Archive for the "Trading" Category
If you are serious about trading successfully on the international currency market, then you should work out a trading plan. Pay particular attention to it, as it is not just another chapter in a Forex trading guide book; on the contrary, it is a major trading tool.
If it seems the trading plan is useless and takes precious time, try not just to draw it up, but make corrections occasionally.
Statistics and statistical analysis are of great importance when trading on the Forex market.
Trading plan is a kind of statistics which reflects your actions in different circumstances. It is an algorithm of your work, which should be corrected due to market changes.
It is a trading plan that will help you to analyze situation promptly and take right decisions.
You should remember the basic stages in plan-making process:
1. Observe the economic news and collect relevant information.
2. Make a plan.
3. Keep to the trading plan.
4. Analyze you work according to the plan.
5. Correct the plan.
Trading is a job, a sort of business, and business without a plan will not bring fruitful results.
Before answering this question, it is necessary to give definitions of the terms. Stock trading means buying and selling securities on stock exchanges. One of the purposes of the trades is gaining speculative profit. Today most of online trading on global stock markets is conducted by retail traders.
In order to trade stocks, a trader opens and replenishes his trading account with a brokerage company, which provides access to markets. A broker holds agreed commission from his client’s trading account for its services.
Depending on the size of the deposit, the expected schedule, and personality traits, a trade chooses and then tests his trading strategy on a demo account. It involves transactions of a given size on a particular stock market, with certain trading instruments and conditions of closing positions.
- Trades on stocks are carried out on special software – trading platform, which sends the order to a broker to buy or sell an asset. A trading platform has all the necessary functions for trading. In addition, it enables you to track stock quotes and analyze the current market situation through various software applications (indicators, oscillators).
For successful stock trading you should understand the way financial markets function, have the skills of technical and fundamental analysis, as well as experience in demo account trading. Trading requires constant self-monitoring and self-improvement, but finally can result in a job satisfaction and a significant income.
Starting working on Forex every experienced trader came across the concept of multiple time frame analysis. One might look for the answer for such questions as “Which time frame is the best?”, “Which one is the most profitable?”, etc. In order to answer it, we should examine each of them.
Every time frame is designed to show the same information. The only distinguishing feature is the data provided in terms of different periods of time. In order to help you to choose the most appropriate, let us look at the most popular:
On the daily chart every bar represents one day; thus, changes on the chart will be observed once a day. On the 1-hour chart new bars appear every hour, providing trader with information. Bars on the 5-minute chart appear every five minutes, showing dynamically the current situation on the market.
In order to choose the most appropriate time frame, you should take into account several criteria: the period you will be working with the charts, profit, the amount of your deposit, and account management.
If you prefer a more moderate pace of work and you like to follow the changes of the chart every hour; if you consider that 1-hour chart is more reliable and it reflects precisely the price fluctuations as it does not show a great deal of that fuss about nothing that 5-minute chart contains, then 1-hour chart is ideally suited for you.
We may think over the other alternative. In case you have regular job and you do not have enough time to observe the situation or you think that changes which occur during the day do not influence the market on the whole, and it is better to analyze the final result in the evening; probably you want to participate in the trade at night making money work for you even when you sleep, consequently, it is better to use daily charts.
You have to choose the way you make money on Forex either participating in trading, using every chance, sitting in front of the monitor the whole day or making money relaxed observing price fluctuations from time to time and not breaking your daily routine.
- Forex is based on free currency conversion; it presupposes a state does not interfere in foreign exchange transactions. Nowadays, there is no fixed exchange rate as there are no restrictions on volume of transactions.
However, some countries establish special rules for brokerage firms. First of all, these rules apply to relationships between brokers and clients.
Financial Services Authority (FSA) exercises control over financial markets in the United Kingdom.
Commodity Futures Trading Commission (CFTC) regulates futures and option markets in the United States. National Futures Association (NFA) is an independent self-regulatory organization and watchdog of the commodities and futures industry in the United States. The NFA elaborates trading rules, conditions for brokerage service, and also provides mediation and arbitration for resolving consumer complaints. Besides, the association collects and analyses reports obligatory provided by brokers and its members.
The Central Bank of the Russian Federation exercises control over the exchange transactions in Russia. However, Russian legislation does not make provisions for free unlimited currency conversions.