Because investing is not a sure thing in most cases, it is much like a game – you don’t know the outcome until the game has been played and a winner has been declared. Anytime you play almost any type of game, you have a strategy. Investing isn’t any different – you need an investment strategy.
An investment strategy is basically a plan for investing your money in various types of investments that will help you meet your financial goals in a specific amount of time. Each type of investment contains individual investments that you must choose from. A clothing store sells clothes – but those clothes consist of shirts, pants, dresses, skirts, undergarments, etc. The stock market is a type of investment, but it contains different types of stocks, which all contain different companies that you can invest in.
If you haven’t done your research, it can quickly become very confusing – simply because there are so many different types of investments and individual investments to choose from. This is where your strategy, combined with your risk tolerance and investment style all come into play.
If you are new to investments, work closely with a financial planner before making any investments. They will help you develop an investment strategy that will not only fall within the bounds of your risk tolerance and your investment style, but will also help you achieve your financial goals.
Never invest money without having a goal and a strategy for reaching that goal! This is essential. Nobody hands their money over to anyone without knowing what that money is being used for and when they will get it back! If you don’t have a goal, a plan, or a strategy, that is essentially what you are doing! Always start with a goal and a strategy for reaching that goal!
The foreign exchange market is also known as the FX market, and the forex market. Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970's. The forex market is one that is not based on any one business or investing in any one business, but the trading and selling of currencies.
The difference between the stock market and the forex market is the vast trading that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions and those similar types of institutions from other countries. The
What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country.
The difference between the stock market and the forex market is that the forex market is global, worldwide. The stock market is something that takes place only within a country. The stock market is based on businesses and products that are within a country, and the forex market takes that a step further to include any country.
The stock market has set business hours. Generally, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open generally twenty four hours a day because the vast number of countries that are involved in forex trading, buying and selling are located in so many different times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market trading occurs.
The stock market in any country is going to be based on only that countries currency, say for example the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you are involved with many types of countries, and many currencies. You will find references to a variety of currencies, and this is a big difference between the stock market and the forex market.
Pivot points is a position / price point that is used in short-term (one day of trading) as a reference price movements next. For example, to determine support and Resistance daily.
>> The methods used in the search for pivot points are as follows:
Pivot Point = (High + Low + Close) / 3
>> Variation - 1. Basically the same, only added to the closing price factor price gaps.
Pivot Point = (High + Low + Close + Open) / 4
>> Variation - 2. Same with the traditional method, but the price is replaced with the close price open.
Pivot Point = (High + Low + Open) / 3
After we get the pivot point, then we will find a point of support and Resistance, in this case support in the Resistance and is looking for support and Resistance to intraday trading, namely support and minor Resistance.
* Support
Support - 1 = (2 x Pivot) - High
Support - 2 = Pivot - (High - Low)
* Resistance
Resistance -1 = (2 x Pivot) - Low
Resistance - 2 = Pivot (High - Low)
Closing price and the pivot point will be the main focus in intraday trading this technique. Here we will determine that point when the closing price (CP) > pivot point (PP), the positive signal or in other words, we do tend to be open long positions. Conversely, if PP > CP, then the signal is negative or, in other words, a position that is recommended in the Short position.
Of course, not only closing price and the pivot point of concern. Support and Resistance also become a point of reference in determining the position will be taken soon. Both these points help determine, for example to buy back (buy-back). For example, we have to buy GBPUSD at a certain price and then decreasing, then the position in the support-1 should we do buy-back. If prices continue to slide down under the support-1, the buy-back position is in support-2. Support-2 is a position where the final limit of the decline at the time.
If the trends show positive movement, and the price starts to move up above the pivot point, the position is recommended that long. In a position that is recommended when the negative trends and shows signal prices start moving down under the pivot.
HopeFully UseFull :D
A trading system that will be good experience failure without good money management, the trading system that can be successful if poorly balanced with the powerfull money management and discipline. Currenncy trading will be always working on two things namely the rise and fall, profit and loss, where winning and losing is just part of a process of forex trading. But with powerfull money management, you will go on the path to the winner and profit.
Have you thought that the profit that you have collected during the spend-to-day or even month-speaking will be lost in a short time with the initial margin you? This can only happen when you're trading money without good management. And I never overtly experienced it, the profit that I collect for 3 weeks out of the trade in the next one because I did not put a stop loss.
Illustration: You scalping trading system with a stop loss without going too confused where you should put a stop loss and your record in the 1-month record of winning than losing the trade of trade in your 90:10, which means that in one month there are 18 winning of the trade and 2 of losing trade.
Bad money management (18 win, 2 loss):
18 x $ 15 = $ 270 profit;
2 x - = $ 150 - $ 300 loss;
net profit / loss = $ -30; (loss despite record win more)
Good money management (8 win; 12 loss):
8 x $ 90 = $ 720 profit;
12 x - = $ 30 - $ 360 loss;
net profit / loss = $ 360; (still recorded a profit even though more often loss)
So Why Money Management?
Continuing my postings on Risk management in forex, I will give you some tips and risk management that you can take:
1. Cut loss
The action is close your position that contrary to the market price movements. Cut loss is used to limit the losses that will not cause a loss greater. For example, say we are opening our position on Open Buy GBPUSD 1.8000 in the price. Buy open position means we expect the price rise beyond 1.8000 speculate until we get.
We hope to move the price up to 1.8100 for example, so that we can get profit 100 points. However, what power, it moves opposite the price that we expect. In fact, prices continue to move down from 1.7980 and 1.8000 to be still show tendencies down.
So we experienced a loss of more and finally to the margin call. the better position is closed, although we bear the loss of 20 points (1.8000 a 1.7980 = -20 points). Action is called the cut loss is a loss position close to prevent greater losses.
2. Switching
Action is similar to the cut loss, but the difference after closing the position we are losers, we open a new position with the same direction with the movement of the market price.
In the same case with the loss over the cut, then we close our position at 1.7980 and then we open a new position of the Open Sell because the price decline. Thus, if prices continue to fall, say they reached 1.7900 overall loss we experienced a 20-point gain, but profit by 80 points (1.7980-1.7900 = 80), so the total profit we still have 60 points.
3. Averaging
This method requires extra capital to maintain the position that we open that move contrary to the market price. Say the case with the same Cut Loss example above, if we want to do action averaging then we open a new position, but in this case is not like switching a close position that we have losses and open new positions that contradict the position of our previous the reason prices have been moving down.
In averaging we do not close the position that we have opened (in this case the Open Buy) and even with our menambahinya open a new position with the same direction, namely the Open Buy back! Why? Did we have to make the Open Buy and previous experience of loss, and why we do Open Buy back? Reason is simple, we hope because the price has decreased the price will be back up so that when we make action Open Buy a second expected prices to move up even beyond the Open Buy us first so that we gain the double.
The third risk management over the very simple and easy to do. So, unfortunately, how we experience the loss only because we do not know it. However, whether with the third risk management know we are not ever be experienced loss?
The answer of course not. If your snow did, the third risk management relied on over one thing: our ability to analyze price movements.
Yes, indeed that is the core of forex trading. Risk management does not even have to be effective when we are not able to do the analysis correctly and accurately. Thus, the analysis is imperative to know the start investment in forex trading. There are still many who must learn to enter and invest in the forex world. We just learn from the simple part of this investment.
What is important is you continue to study and learn.
Ok, first Up Here .. Happy Trading
Forex trading is classified as investments that are high risk. This means that the forex trading has classified high risk. One of the highest among other financial investment instruments.
The risk factor that you need to know before the start of forex trading:
- Possible loss of funds 100%
- Flow of funds very quickly (very liquid)
- No method of trading that can guarantee you 100% sure destiny.
Forex trading is not a "quick rich scheme" that can make you suddenly rich without working hard. There is no success without work hard. Working hard is part of their experienced financial success in life. Including their successful through forex trading. Needed to work hard to learn the behavior of market analysis and so we can guess the direction of price movements accurately. Likewise needed mental extra trading when the results are not in accordance with our expect.
Ask traders on the trading-success that you know whether they had experienced a fall in the wake of trading them. And the answer is almost certainly "yes". The success is only provided for those who would try to learn and continuously improve themselves. I related to the risk that must be faced if we want to start investment in forex, required special tips to decrease, or even to reverse our position that was minus a positive return and benefit.
Find out more about the article and risk management tips you can follow in the next post
Best regard,
Safe Trading :D
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