standard forex account. Mini forex account is usually considered a connecting bridge for new forex traders that had enough practicing their trading skills with demo accounts, but not yet really to open a standard account.
Mini forex deposit requirement might be small but it still allows you to trade large amounts of currency. This is done via margin and the usual margin requirement for mini forex is about 1%. It sounds too good to be true but it might turn into one of the forex trading hell unless you understand the risks.
You might think that depositing small will not get you in trouble and that is the kind of thinking that you should avoid. You should fully understand the margin terms and requirements of your forex broker. If the requirements are not listed on the site make sure to discuss it with your forex broker and get the straight answers.
Margin allows you to trade larger amount of currency then you actually have in your deposited funds. As mentioned previously margin requirement is usually 1% but it is possible to get lower requirements such as 0.5% or higher, such as 2% or 5%.
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