The Best Foreign Currency Brokers Available
Foreign currency brokers, for the most part, are in operation to help you succeed. It’s not a different level of integrity they operate with; it’s solely for monetary reasons. A fair business practice means that they will make money. And if they’re making money, that means you’re making money, and everyone can be happy. Make sure that you choose a regulated currency broker, check on various message boards, a currency broker review site, blogs, etc, to ensure the candidate has had good results in past dealings.
A regulated currency broker who offers you a great exchange rate, charges no commission, is fast and thorough with your transactions, and is all-around a good, friendly person to deal with, is the ideal broker for you. If you can’t find this, then continue to search. The right currency broker is out there and waiting for you.
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Shopping the Right Online FX Broker
Deciding which online currency broker is right for you can be a challenge. On message boards, groups, and various blogs all over the internet, currency brokers from Switzerland are thought to be superior in some aspects of foreign currency trading. If a Swiss currency broker sounds right to you, then it’s time to start some more detailed research to select the best currency broker available – even if your broker’s not Swiss. This is a process which should not be ignored. Take your time to measure each candidate individually and always remember what you need and what you don’t
Compare brokers online and evaluate their exchange rates. You always want to be dead sure that your potential broker is able to offer you a great currency exchange rate. Established brokers that are dealing with multiple types of currencies every day can often offer you much better exchange results than individual agencies. When you contact your prospected broker, ask them about the types of exchange rates they are currently offering, and how they can keep those rates as low as possible for you. Try to avoid any agency or individual forex currency brokers who is offering low rates for a limited amount of time. You don’t want your chosen broker to suddenly up the rates, leaving your profit margin slimmer and slimmer.
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Money Management Principles
One of the worst blunders that forex traders can make is attempting to trade without sufficient capital.
The trader with limited capital not only will be a worried trader, always looking to minimize losses beyond the point of realistic trading, but he will also frequently be taken out of the trading game before he can realize any sense of success trading the method(s) or patterns.
Exercise Discipline
Discipline is probably one of the most overused words in forex trading education. However, despite the clich¨¦, discipline continues to be the most important behaviour one can master to become a profitable trader. Discipline is the ability to plan your work and work your plan.
It¡¯s the ability to give your trade the time to develop without hastily taking yourself out of the market simply because you are uncomfortable with risk. Discipline is also the ability to continue to trade the methods and patterns even after you¡¯ve suffered losses. Do your best to cultivate the degree of discipline required to be a world-class trader.
Employ Risk-to-Reward Ratios
The following shows you possible risk-to reward ratios, and the win ratios required to break even in a trading system.
Risk-to-Reward Ratio (in pips)and Win Ratio Required to Break Even(%)
40/20 (2 to 1) = 67%, 40/40 (1 to1) = 50%, 40/60 (1 to 1.5) = 40%,
40/80 (1 to 2) = 33.5%,
60/20 (3 to 1) = 75%,
60/60 (1 to 1) = 50%,
60 /90 (1 to 1.5) = 40%,
60/120 (1 to 2) = 33.5%
Important Note
Never risk more pips on a trade then you plan to make. It doesn¡¯t make sense to risk 100 pips in order to make only 10. Why? See below example.
Profit taking level (pips): 10
Stop used or pips at risk: 100
You win 10 times which makes 100 winning pips. You ONLY lose once and have to give back all profits!!!
This type of trading makes no sense and you will lose on the long term guaranteed!
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