| | submitted by DrewSkyler to Crypto_Talkers [link] [comments] |
 | Hi guys, submitted by getmrmarket to Forex [link] [comments] I have been using reddit for years in my personal life (not trading!) and wanted to give something back in an area where i am an expert. I worked at an investment bank for seven years and joined them as a graduate FX trader so have lots of professional experience, by which i mean I was trained and paid by a big institution to trade on their behalf. This is very different to being a full-time home trader, although that is not to discredit those guys, who can accumulate a good amount of experience/wisdom through self learning. When I get time I'm going to write a mid-length posts on each topic for you guys along the lines of how i was trained. I guess there would be 15-20 topics in total so about 50-60 posts. Feel free to comment or ask questions. The first topic is Risk Management and we'll cover it in three parts Part I
Why it mattersThe first rule of making money through trading is to ensure you do not lose money. Look at any serious hedge fund’s website and they’ll talk about their first priority being “preservation of investor capital.”You have to keep it before you grow it. Strangely, if you look at retail trading websites, for every one article on risk management there are probably fifty on trade selection. This is completely the wrong way around. The great news is that this stuff is pretty simple and process-driven. Anyone can learn and follow best practices. Seriously, avoiding mistakes is one of the most important things: there's not some holy grail system for finding winning trades, rather a routine and fairly boring set of processes that ensure that you are profitable, despite having plenty of losing trades alongside the winners. Capital and position sizingThe first thing you have to know is how much capital you are working with. Let’s say you have $100,000 deposited. This is your maximum trading capital. Your trading capital is not the leveraged amount. It is the amount of money you have deposited and can withdraw or lose.Position sizing is what ensures that a losing streak does not take you out of the market. A rule of thumb is that one should risk no more than 2% of one’s account balance on an individual trade and no more than 8% of one’s account balance on a specific theme. We’ll look at why that’s a rule of thumb later. For now let’s just accept those numbers and look at examples. So we have $100,000 in our account. And we wish to buy EURUSD. We should therefore not be risking more than 2% which $2,000. We look at a technical chart and decide to leave a stop below the monthly low, which is 55 pips below market. We’ll come back to this in a bit. So what should our position size be? We go to the calculator page, select Position Size and enter our details. There are many such calculators online - just google "Pip calculator". https://preview.redd.it/y38zb666e5h51.jpg?width=1200&format=pjpg&auto=webp&s=26e4fe569dc5c1f43ce4c746230c49b138691d14 So the appropriate size is a buy position of 363,636 EURUSD. If it reaches our stop level we know we’ll lose precisely $2,000 or 2% of our capital. You should be using this calculator (or something similar) on every single trade so that you know your risk. Now imagine that we have similar bets on EURJPY and EURGBP, which have also broken above moving averages. Clearly this EUR-momentum is a theme. If it works all three bets are likely to pay off. But if it goes wrong we are likely to lose on all three at once. We are going to look at this concept of correlation in more detail later. The total amount of risk in our portfolio - if all of the trades on this EUR-momentum theme were to hit their stops - should not exceed $8,000 or 8% of total capital. This allows us to go big on themes we like without going bust when the theme does not work. As we’ll see later, many traders only win on 40-60% of trades. So you have to accept losing trades will be common and ensure you size trades so they cannot ruin you. Similarly, like poker players, we should risk more on trades we feel confident about and less on trades that seem less compelling. However, this should always be subject to overall position sizing constraints. For example before you put on each trade you might rate the strength of your conviction in the trade and allocate a position size accordingly: https://preview.redd.it/q2ea6rgae5h51.png?width=1200&format=png&auto=webp&s=4332cb8d0bbbc3d8db972c1f28e8189105393e5b To keep yourself disciplined you should try to ensure that no more than one in twenty trades are graded exceptional and allocated 5% of account balance risk. It really should be a rare moment when all the stars align for you. Notice that the nice thing about dealing in percentages is that it scales. Say you start out with $100,000 but end the year up 50% at $150,000. Now a 1% bet will risk $1,500 rather than $1,000. That makes sense as your capital has grown. It is extremely common for retail accounts to blow-up by making only 4-5 losing trades because they are leveraged at 50:1 and have taken on far too large a position, relative to their account balance. Consider that GBPUSD tends to move 1% each day. If you have an account balance of $10k then it would be crazy to take a position of $500k (50:1 leveraged). A 1% move on $500k is $5k. Two perfectly regular down days in a row — or a single day’s move of 2% — and you will receive a margin call from the broker, have the account closed out, and have lost all your money. Do not let this happen to you. Use position sizing discipline to protect yourself. Kelly CriterionIf you’re wondering - why “about 2%” per trade? - that’s a fair question. Why not 0.5% or 10% or any other number?The Kelly Criterion is a formula that was adapted for use in casinos. If you know the odds of winning and the expected pay-off, it tells you how much you should bet in each round. This is harder than it sounds. Let’s say you could bet on a weighted coin flip, where it lands on heads 60% of the time and tails 40% of the time. The payout is $2 per $1 bet. Well, absolutely you should bet. The odds are in your favour. But if you have, say, $100 it is less obvious how much you should bet to avoid ruin. Say you bet $50, the odds that it could land on tails twice in a row are 16%. You could easily be out after the first two flips. Equally, betting $1 is not going to maximise your advantage. The odds are 60/40 in your favour so only betting $1 is likely too conservative. The Kelly Criterion is a formula that produces the long-run optimal bet size, given the odds. Applying the formula to forex trading looks like this: Position size % = Winning trade % - ( (1- Winning trade %) / Risk-reward ratio If you have recorded hundreds of trades in your journal - see next chapter - you can calculate what this outputs for you specifically. If you don't have hundreds of trades then let’s assume some realistic defaults of Winning trade % being 30% and Risk-reward ratio being 3. The 3 implies your TP is 3x the distance of your stop from entry e.g. 300 pips take profit and 100 pips stop loss. So that’s 0.3 - (1 - 0.3) / 3 = 6.6%. Hold on a second. 6.6% of your account probably feels like a LOT to risk per trade.This is the main observation people have on Kelly: whilst it may optimise the long-run results it doesn’t take into account the pain of drawdowns. It is better thought of as the rational maximum limit. You needn’t go right up to the limit! With a 30% winning trade ratio, the odds of you losing on four trades in a row is nearly one in four. That would result in a drawdown of nearly a quarter of your starting account balance. Could you really stomach that and put on the fifth trade, cool as ice? Most of us could not. Accordingly people tend to reduce the bet size. For example, let’s say you know you would feel emotionally affected by losing 25% of your account. Well, the simplest way is to divide the Kelly output by four. You have effectively hidden 75% of your account balance from Kelly and it is now optimised to avoid a total wipeout of just the 25% it can see. This gives 6.6% / 4 = 1.65%. Of course different trading approaches and different risk appetites will provide different optimal bet sizes but as a rule of thumb something between 1-2% is appropriate for the style and risk appetite of most retail traders. Incidentally be very wary of systems or traders who claim high winning trade % like 80%. Invariably these don’t pass a basic sense-check:
How to use stop losses sensiblyStop losses have a bad reputation amongst the retail community but are absolutely essential to risk management. No serious discretionary trader can operate without them.A stop loss is a resting order, left with the broker, to automatically close your position if it reaches a certain price. For a recap on the various order types visit this chapter. The valid concern with stop losses is that disreputable brokers look for a concentration of stops and then, when the market is close, whipsaw the price through the stop levels so that the clients ‘stop out’ and sell to the broker at a low rate before the market naturally comes back higher. This is referred to as ‘stop hunting’. This would be extremely immoral behaviour and the way to guard against it is to use a highly reputable top-tier broker in a well regulated region such as the UK. Why are stop losses so important? Well, there is no other way to manage risk with certainty. You should always have a pre-determined stop loss before you put on a trade. Not having one is a recipe for disaster: you will find yourself emotionally attached to the trade as it goes against you and it will be extremely hard to cut the loss. This is a well known behavioural bias that we’ll explore in a later chapter. Learning to take a loss and move on rationally is a key lesson for new traders. A common mistake is to think of the market as a personal nemesis. The market, of course, is totally impersonal; it doesn’t care whether you make money or not. Bruce Kovner, founder of the hedge fund Caxton Associates There is an old saying amongst bank traders which is “losers average losers”. It is tempting, having bought EURUSD and seeing it go lower, to buy more. Your average price will improve if you keep buying as it goes lower. If it was cheap before it must be a bargain now, right? Wrong. Where does that end? Always have a pre-determined cut-off point which limits your risk. A level where you know the reason for the trade was proved ‘wrong’ ... and stick to it strictly. If you trade using discretion, use stops. Picking a clear levelWhere you leave your stop loss is key.Typically traders will leave them at big technical levels such as recent highs or lows. For example if EURUSD is trading at 1.1250 and the recent month’s low is 1.1205 then leaving it just below at 1.1200 seems sensible. If you were going long, just below the double bottom support zone seems like a sensible area to leave a stop You want to give it a bit of breathing room as we know support zones often get challenged before the price rallies. This is because lots of traders identify the same zones. You won’t be the only one selling around 1.1200. The “weak hands” who leave their sell stop order at exactly the level are likely to get taken out as the market tests the support. Those who leave it ten or fifteen pips below the level have more breathing room and will survive a quick test of the level before a resumed run-up. Your timeframe and trading style clearly play a part. Here’s a candlestick chart (one candle is one day) for GBPUSD. https://preview.redd.it/moyngdy4f5h51.png?width=1200&format=png&auto=webp&s=91af88da00dd3a09e202880d8029b0ddf04fb802 If you are putting on a trend-following trade you expect to hold for weeks then you need to have a stop loss that can withstand the daily noise. Look at the downtrend on the chart. There were plenty of days in which the price rallied 60 pips or more during the wider downtrend. So having a really tight stop of, say, 25 pips that gets chopped up in noisy short-term moves is not going to work for this kind of trade. You need to use a wider stop and take a smaller position size, determined by the stop level. There are several tools you can use to help you estimate what is a safe distance and we’ll look at those in the next section. There are of course exceptions. For example, if you are doing range-break style trading you might have a really tight stop, set just below the previous range high. https://preview.redd.it/ygy0tko7f5h51.png?width=1200&format=png&auto=webp&s=34af49da61c911befdc0db26af66f6c313556c81 Clearly then where you set stops will depend on your trading style as well as your holding horizons and the volatility of each instrument. Here are some guidelines that can help:
For example if you stop understanding why a product is going up or down and your fundamental thesis has been confirmed wrong, get out. For example, if you are long because you think the central bank is turning hawkish and AUDUSD is going to play catch up with rates … then you hear dovish noises from the central bank and the bond yields retrace lower and back in line with the currency - close your AUDUSD position. You already know your thesis was wrong. No need to give away more money to the market. Coming up in part IIEDIT: part II hereLetting stops breathe When to change a stop Entering and exiting winning positions Risk:reward ratios Risk-adjusted returns Coming up in part IIISqueezes and other risksMarket positioning Bet correlation Crap trades, timeouts and monthly limits *** Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer. |
 | Firstly, thanks for the overwhelming comments and feedback. Genuinely really appreciated. I am pleased 500+ of you find it useful. submitted by getmrmarket to Forex [link] [comments] If you didn't read the first post you can do so here: risk management part I. You'll need to do so in order to make sense of the topic. As ever please comment/reply below with questions or feedback and I'll do my best to get back to you. Part II
Letting stops breatheWe talked earlier about giving a position enough room to breathe so it is not stopped out in day-to-day noise.Let’s consider the chart below and imagine you had a trailing stop. It would be super painful to miss out on the wider move just because you left a stop that was too tight. Imagine being long and stopped out on a meaningless retracement ... ouch! One simple technique is simply to look at your chosen chart - let’s say daily bars. And then look at previous trends and use the measuring tool. Those generally look something like this and then you just click and drag to measure. For example if we wanted to bet on a downtrend on the chart above we might look at the biggest retracement on the previous uptrend. That max drawdown was about 100 pips or just under 1%. So you’d want your stop to be able to withstand at least that. If market conditions have changed - for example if CVIX has risen - and daily ranges are now higher you should incorporate that. If you know a big event is coming up you might think about that, too. The human brain is a remarkable tool and the power of the eye-ball method is not to be dismissed. This is how most discretionary traders do it. There are also more analytical approaches. Some look at the Average True Range (ATR). This attempts to capture the volatility of a pair, typically averaged over a number of sessions. It looks at three separate measures and takes the largest reading. Think of this as a moving average of how much a pair moves. For example, below shows the daily move in EURUSD was around 60 pips before spiking to 140 pips in March. Conditions were clearly far more volatile in March. Accordingly, you would need to leave your stop further away in March and take a correspondingly smaller position size. ATR is available on pretty much all charting systems Professional traders tend to use standard deviation as a measure of volatility instead of ATR. There are advantages and disadvantages to both. Averages are useful but can be misleading when regimes switch (see above chart). Once you have chosen a measure of volatility, stop distance can then be back-tested and optimised. For example does 2x ATR work best or 5x ATR for a given style and time horizon? Discretionary traders may still eye-ball the ATR or standard deviation to get a feeling for how it has changed over time and what ‘normal’ feels like for a chosen study period - daily, weekly, monthly etc. Reasons to change a stopAs a general rule you should be disciplined and not change your stops. Remember - losers average losers. This is really hard at first and we’re going to look at that in more detail later.There are some good reasons to modify stops but they are rare. One reason is if another risk management process demands you stop trading and close positions. We’ll look at this later. In that case just close out your positions at market and take the loss/gains as they are. Another is event risk. If you have some big upcoming data like Non Farm Payrolls that you know can move the market +/- 150 pips and you have no edge going into the release then many traders will take off or scale down their positions. They’ll go back into the positions when the data is out and the market has quietened down after fifteen minutes or so. This is a matter of some debate - many traders consider it a coin toss and argue you win some and lose some and it all averages out. Trailing stops can also be used to ‘lock in’ profits. We looked at those before. As the trade moves in your favour (say up if you are long) the stop loss ratchets with it. This means you may well end up ‘stopping out’ at a profit - as per the below example. The mighty trailing stop loss order It is perfectly reasonable to have your stop loss move in the direction of PNL. This is not exposing you to more risk than you originally were comfortable with. It is taking less and less risk as the trade moves in your favour. Trend-followers in particular love trailing stops. One final question traders ask is what they should do if they get stopped out but still like the trade. Should they try the same trade again a day later for the same reasons? Nope. Look for a different trade rather than getting emotionally wed to the original idea. Let’s say a particular stock looked cheap based on valuation metrics yesterday, you bought, it went down and you got stopped out. Well, it is going to look even better on those same metrics today. Maybe the market just doesn’t respect value at the moment and is driven by momentum. Wait it out. Otherwise, why even have a stop in the first place? Entering and exiting winning positionsTake profits are the opposite of stop losses. They are also resting orders, left with the broker, to automatically close your position if it reaches a certain price.Imagine I’m long EURUSD at 1.1250. If it hits a previous high of 1.1400 (150 pips higher) I will leave a sell order to take profit and close the position. The rookie mistake on take profits is to take profit too early. One should start from the assumption that you will win on no more than half of your trades. Therefore you will need to ensure that you win more on the ones that work than you lose on those that don’t. Sad to say but incredibly common: retail traders often take profits way too early This is going to be the exact opposite of what your emotions want you to do. We are going to look at that in the Psychology of Trading chapter. Remember: let winners run. Just like stops you need to know in advance the level where you will close out at a profit. Then let the trade happen. Don’t override yourself and let emotions force you to take a small profit. A classic mistake to avoid. The trader puts on a trade and it almost stops out before rebounding. As soon as it is slightly in the money they spook and cut out, instead of letting it run to their original take profit. Do not do this. Entering positions with limit ordersThat covers exiting a position but how about getting into one?Take profits can also be left speculatively to enter a position. Sometimes referred to as “bids” (buy orders) or “offers” (sell orders). Imagine the price is 1.1250 and the recent low is 1.1205. You might wish to leave a bid around 1.2010 to enter a long position, if the market reaches that price. This way you don’t need to sit at the computer and wait. Again, typically traders will use tech analysis to identify attractive levels. Again - other traders will cluster with your orders. Just like the stop loss we need to bake that in. So this time if we know everyone is going to buy around the recent low of 1.1205 we might leave the take profit bit a little bit above there at 1.1210 to ensure it gets done. Sure it costs 5 more pips but how mad would you be if the low was 1.1207 and then it rallied a hundred points and you didn’t have the trade on?! There are two more methods that traders often use for entering a position. Scaling in is one such technique. Let’s imagine that you think we are in a long-term bulltrend for AUDUSD but experiencing a brief retracement. You want to take a total position of 500,000 AUD and don’t have a strong view on the current price action. You might therefore leave a series of five bids of 100,000. As the price moves lower each one gets hit. The nice thing about scaling in is it reduces pressure on you to pick the perfect level. Of course the risk is that not all your orders get hit before the price moves higher and you have to trade at-market. Pyramiding is the second technique. Pyramiding is for take profits what a trailing stop loss is to regular stops. It is especially common for momentum traders. Pyramiding into a position means buying more as it goes in your favour Again let’s imagine we’re bullish AUDUSD and want to take a position of 500,000 AUD. Here we add 100,000 when our first signal is reached. Then we add subsequent clips of 100,000 when the trade moves in our favour. We are waiting for confirmation that the move is correct. Obviously this is quite nice as we humans love trading when it goes in our direction. However, the drawback is obvious: we haven’t had the full amount of risk on from the start of the trend. You can see the attractions and drawbacks of both approaches. It is best to experiment and choose techniques that work for your own personal psychology as these will be the easiest for you to stick with and build a disciplined process around. Risk:reward and win ratiosBe extremely skeptical of people who claim to win on 80% of trades. Most traders will win on roughly 50% of trades and lose on 50% of trades. This is why risk management is so important!Once you start keeping a trading journal you’ll be able to see how the win/loss ratio looks for you. Until then, assume you’re typical and that every other trade will lose money. If that is the case then you need to be sure you make more on the wins than you lose on the losses. You can see the effect of this below. A combination of win % and risk:reward ratio determine if you are profitable A typical rule of thumb is that a ratio of 1:3 works well for most traders. That is, if you are prepared to risk 100 pips on your stop you should be setting a take profit at a level that would return you 300 pips. One needn’t be religious about these numbers - 11 pips and 28 pips would be perfectly fine - but they are a guideline. Again - you should still use technical analysis to find meaningful chart levels for both the stop and take profit. Don’t just blindly take your stop distance and do 3x the pips on the other side as your take profit. Use the ratio to set approximate targets and then look for a relevant resistance or support level in that kind of region. Risk-adjusted returnsNot all returns are equal. Suppose you are examining the track record of two traders. Now, both have produced a return of 14% over the year. Not bad!The first trader, however, made hundreds of small bets throughout the year and his cumulative PNL looked like the left image below. The second trader made just one bet — he sold CADJPY at the start of the year — and his PNL looked like the right image below with lots of large drawdowns and volatility. Would you rather have the first trading record or the second? If you were investing money and betting on who would do well next year which would you choose? Of course all sensible people would choose the first trader. Yet if you look only at returns one cannot distinguish between the two. Both are up 14% at that point in time. This is where the Sharpe ratio helps . A high Sharpe ratio indicates that a portfolio has better risk-adjusted performance. One cannot sensibly compare returns without considering the risk taken to earn that return. If I can earn 80% of the return of another investor at only 50% of the risk then a rational investor should simply leverage me at 2x and enjoy 160% of the return at the same level of risk. This is very important in the context of Execution Advisor algorithms (EAs) that are popular in the retail community. You must evaluate historic performance by its risk-adjusted return — not just the nominal return. Incidentally look at the Sharpe ratio of ones that have been live for a year or more ... Otherwise an EA developer could produce two EAs: the first simply buys at 1000:1 leverage on January 1st ; and the second sells in the same manner. At the end of the year, one of them will be discarded and the other will look incredible. Its risk-adjusted return, however, would be abysmal and the odds of repeated success are similarly poor. Sharpe ratioThe Sharpe ratio works like this:
You don’t really need to know how to calculate Sharpe ratios. Good trading software will do this for you. It will either be available in the system by default or you can add a plug-in. VARVAR is another useful measure to help with drawdowns. It stands for Value at Risk. Normally people will use 99% VAR (conservative) or 95% VAR (aggressive). Let’s say you’re long EURUSD and using 95% VAR. The system will look at the historic movement of EURUSD. It might spit out a number of -1.2%. A 5% VAR of -1.2% tells you you should expect to lose 1.2% on 5% of days, whilst 95% of days should be better than that This means it is expected that on 5 days out of 100 (hence the 95%) the portfolio will lose 1.2% or more. This can help you manage your capital by taking appropriately sized positions. Typically you would look at VAR across your portfolio of trades rather than trade by trade. Sharpe ratios and VAR don’t give you the whole picture, though. Legendary fund manager, Howard Marks of Oaktree, notes that, while tools like VAR and Sharpe ratios are helpful and absolutely necessary, the best investors will also overlay their own judgment. Investors can calculate risk metrics like VaR and Sharpe ratios (we use them at Oaktree; they’re the best tools we have), but they shouldn’t put too much faith in them. The bottom line for me is that risk management should be the responsibility of every participant in the investment process, applying experience, judgment and knowledge of the underlying investments.Howard Marks of Oaktree Capital What he’s saying is don’t misplace your common sense. Do use these tools as they are helpful. However, you cannot fully rely on them. Both assume a normal distribution of returns. Whereas in real life you get “black swans” - events that should supposedly happen only once every thousand years but which actually seem to happen fairly often. These outlier events are often referred to as “tail risk”. Don’t make the mistake of saying “well, the model said…” - overlay what the model is telling you with your own common sense and good judgment. Coming up in part IIIAvailable hereSqueezes and other risks Market positioning Bet correlation Crap trades, timeouts and monthly limits *** Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer. |
 | submitted by MxLawal to u/MxLawal [link] [comments] https://preview.redd.it/9fiwhr3in7g51.jpg?width=512&format=pjpg&auto=webp&s=8b015dd89d0db8f7e87c819b1363ccecad041f77 Many people erroneously believed that no one can make profit consistently through forex trading. Often times, they blame others for their losses while forgetting that they are responsible to decide whether their trade ends up in profit or loss. “Champions never complain, they are too busy getting better”– John WoodenFor those who have the right mindset that they are going to be among the few who make a fortune by making profit consistently in the financial markets; they always take up the challenge to identify the problems and find solutions to improve themselves. They always have the inner drive and determination to find their trading mistakes and fix the problems which will help them to improve and become an expert trader. This positive attitude is very crucial in helping a loser to become a winner in forex trading. If people like Warren Buffet and George Soros can make a good life trading the financial markets, why can’t anyone who is ready to learn, consistently review and improve his/her trading plan, do it better?From my own personal experience in trading the financial markets, I want to humbly share the following problems and really hope that it will help other traders to trade better and become winners in forex trading. Although, there may be more, these are the Eight common problems I have encountered and heard many other traders struggle with in their process of making profit consistently in forex trading: (1) Too early entry (Emotional triggers) (2) Too late entry (Doubting your analysis) (3) Too early exit (Panic Take Profit) (4) Too late exit (Greedy delay) (5) Holding on to losing trades against the market trend (Stubborn traps) (6) Using too high lot sizes (Over leveraging your account) (7) Poor money management (Investing more than 2% of your account balance or equity on one trade) (8) Poor risk-reward ratio (Having too many open trades running simultaneously) Steps to diagnose Trading Problems(1) Check your trades at the end of each trading week; mostly on Saturday or Sunday evenings.(2) Review your trading log or Account History. Make sure you are very honest and practical with yourself. This is about money. It is better to criticize yourself very hard than to regret losing your hard-earned money due to cheap errors or mistakes. By honestly following the steps above, you should be able to identify any of the Eight Common problems listed above. This will help you to know which of the problems is most commonly affecting your trading outcome or reducing your profit. When you have successfully discovered this highly important problem or problems (if more than one), then you can focus on solving them sequentially, starting from the most frequent to the least common as revealed during the review of your trading log or Account history weekly. It is important that you never stop conducting the weekly review, so as to constantly learn and improve for better trading. Doing this consistently will help you to personally understand your own psychology and problematic behaviours or habits and also see if you are improving or not. With your commitment to this self-improvement process, you will surely become an expert in forex trading and your capacity to make profit consistently will improve significantly. Then you will become a forex winner for life! “Learn from your losses, and improve your analysis for higher profit”.https://preview.redd.it/qfl1nsikn7g51.jpg?width=512&format=pjpg&auto=webp&s=bc69d61f28ab6b8da8251c1825aecc21bca7e60e Summary If you can carefully follow the steps and work towards avoiding the Eight Common problems mentioned above, there is higher chance that you will be able to trade better and achieve more profits in Forex Trading. Most especially when you choose a reliable forex broker like OlympTrade due to their unique and innovative trading platform. Considering my years of trading experience using the OlympTrade website or mobile App, I sincerely assure you of making consistent profits, if you take personal responsibility by identifying and fixing the Eight Common problems highlighted above. By now, I hope you are more confident that you can make profits consistently and live a good life through forex trading. Thanks for reading and adding your own comment to this article. Trade to win! |
 | submitted by cryptoerapro to u/cryptoerapro [link] [comments] Ought to you jump in and begin using your onerous-mined bitcoins within the markets? Find out the risks and advantages initial.KEY TAKEAWAYS The market is devoted to trading in the globe's currencies. https://preview.redd.it/u8gle9a0m4f51.jpg?width=770&format=pjpg&auto=webp&s=9368e9fe9613884fb4fd0c86fb716e50319f2d53 Many brokers currently settle for bitcoin and different cryptocurrencies. Bitcoin trades benefit from the anonymity and decentralized valuation system the currency represents. They add a replacement layer of risk trading, exacerbated by the acute volatilityStandard Forex Trade Before you think about whether to trade using bitcoin, it's helpful to understand how a standaroretrade works. A forex trade is simply an exchange of 1 currency for an additional at its current rate. Unlike tourists who exchange their home currency for local spending cash, forex traders are trying to form cash off the continual fluctuations in the real value of 1 currency against anothe The key distinction is that, though forex exchanges would possibly be decentralized, the currencies themselves are backed by central banks in the countries that issue them. It's the duty of those banks to stabilize the value of their currencies and keep them stable Now think about an example of a forex trade using bitcoin. First, you open a forex trading account with a broker who accepts bitcoins. These embody AvaTrade,one? eToro, and LiteForex.a pair of? You then transfer 2 bitcoins from your digital wallet to the forex broker’s digital wallet. If you wish to trade using bitcoin, use only a locally regulated forex brokerage. And avoid using leverage till you know what you are doing. Assuming the present bitcoin to U.S. dollar rate is 1 bitcoin = $seven,500, your deposit of two bitcoins is value $fifteen,00zero. Now, assume that you would like to require an edge in British pounds. If the exchange rate is £zero.five = $one, you may receive £7,500. When it rate changes to 0.45, and you square off your position t.sixty five in your trading account. You have got made a tidy eleven.elevenpercent profit and you're prepared to cash out. Despite the very fact that your bet on British pounds earned you an eleven.11% profit (from $fifteen,00zero to $16,66six.65), the fluctuation in the bitcoin to U.S. dollar rate suggests that that you sustain a loss of zero.039 bitcoin or about -two.percent. (Initial deposit of 2 bitcoins — 1.961 bitcoins = .039 bitcoin). However, had the bitcoin to U.S. greenback exchange rate changed to 1 bitcoin = $7,000, you'd realize a benefit from both the forex trade and the bitcoin exchange. You'd have received ($16,66half dozen.65/$7,00zero) = two.381 bitcoins, a profit of nineteen.onepercent. Increased Unpredictability This hypothetical example illustrates the large reason to exercise caution when using digital currencies for forex trading. Even the most fashionable and widely used cryptocurrency, the bitcoin, is highly volatile compared to most traditional currencies. Within the year ending July 24, 20twenty, the value of a bitcoin ranged from $five,532 to $eleven,982 This unpredictability means that that the risks associated with trading forex using bitcoin are that abundant larger Beyond the exchange rate fluctuations impacting profit and loss, there are other edges and risks to consider before trading forex with bitcoin Decentralized Vauations: A major advantage of trading forex with the bitcoin is that the bitcoin isn't tied to a central bank. Digital currencies are free from central geopolitical influence and from macroeconomic issues like country-specific inflation or interest rates. High Leverage: Many forex brokers offer leverage for bitcoin trades. Experienced traders can use this to their profit. However, such high margins ought to also be approached with great caution as they amplify the potential for losses. Low Deposit Amount: A trader can begin with as little as $twenty five with some bitcoin forex trading firms. A few forex trading companies have even offered promotions sort of a matching deposit quantity. Traders ought to check that the broker is legitimate and appropriately regulated. Low Cost of Trading: Most forex brokers that settle for cryptocurrency are keeping brokerage costs terribly low to attract new shoppers. Security: You don’t would like to reveal your bank account or mastercard details to make a bitcoin transaction. This could be a massive advantage in terms of price and monetary security. No World Boundaries: Bitcoin transactions don't have any international boundaries. A trader primarily based in South Africa can trade forex through a broker based mostly within the United Kingdom. Regulatory challenges could stay a concern, however if both traders and brokers are willing to transact, there aren't any geographical boundaries. Risks of Trading Forex with Bitcoin Different Exchange Rates: Bitcoin trades on multiple exchanges and exchange rates vary. Traders must guarantee they understand that bitcoin exchange rates the forex broker can be using. U.S. Dollar Rate Risk: While receiving bitcoin deposits from clients, almost all brokers instantly sell the bitcoins and hold the quantity in U.S. dollars. Even if a trader will not take a forex trade position immediately when the deposit, he or she remains exposed to the bitcoin-to-U.S. dollar rate risk from deposit to withdrawal. Danger of Volatility: Historically, bitcoin prices have exhibited high volatility. Within the absence of regulations, volatility will be used by unregulated brokers to their advantage and a trader’s disadvantage. For example, assume the intraday bitcoin rate fluctuates from $five,00zero to $5,300 U.S. greenbacks per bitcoin. For an incoming deposit of two bitcoins, the unregulated broker may apply very cheap rates to credit the trader $10,00zero (2 bitcoins * $five,000 = $10,000). However, once the trader is ready to create a withdrawal, the broker might use rock bottom exchange rate. Instead of the original a pair of bitcoins deposited, the trader receives o Security Risks Inherent to Bitcoin: Deposited bitcoins are vulnerable to theft by hacking, even from a broker’s digital wallet. To reduce this risk, rummage around for a broker who has insurance protection against theft. Risk of Leverage: Using leverage is risky for new traders who may not perceive the exposure. This risk is not unique to cryptocurrency forex trading and comes into play in traditional forex transactions still. Asset Category Mixing: Cryptocurrency may be a different asset class altogether and has its own valuation mechanism. Trading forex with bitcoins primarily introduces a replacement intermediate currency which will impact profit and loss in unexpected ways. Any cash that's not locked down in an exceedingly trader’s base currency is a risk. Although cryptocurrencies like bitcoin are gaining popularity, there are still several associated risks. In forex trading, dealing in a decentralized currency that provides global transactions with no fees is a bonus. But the tradeoff is actually adding a 3rd currency to what was a trading try Put your trading skills to the take a look at with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your means to the top! Submit trades in an exceedingly virtual setting before you start risking your own cash. Practice trading ways thus that when you're prepared to enter the $64000 market, you've got had the practice you would like. Attempt our Stock Simulator today https://www.cryptoerapro.com/the-bitcoin-trade |
 | submitted by tradeio to u/tradeio [link] [comments] TIO Markets: the next-generation of FX trading. Q : If TIOMarkets is the first company to offer FX trading using crypto, why don't we switch the domain to dot com (.com) instead of dot uk (.uk) ?A >> We are switching to dot com (.com). The website is still in progress. What you see now is not the website that we are going to be launching with. So, don't worry about that. Q : What is the symbiosis between the tradeio and TIOMarkets?A >> The biggest thing that I want to mention is the Liquidity Pool. Although there's different companies, and there's different entities, the registrations are completely different. Even the platforms are different between TIOMarkets and tradeio. However, what happens is as TIOMarkets gets bigger and stronger, and there's more volume, there are more clients. People are trading and the company is making money, the profit from that is going to go back into Liquidity Pool. Anybody on trade.io Liquidity Pool is going to start benefit in a big way when they start seeing that daily income get bigger and bigger. So, I would say that it’s probably the biggest symbiosis there. Q : Tell a little bit about TIOMarkets and how we are planning to make it really big.A >> For TIOMarkets, we have been preparing for the launch for a long time and we really want to make this something very different. We have come up with innovative packages and innovative methods that appeal to traders. Without letting too much of the cat out of the bag, I just want to say that we have actually come up with certain subscription packages that really allow traders to experience some very innovative features and benefits. Not only that, whatever that we are pushing out to our trading community, allows you to be able to trade with really low commissions. Commissions can be as low as 0 per standard lot. And spreads will be very low as well. And not only that, we are pushing out some really very innovative features. We have actually talked to some traders about the features and they loved it. For example, one of the features is that it actually allows you to be able to (what I call), " add an undo" button for your trade. So, just imagine this scenario, imagine that you are actually trading and within the first 60 minutes of you executing your trade, if the market actually goes against you, if you actually took up insurance for the trade (for just a very small insurance premium), you will actually have the ability to undo your trade. And whatever floating losses you had will be reimbursed back to you. Not only that, we believe that traders should be given a chance. Even if they make mistakes. So, just imagine this, within the first month of you trading with us (TIOMarkets), you somehow experience a margin call, or you lose what you put in, what we will do is that we will actually reimburse 50% of your first time deposit back for you to trade again. Why we do this is because we want to make it a point for our traders to have a second chance. We believe that everybody deserves a second chance to be able to learn as they go along. These are just some of the innovative benefits that we have come up with. Q : How is the 10K users target going to be attained, apart from the 3 months free?A >> We are going to start on 2nd of April. We have 6 big pre-registration campaigns and each of those campaigns have a slightly different message, tone and they are going to be targeted to slightly different people target groups. So the idea is, whatever attracts you the most is the thing that helps you to click. So we've got a wide range of messaging, channels and platforms that we're using to get the message out and we are really going to go as big as we can to try and get the numbers in. We really believe that the numbers will be big for a lot of reasons. And just to add to the previous question about what makes us different, some of here at the trade.io office have FX background. Like myself, we have been involved in FX before. We know the industry, we know what talks and what doesn't talk, we know what works and what doesn't work. We have seen that there is a lot of fatigue in the FX industry. The people are sick and tired of attempting to trade, and for various reasons (maybe that trade is not getting through, etc). Any reasons that makes it frustrating for the trader, when they just want to trade FX. And we are coming in here from this angle. We know the industry, we know what's possible and what not possible from a brokerage perspective. We are going to try to completely overcome any of those issues. Our solution to that problem is essentially the subscription package. Here's the theory, that you are trading and where your usual FX brokerage is taking out their commission (maybe they are paying commissions for IB, maybe they are widening the spread, maybe they are taking money from here to try and meet their other target they've got). We are saying that none of that. We are not taking anything out. Our subscription package is very transparent. It is once per month at a fixed cost, you know what exactly that cost is and it is at very good price. And thereafter, your trading is essentially free. This will be really cheap and there will be big savings to be made. This isn't anywhere else in the FX industry at the moment. It will be completely unique to us and it will be something that is extremely attractive to season traders. And for the millennials or the aspiring traders (who don't know how to trade yet), it will be appealing as well because we are saying we know what the issues are, we know what the problems are in FX. If you trade with us, thing are clear, things are clean. We'll support and educate you and you will have a much better overall experience. That’s our positioning. Aside from that, we've got the FCA Regulation, which is absolutely huge. I'm just personally speaking having worked for a couple of FX companies in the past that didn't have the FCA Regulation, it was always something that clients keeps asking for. So that is one that is really significant for us. **Terence adding in to Helen's explanation >> Coming from the viewpoint of a lot of us have in the FX industry, one way or another, we really want to come from the angle where we want to be able to create a perfect trading environment for traders. At this point of time we are putting the focal point on our traders creating an environment which is great from them in terms of trading and not like other brokers out there where the emphasis is mainly on profit. Whatever we do such as the subscription packages and the other innovative features that we have are all from the view of a trader. Q : What makes us stand out from the competitors? A >> Its going to be our subscription package that isn't available anywhere else. Secondly would be the TIO reimburse (that's what Terence talked about before).Next would be the TIO Shield. That is our fancy name for the really cool feature whereby if you trade on a specific currency pair and if it all goes wrong, you will get your money back (essentially minus a small premium). These are the 3 big points that differentiates us aside from the other stuffs I've said about our tone and angle. Q : Should we expect TIOMarkets to be fully operational on the 9th of April? A >> We are opening the doors for pre-registration on the 2nd of April. We've got a little surprise campaign coming out a little earlier than that. That's all I'll say about that for now but then there are 10,000. We don't know exactly when that will be. We believe that it will be sooner rather than later. Even so, one week wouldn't be long enough, so give us a couple of weeks and then we will fully open the doors and let you know when that will be. Q : The profit for trade.io will just come from the subscription and not from the spreads? A >> It comes from both, actually. The profit from the company comes firstly from the subscription packages. And then secondly, we are going to be offering what I am calling an "ala carte" option which is maybe you don’t want to pay monthly, that's fine. You can just trade on-the-go as you go. And the spreads will be a little wider but we're going to be fully transparent and honest about that. So, it's your choice which you prefer to trade. ** Additional point from Helen >> It is going to be green (beginner) user friendly and we're creating some pretty cool educational packages. Pretty much everything we're doing, we are saying right. What is different to what we've done before, what is different to how the others are doing it. How can we make it more interesting, less jargony and more fun. Thus it will be definitely friendlier to new users. Q : Who is our liquidity provider? A >> that is way out of the marketing remit perhaps. We (Helen and Terence) are unable to answer that. Q : What is our plan to get partners onboard? A >> We actually have a very big plan in terms of having joint venture partners and affiliate onboarding because we believe affiliates are going to play a very big part of our whole entire strategy. So we actually have plans that will be launched in Phases. We'll be paying our joint venture partner and affiliates CPA commissions. Those of you who are in the industry will be familiar with that its Cost Per Acquisitions(CPA). So depending of the numbers of traders or clients that you refer to us and which country they are from you will be paid one time CPA commission. This is kind of controversial in the sense of we don't pay out IB commission because what is mentioned earlier, we basically want to create a great trading environment for traders and probably those of you who know that when IB commissions were paid it has to come from somewhere and very often is comes from the traders. So in our case we are just paying one time CPA commission. Later on down the road, we will launch other hybrid commission program as well. In terms of the CPA commission we'll also allow our partners to be able to have sub-affiliates as well down to about 2 tiers. In other words, not only you will be able to refer traders but you will actually be able to refer sub-affiliate as well. Not only that, previously like Helen mentioned we actually have a lot of different funnel which we coming out with and those funnel will be made available to our affiliate as well so we'll be testing those funnels and we'll let you know whichever funnel that works, we'll provide you with the emails plus we provides you with the banners and landing pages. So all you have to do as an affiliates is to mail to our databases or however you're going to drive the traffic to your landing pages and after that the company will take over to help you convert those leads into actual clients for you. It is really exciting in term of the partners. We are giving all the resources they need, we are making the resources as attractive as possible, to make it easiest as possible for them to make lots of money. That will help us a lot. And just as at the partnership side, we've got an exciting addition to the team over here. We've got a new Head of partnership that started with us today in fact and she is a bit of a of a big deal in FX. She has got some of the incredible contacts and networks so that we can really hit the ground when it comes to the partnership. Q : When is our website is going to live?A >> Firstly, we are going to have what we called landing pages go live on the 2nd. They are individual pages not connected to a bigger website specifically and their purpose is specifically to lead generate. So there we will be going live. For the actual website is as you all know is a big project and a work in progress so that’s going to come a bit later. Q : How are we going to differentiate ourselves? A >> I've seen it three or four times now on the chat they are very worried about how we are going to differentiate ourselves. We will! You can trust that we'll because as I said we've been there and we've done that. We've been in FX before. Many of us we don’t want to be like the other brokers. We going to be different not only our offerings and our products but in the way that we express those things. From the tone to the visuals to the actual offerings. It's going to be a breath of fresh air in all aspects apart from the actual platform we're using which is a very well-known very popular platform and of course the instruments are going to be popular instruments that will also be offered by the brokers we can't differentiate there, we don't want to. So, you'll see. Q : Will hedging be available and what is the maximum leverage available ?A >> Yes and the maximum leverage 1:500 Q : Is there any plans to collaborate with another full bright firm like another Forex firm or other to boost our trade volume? A >> No plans to partner with another FX at this stage to boost our trading volume. |
Are you looking for forex broker that allows you to trade with $10 or less? Here is the list of forex brokers that allow you to deposit between $1 - $10 and trade! Broker: Rating: Demo: Leverage: Bonus: Platforms: Min Deposit $ Payments: LiteForex 8: yes: 1:500: 30% + 15%: Metatrader 4, Metatrader 5, WebTerminal: 10: credit cards, wire transfer, litecoin, bitcoin, skrill, neteller, perfect ... When choosing a forex broker for its FX research, remember that quality is just as important as quantity. The best forex brokers provide a great blend of in-house market analysis as well as tier-1 quality third-party research. Best Forex Trading Apps. While nearly all forex brokers have offered mobile apps for years, the difference in quality between a great app and a mediocre app is vast. To ... Forex Broker Types. There exist several types of brokers: Market Maker Brokerage companies and Direct Market Access ones. DMA brokers separated into two types ECN and ECN/STP. Electronic Communication Network (ECN) brokers allow you to trade only between other traders. So if no liquidity is on the market, your trades will get slippage, and you get a requote. ECN system removes the base of the ... Forex Brokers. Free Broker Comparison List and Top 10 FX Brokers 2020 . Find the best Forex Broker and take your trading to the next level. Cheap Windows VPS service provider for Forex Traders (Forex VPS) allows Forex traders to run Metatrader MT4 MT5 Ctrader automated algorithmic strategies, including expert advisors on a (hyper-v) Virtual Machine. Best US Forex Brokers for 2020. To find the best forex brokers in the USA, we created a list of all CFTC registered brokers, then ranked brokers by their Trust Score. Here is our list of the top forex brokers in the United States. IG - Best Overall Broker 2020; TD Ameritrade Forex - Excellent trading platform, US only; FOREX.com - Great ... It is not easy to compare forex broker fees, but we are here to help. Forex brokers can charge commissions, spreads and financing fees. For commissions, there are two versions forex brokers use: All trading fees are included in the spread except the financing rate. Basically, think of it as the broker giving you a wider spread than it gets from the market. You get the market spread, but you ... Get INSANELY low latency on Forex VPS. View your broker locations, ActivTrades, Hugosway, XM, Exness, Tickmill, Apari, Admiral Markets, Dukascopy, Roboforex. November VPS Promotion: Get up to 25% off new orders! Affiliate Program; Careers; Login; EUR/USD: 1.18122 GBP/USD: 1.32583 AUD/USD: 0.72635 USD/JPY: 105.343. Forex VPS Plans ; Dedicated Server; Free Forex VPS; Broker Latency; Low Network ... A Forex broker is an intermediary between a trader and the currency market. Retail foreign exchange trading is not possible without a Forex brokerage. A good broker provides a trading platform, accepts deposits and processes withdrawals, provides leverage, and promptly executes trading orders.Sometimes, FX brokerage companies would also offer education, bonuses, trade copying, and other ... Low costs: ECN trading ist most of the time very cheap with low trading fees. No conflict of interest: The broker is not trading against you. Raw spreads: The broker is offering the real and raw market spreads. No Slippage: ECN prevents slippage; ECN Liquidity providers. Liquidity providers are most of the time big banks or even Forex Brokers by themself. If you ask your broker the support ...
[index] [20875] [22330] [21082] [13739] [6923] [20986] [4169] [4510] [19824] [19212]
Visit http://fxdailyreport.com/top-10-forex-brokers/ - Top ten best and trusted forex trading brokers in the world good for online currency trade business in... Live Forex Trading & Chart Analysis - NY Session August 4, 2020 Conquer Trading & Investing 717 watching Live now Top 10 Best Online Businesses For Beginners - Duration: 18:03. Try the Best MT4 Broker for only $10! Forex Broker -Tradersway: https://www.tradersway.com/?ib=1001407 Are you a beginner Forex and Bitcoin Trader looking fo... What is the Best Forex Broker in the world ? Check these 5 Best Forex Brokers 2020 : https://bit.ly/2WLcuPh There is huge list of forex brokers but finding a... We did a study on more than 100 brokers and found the best forex brokers for scalping. We considered low spreads and commissions, fast execution speed, and r... World best and populer indicators and EA. Most profitable and highly recommended for all kind of Forex and Binary traders. You can buy for cheep price. best binary indicator. X DOUBLER EA BEST EA ... Top 10 zero (no) spread Forex Brokers for traders // Review Find the best no spread forex brokers: https://www.trusted-broker-reviews.com/forex-broker/fore...