In this post I want to discuss the merits of opening a forex account specifically to place high risk high reward positions. Now before you dismiss this idea out of hand, please hear me out because this concept may not be as crazy as it sounds.
What I'm actually suggesting is that you open two forex accounts. The primary one should be used to trade your main forex strategy and should hopefully accumulate regular profits over time as a result of taking controlled positions. You should treat this account like you would your pension fund in that your ultimate goal is to grow your account by taking safe low-risk trades which over time will give you some very healthy returns.
The secondary one should be your high risk account. This account should be a fraction of the size of your main trading account, and should be financed by money you can afford to lose. The goal of this account is to identify set-ups that have a large pay-off of at least 4:1. For example you are looking to trade positions which could potentially move 400 points in your favour whilst using a 100 point stop loss.
Furthermore you will be risking your whole account on this trade, or as much as you are allowed by using leverage. The worst case scenario is that you lose all or most of the cash in your account but remember that this account should be very small anyway and it should be money you can afford to lose. I usually start off with no more than £200 in this high-risk account.
With this account I am looking to make at least £800 from a winning trade and while this may sound fanciful, it is not actually that difficult because you only need a success rate of 20% (equivalent to 1 winning trade out of 5) just to break-even. However if you get a couple of consecutive winning trades, your account can grow substantially.
Although this is a high-risk account, you should still take this account seriously. Use technical analysis along with support and resistance lines to place the odds in your favour and only trade those positions that are most likely to pay off. For this particular system I suggest you use some kind of breakout system on the daily or weekly charts because these time frames are the ones that will give you these substantial gai
Saturday, May 23, 2009
FAP Turbo (Another New Robot) Is Released
im kind of reluctant to write a post about FAP Turbo the latest forex trading robot to hit the market, because I've told my readers about other expert advisors in the past and nearly all of them have turned out to be pretty poor from the feedback I have received.
However the aim of this blog is to keep you up to date with the latest forex news and developments so I thought it was worth a mention, plus I know for a fact that a lot of my readers and subscribers are very interested in forex robots.
So what actually is FAP Turbo?
Well it's basically an automated expert advisor for Metatrader4 that trades the markets for you. It claims to be a much improved and far more profitable version of Marcus Leary's forex trading robot, after the three technical experts behind the system gave it a complete overhaul.
On first impressions the sales page looks like all the other robots being sold on the market, but what caught my eye about this one is that it has been trading and updating it's live account for everyone to see for a few months now, and seems to be having great success.
One obvious positive feature about the FAP Turbo system is that it seems to use tight stop losses, which already makes it a lot better than some other robots I've seen that have huge stop losses and very small profit targets.
It seems to be completely legit with impressive-looking
However the aim of this blog is to keep you up to date with the latest forex news and developments so I thought it was worth a mention, plus I know for a fact that a lot of my readers and subscribers are very interested in forex robots.
So what actually is FAP Turbo?
Well it's basically an automated expert advisor for Metatrader4 that trades the markets for you. It claims to be a much improved and far more profitable version of Marcus Leary's forex trading robot, after the three technical experts behind the system gave it a complete overhaul.
On first impressions the sales page looks like all the other robots being sold on the market, but what caught my eye about this one is that it has been trading and updating it's live account for everyone to see for a few months now, and seems to be having great success.
One obvious positive feature about the FAP Turbo system is that it seems to use tight stop losses, which already makes it a lot better than some other robots I've seen that have huge stop losses and very small profit targets.
It seems to be completely legit with impressive-looking
Latest Analysis Of The GBP/USD, AUD/USD And Dollar Index
Well I've got a special treat for you this holiday weekend because Adam Hewison has just created three brand new trading videos covering the GBP/USD and AUD/USD currency pairs as well as the Dollar Index.
Actually the videos are now a couple of days old but every single one of his calls has been correct so far and have since moved in his favour. Each of these videos contains some excellent analysis particularly regarding fibonacci analysis, which I have to admit is not a tool that I use very much myself, and overall they are well worth watching.
Actually the videos are now a couple of days old but every single one of his calls has been correct so far and have since moved in his favour. Each of these videos contains some excellent analysis particularly regarding fibonacci analysis, which I have to admit is not a tool that I use very much myself, and overall they are well worth watching.
Dealing Spread, but No Commissions
When trading foreign exchange, you are quoted a dealing spread offering you a buying and a selling level for your trade. Once you accept the offered price and receive confirmation from our dealers, the trade is done. There is no need to call an exchange floor. There are no other time-consuming delays. This is possible due to live streaming prices, which are also a great advantage in times of fast-moving markets: You can see where the market is trading and you know whether your orders are filled or not.
The dealing spread is typically 3-5 points in normal market conditions. This means that you can sell US dollars against the euro at 1.7780 and buy at 1.7785. There are no further costs, commissions or exchange fees.
The dealing spread is typically 3-5 points in normal market conditions. This means that you can sell US dollars against the euro at 1.7780 and buy at 1.7785. There are no further costs, commissions or exchange fees.
Base Currency and Variable Currency
When you trade, you will always trade a combination of two currencies. For example, you will buy US dollars and sell euro. Or buy euro and sell Japanese yen, or any other combination of dozens of widely traded currencies. But there is always a long (bought) and a short (sold) side to a trade, which means that you are speculating on the prospect of one of the currencies strengthening in relation to the other.
The trade currency is normally, but not always, the currency with the highest value. When trading US dollars against Singapore dollars, the normal way to trade is buying or selling a fixed amount of US dollars, i.e. USD 1,000,000. When closing the position, the opposite trade is done, again USD 1,000,000. The profit or loss will be apparent in the change of the amount of SGD credited and debited for the two transactions. In other words, your profit or loss will be denominated in SGD, which is known as the price currency.
The trade currency is normally, but not always, the currency with the highest value. When trading US dollars against Singapore dollars, the normal way to trade is buying or selling a fixed amount of US dollars, i.e. USD 1,000,000. When closing the position, the opposite trade is done, again USD 1,000,000. The profit or loss will be apparent in the change of the amount of SGD credited and debited for the two transactions. In other words, your profit or loss will be denominated in SGD, which is known as the price currency.
Forex Trading Basics
The global foreign exchange market is the biggest market in the world. The 3.2 trillion USD daily turnover dwarfs the combined turnover of all the world's stock and bond markets.
There are many reasons for the popularity of foreign exchange trading, but among the most important are the leverage available, the high liquidity 24 hours a day and the very low dealing costs associated with trading.
Of course many commercial organisations participate purely due to the currency exposures created by their import and export activities, but the main part of the turnover is accounted for by financial institutions. Investing in foreign exchange remains predominantly the domain of the big professional players in the market - funds, banks and brokers. Nevertheless, any investor with the necessary knowledge of the market's functions can benefit from the advantages stated above.
There are many reasons for the popularity of foreign exchange trading, but among the most important are the leverage available, the high liquidity 24 hours a day and the very low dealing costs associated with trading.
Of course many commercial organisations participate purely due to the currency exposures created by their import and export activities, but the main part of the turnover is accounted for by financial institutions. Investing in foreign exchange remains predominantly the domain of the big professional players in the market - funds, banks and brokers. Nevertheless, any investor with the necessary knowledge of the market's functions can benefit from the advantages stated above.
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