Leverage Is Important In Automated FX Trading

Leverage is powerful and very useful in Forex Trading. With 100:1 leverage you are effective using $1 to hold $100 dollars. With 500:1 leverage will enable you to hold $500 using $1. This is nothing new to finance industry but widely use for currency trading in order to use the dollar unit value of currency.

Leverage works with capital that funded the trade. The capital has to be in currency value or cash in order to attain the leverage holding. This is similar to derivative or contract for difference for stock and shares. Using cash to leverage is much more powerful then using physical asset as it is harder to dilute and cash it back. Therefore leverage are still use by currency trade with capital at 100:1 leverage. This determined the 1 lot size of 100k contract in forex trading. Related Coverage Best FX Automated System Forex is the most widely traded financial market around the world. Top bankers, exporters, government, investment firms and venture capital deals with foreign exchange or Forex at any point of time.

5 habits for successful automated fx trading Habits, successful, automated trading, fx trading, currency trading, forex trading, automated fx trading, automated forex trading, automated fx trading, trading Best Automated FX Trading System I would like you to know about the different automated trading strategies in Forex and which is the best automated trading system. Advantages Of Fx Trading Very few people realize the benefits of FX trading over normal investments in stock or otherwise. This is mainly due to a lot of misconceptions about forex as a whole. Forex is an excellent avenue for investments, and if you play it right, you could substantially increase upon your investments.(For mini lot is 0.1 lot of 100k contract).

1 lot actually holds 100k contract worth of currency. This is equivalent to $1k of capital used to hold $100k contract worth of currency. Since pip is used for currency movement, 100k for 1 pip movement will work out to $10 a pip. (10,000 pips actually gives 1 dollar but in leverage context is $100k contract).

For trading account, which give 200:1 or 500:1 leverage is different from the currency trading leverage. Please do not mix up both. The currency leverage is fixed at 100:1 for currency trading of 100k contract. Mini lot are executed at 0.1 lot or 0.01 lot. For trading account leverage which is 200:1 or 500:1, this will determine your margin required to hold in order to perform the 1 lot of 100k contract. Using 100:1, is $1k. Using 200:1 is $500 per lot. Using 500:1 is $200 per lot. This of course with higher leverage you actually can buy more lots. With a trading account leverage of 500:1, you can buy 5 lots at a total of 1k capital. Amazing use of leveraging.

No doubt leveraging enable you to buy more lots with higher leverage but the downsize is the drawdown and the pips loss still remains at per your trading lot of 100k contract. So most money management software will use mini lot at 0.1 lot or 0.01 lot to trade. ($1 and $0.1 per pips respectively). Therefore do not mix up these 2 leverage. One is the 100k contract leverage for currency buy and sell which is fixed at 100:1. The other is your trading account leverage which is provided by your Forex broker.

I end of this topic by comparing the trading in stock and shares. Without leverage you are buy 1 shares per 1 share price. Using leverage, you can buy 100 times more using the same capital. (assuming share price is same as currency price, and 1000 shares is equivalent to 1 USD per share.) Using 1k capital, you can but 1000 shares or buy 1 lot of 100k contract forex currency trade. Visit my website for more information. source.

Choosing the Best Forex Affiliate Programs for Better Marketing

The way to have a good business deal through the forex affiliate marketing is through the means of having the best platforms as the parent site. Besides forex trading, the affiliate programs have proved to be quite beneficial in the forex arena these days. By becoming an affiliate, a portal is able to carry out business through the promotion of the facilities in a platform. This helps them earn commission for every customer who buys the products or becomes a member of these platforms.

To broaden the reach of the platforms among the potential customers, the platforms are nowadays allowing websites to increase their spectrum of reach. This is done by posting various materials and publishing articles through another website. The internet promotion allows more people to see these products and they go to the parent site through the means of these affiliate portals.

So, people who are interested for forex affiliate marketing need to pick up such programs that are beneficial for them. The first factor to look out would be the commission that is earned from such portals. This is variable from one platform to another and therefore, one can make good profits if the parent platform is paying a hefty commission for the incoming customers.

The second thing that should be looked out for in the best forex affiliate programs is the actual content that is being promoted. If people have an idea about the different forex indicators and tools, then they will be able to recognise the ones which have a potential of being sold and liked by the customers. Promoting the products is not a very difficult job, provided people have the internet connectivity and are knowledgeable about the manner in which the promotions are to be done. It only requires a bit of experience and creativity to carry out such promotional activities. Even, one can do this from the comforts of the home and at spare time.

With little effort, doing the promotions will give high returns. If the platforms for which the promotions are being done are chosen carefully after a little research then it will be fruitful in the long run. As the products will attract customers, one can make a strong presence in the market. The more customers that an affiliate is able to attract, the probability of the products being sold will be higher.

Therefore people should target such platforms which are good and have better quality reviews and tools in their possession. Being a part of such forex affiliate marketing is profitable. People should therefore go for the best forex affiliate programs available in the market so that they do not have to take much of the trouble and concentrate on the quality of promotion. Customers will be automatically drawn towards the affiliate sites and the traffic will be high, and the end is full of benefits. Posted by Forex articles and reviews online.

Is Forex Trading For You?

Forex Trading involve a lot of risk and its not for anyone. Below is some risk discussed to make you ready for Forex Trading should you choose to accept. The first is that you will lose everything you put in.

Money!

If trader are telling you this that you don't need any money to trade Forex then they are not telling the truth! You need money to trade Forex but you can start off with small amount of capital. Some broker allows you to open mini account with as little as $500 or $250 to start with. Remember that you are buying at mini trade or micro trade which will give you $1 or $0.1 per pips. This is a good way to start live trading but will take a longer time for you to gain an adequate amount to sustain your expenses.

For starter, $1k on 0.1 lot trading is a good start where you earn about $1 per pip. Likewise your losses is also -$1 per pip. Trade, learn and increment your trade to 0.2 lots once your hit $2k or $3k and repeat this to grow your trade to 1 lot and more. For advance trader, good to start off with $10k on 1lot trading. If you are into automated Forex trading, you should start off with $10k and set a target of 1000 pips every month trading at 0.1 lot. If you calculated the margin, you may be able to load 3 EA that gives you 300 to 400 pips every month which will work out 1000pips or $1k every month.

Time!

In Forex trading, you need time to look at the chart and check your trading rules before you can execute a trade. There is buy stop and sell limit which lock I your trade and it will execute when the buy or sell price reached. But you still need plenty of time to go thru your chart and your trading rules. In some cases, the rules is forming but not yet ready and you need to wait for another bar or few more bars in order to start your trade. This will take you another hour or so depending on the charting time frame you are using. There time is required for trading if you are technical or fundamental.

There is another way which is automated Forex Trading. You don't spend time executing the trade or looking at chart with indicators. The strategy is all coded and run automatically on your MT4 trading platform. (MT4 is one of the popular forex trading platform). Instead you spend time looking at executed trades, trades summary and close trade profit/loss. The time spend is on analysis these close trades, re-enforcing winning strategy and re-organizing losing strategy. You see the time spend is now on closed trades rather then spending time to look for trades matching your rules. You will have more time to focus on strategy that works and refine these strategy that don't work.

Fear!

There is risk and so there is fear of losing. No Forex trader will win every time. There bound to be wining and losing trades. The point is to overcome the fear of losing that is causing you to make repeated similar trades. Always look at statistic and trend. Forex trading is about repeating trades that make money, re-configure some of the trading rule along the way and consistent with money management. Fear has to be remove from every trade, instead forecast or estimated results should be anticipating in your feelings. Cast fear aside and trade without emotion. Posted by Forex articles and reviews online.

Interest Rate and Forex

Let's start by talking about borrowing money from the bank. You went to a local bank A and borrow $100 in your country currency as say its United State Dollars. This bank A charge you 5% interest yearly. Your friend goes to another bank B and borrows $100 United State Dollar at 2% interest yearly. So if you want to borrow another $100 and your friend lend it to you at 5% interest (he took loan $100 from another bank). By simple calculation, your friend is effectively earning 3% interest. (5%-2%=3%). If you hold on to this for 1 year, you are carrying over your trades over a year and yield you 3% interest rate on the principle amount.

Sound similar to carry trade?

Imagine your friend is the broker. You put money into your trading account instead of borrowing from banks, your broker account will reflect $100 (assume the earlier example, you put in $100.) and this is in United State Dollars. Since you are holding currency in your trading account, it is incurring interest from the government that issue that currency. Eg United state is giving 2% interest. On the other hand Japan Yen is giving 0.5% interest. So if you borrow Japan Yen to buy equivalent United State Dollar, you will gain 1.5% interest yield every year. (Or use United State Dollar to Sell Japan Yen.)

So total how much you will earn?

Assume you use $100,000 and use it on the carry trade between United State Dollar and Japan Yen, giving you 1.5% yearly, which work out to be $1,500. If your trading account is using 100:1 leverage, you are effectively using your original $100,000 to buy and hold $10 million, which give you $150k a year. This work out to be 150% Return On Investment.

Can this work in real life?

Of course there are few factors to consider before your 150% Return On Investment can be realized. Avoid margin call, the currency fluctuation and the exchange rate between United State Dollar and Japan Yen. Let's start by taking the positive direction, the exchange rate is rising for (assuming you get 5% more Japan Yen if you sell), the currency fluctuation is at minimum of near 0% drawdown and no margin call. You can earn $150k + $500k = $650k about 650% Return On Investment.

But this is always not the case

The currency rate went down (assuming you get 1% less Japan Yen if you sell). The currency fluctuated 1% drawdown. You earn $150k - $100k  = $50k. but before you can realized your profit of 50K, you are hit will margin call of 1% ($100k) and your trade are call out within a week, which leaves you almost zero. And I mean zero dollars. Now you see the risk of forex trading using leverage. Of course I simplified a lot of the calculation and conversion. But it is enough to make you understand the basic of carry trade and interest rate.

My recommendation

Always take charge by calculating money management into every trade you execute. Keep it to 10% of your capital. For the earlier example, you should only use $20K to buy $1 million forex currency which potentially could yield profit of $65k or loss $35k (assume drop of 5% with 1.5% interest difference on the carry trade).

Which currency then?

There no recommended currencies to buy, but you have to look out for currency with the highest interest rate, currency with the lowest interest rate and a trending up exchange rate when you sell back. (buy low, sell high). Always remember to use money management calculation (assume 10% of your capital with 100:1 leverage). Posted by Forex articles and reviews online.

Selecting CFD Trading Platform And Broker

When you think you are prepared to start Forex and CFD trading, then you will have to look for a platform or a unique system which will feed about different types of market data and permit you to place bids, sales and purchasers. Usualy each Forex broker offers a massive selection of these trading platforms. However, you are able to talk to other traders, the easiest method to discover the perfect Forex or CFD Trading platform for you personally would be to try something out. Luckily, many trading firms offer trial versions related to these programs, permitting you to identify the best for you without needing to spend your hard-gained money. You'd be strongly advised to test a few of these to feel something new and amazing not just for that platform as well as the CFD trading marketplaces themselves before making final decision to earn some money.

There are many Forex and CFD trading platforms and each presents a good style and features and you require time to search out the best workable for you. Related Coverage CFD Trading Brokers This articles explains the nature of CFD brokers in terms of market making (dealing) and pure brokers (middle men). It summarizes the main factors to consider when choosing a CFD broker. CFD Trading through Brokers Many people would like to make a fast buck today with the uncertain economy and they think that the path is through the trading markets. Choose The Best CFD Brokers Cash is the elemental prerequisite of people to attain comfort and satisfaction. Choose the Right CFD Broker What are CFD's?

Contracts for Difference or what is usually called as CFD's is a financial derivative where there is a contract between two parties, between a buyer plus a seller, the buyer should pay the vendor the difference between the rate of an asset and the value at contract time.Luckily there are many platforms which offer you to utilize cost free versions and get satisfaction from their features. The trial version proves as best opportunity for the new traders to get practice through them without spending their saving.

Furthermore these free versions gives best trial and make the view clear about trade marketing and you get to know which plat form will proves beneficial for you and which fulfils your needs. Through this basic raining it becomes easy for you to choose the right one. CFD increases your knowledge about trading and at least trains you enough to take a good start but the real information you get only from practical steps. In nut shells it’s always better to prepare yourself whenever you want to engage in any financial interment.

When searching for a trading platform and broker, you will find numerous things that should be considered. First of all, you have to think about the broker reputation in terms of their experience and knowledge in that particular niche. You also need to know about the customer testimonials and feedback about these brokers. It gives you precise idea of how to move further for more good and successful results in trading.  Regrettably you will find frequently suspect operators who crop up, therefore, it is crucial that you do your homework and choose the one based on his/her reputation. Hopefully this information will provide you some guidance in regards to what to search for when choosing a forex broker. source.

3 tips to better your forex trading results

#1 Discipline: Stick to your trading rules

You must never get emotion while trading as it will cause you to loss money in trading. For example if you execute a trade with is trending but just minutes after the trades, the currency price went against you and you went into losses. You may have losses that goes as low as -100pips (assume your stop loss is 150pips), do not panic and close your trade early to cut losses. Always stick to your trading rules. Hold onto the trade and let the trend ride out.

Like wise, if you execute a trade and the trend just go crazy and hit 100 pips profit. Do not be temped to close the trade and get the profit (assume your profit take is 200 pips). For fear of losing before the trade hit the profit target, you may just close the trade. Do not be over joy and close the trade. Stick to the trading rules and let the trade hit the profit level by itself. You may end up missing the profit that you should if you let emotion affect you. Be discipline always.

#2 Money management

This is the most important factor to every forex trader that is actively trading the currency market. Due to the leverage of forex trading as compare to conventional stock and shares, the leverage of currency in forex is 100:1. By saying this, using 100K contract or equivalent of buying 1 lot of normal trade, which is 100 x $1k of equivalent of currency value. In relative calculation, 1 pip which is 4 decimal for United State Dollar give you $10 per pip. (Assuming flat exchange rate for simplicity). With a trading account of 100:1 leverage, You need to spend $1k to buy and hold onto 1 lot at 100k contract.

The above is simple to calculate by just taking the leverage of your trading account setting. The tricky part is the margin calculation. Taking the same example, if the currency goes up by 100 pips, you will gain $1k unrealized profit. But if the currency does down -100 pips, you will loss $1k unrealized loss. So if you only have 2k capital in your trading account, your account would hit margin call (1k+1k=2k). The trade would be faced to close by your forex broker and you will hit losses. So it very risky to trade with zero stoploss. For me, by rule of thumb, I will use 10% of capital to trade, by calculation, you would have 900 pips to play with. (this applied to leverage 100 or 200 or 500:1 because leverage only reduce your initial 1k holding to $200. Since your contract is still 100k contract, the pips loss and profit remain the same. So stick to using 10% or less of your capital to trade). Instead of increase your capital, you can use mini lot or 0.1 lot for 100k contract. This will reduce your holding to $100 (using the above example).

#3 Review all trade: Keep a trading journal.

Good consistent trader always keeps a trading journal. Winning trades and losing trades are review consistently for flaws and good trigger setup. As all trades are executed using setup triggers, always have a habit of trying out different variation of the setup trigger. Example could be Simple moving average, you may find at period of 20 SMA cross over 50 SMA at 1 hour trading chart, always give you an accurate signal to execute a buy trade for EURUSD during early morning hours, and over 10 trades, you hit 7 winning trades. You can apply this together with another set of trigger rules to make your winning rates higher and consistent.

There are many indicatora which can assist in getting better trading results. Please visit my website for more information. Posted by Forex articles and reviews online.