The Importance Of Setting Trading Targets In Forex Trading

May 28, 2018

Trading

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Even the most seasoned of traders can never guarantee with certainty the direction of a market. They can always place predictions on the market. However, to be successful in the long run, the effort has to be from the traders’ end, who figure out different methods of forex trading in different market scenarios and overcome the various hurdles.

The key to making the best returns out of a position is to stay in the market as far as one can and not a moment longer. Traders should always develop the discipline and set targets for their forex trading activity before entering a competitive market like Sri Lanka.

What should be the trading goals that a trader operates with?

Goal 1: Traders should never trade with money that they cannot afford to lose. This is vital to ensure that they do not go bankrupt after a few online trading losses. They should always start with a corpus that can be afforded to be lost while trading.

Goal 2: Setting realistic profit targets should be paramount. Traders should be clear on what they intend to accomplish with their trading account and how they intend to go about it.

Goal 3: Traders should also be clear about the trading volumes they are going to engage in the market every day. They should ensure that at any time only a fraction of their account is exposed to the forex trading market.

Goal 4: Traders should hold a detailed documentation of their trading activity and ensure that every tiny detail of it is carefully scrutinized. This helps traders discern patterns in their trade activity.

Goal 5: It is important for traders to stay on the side of the market momentum and ensure that they derive the maximum gain from it. To accomplish the same, they will have to look out for the trends meticulously and know how a market may sway.

Setting goals while online trading is the hallmark of a seasoned trader. For novice traders, bringing this aspect into their trading routine is highly vital as it aids in long-term success in competitive markets. They can also approach reputed forex brokers in Sri Lanka like WesternFX for the right guidance in developing these attributes.

Trend Determiner for MetaTrader

May 28, 2018

Trading

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Finding the trend on a chart can be subjective. The trend determiner indicator examines the graph for you and reveals what the current trend is, based on objective criteria. Using the trend determiner, you can quickly tell if you are trading with the trend or against it. It also identifies those times when the market is not trending. Theoretically, you could buy with the pattern when the bias is obvious and fade the trend when the market is range-bound. For your reference, a comment appears in the top left corner of the chart detailing the current trend.

This indicator has three trend types bullish, bearish, and sideways. It also qualifies trends as being confirmed or suspect.

With a ConfirmedBullish trend, you can expect the price to go higher. When the direction is SuspectBullish price may go higher or lower this indicates the market is considered to be range-bound. Sideways trends are always range-bound, and they can also be confirmed or suspect. With a ConfirmedBearish trend you can expect the price to go lower and if the pattern is SuspectBearish price may go lower or higher, but the market is range-bound. In general, the market is only trending 15 to 30 percent of the time.

This indicator also, allows you to set alerts, you can set alarms to activate when the trend type you wish initiates; you could also be alerted to any trend change. The indicator also has a verbose mode, which prints out details in the journal tab, such as the price and volume of the fractal bar, along with the test bar.

How does it work? Trend Determiner uses fractals as goal post to determine the trend. The fractal indicator is included in every version of meta trader. When a fractal appears the indicator remembers the value of that fractal. If price surpasses the value of a fractal it runs a test. If a bar tests a fractal point and closes on the other side of the fractal, then the test is considered passed. The indicator then checks the volume of the bar that surpassed the fractal value, if the volume on the bar that passed the fractal value is greater than the value of the volume on the fractal the trend is considered confirmed. Logically, it is confirmed because the traders showed more interest at the point where it passed the fractal value than at the point where the fractal was created. To determine the trend the indicator looks at the value of the prior trend and adjusts it according to the results of the test see tables below.

For example, if the current trend is SuspectSideways and a bullish fractal prints at 1.0678 with a volume of 7333 and a few bars later a bar opens below at 1.0669 and closes at 1.0695 with a volume of 9501, this bar would initiate a trend test. Since the bar closed higher than the up fractal, the trend would turn bullish and since its volume was greater than the volume of the fractal bar the trend would be confirmed. The result would be a trend transition from SuspectSideways to ConfirmedBullish.

Modifying the above example, if the volume on the bullish bar were less than the volume on the fractal bar say 6500, then the trend would still transition to bullish. However, it would be suspect since the volume on the bullish bar did not exceed the volume on the fractal that the test ran on. This behavior shows that there is some possible affinity with lower prices since the volume was higher at a lower price, so proceed with caution when opening up a buy in this position.

5 Forex Tips That Can Save You a Lot of Money

May 28, 2018

Trading

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If you are just getting started as a Forex trader, the 5 tips given in this article will help you out. However, it’s important to keep in mind that they won’t guarantee success. They can save you money, though. Not following any rules may increase your chances of failure. Read on to know more.

Money Management

The first rule that you need to follow is learning to survive. It’s normal for every trader to lose trades but that doesn’t mean you can’t win down the road. Therefore, what you need to make sure is to keep trading.

Many new traders just focus on a trading strategy that can earn them profit. Although having a solid strategy is of paramount importance, using a good money management plan is also important.

As a general rule, if you want to be on the safe side, the highest amount of money that you can risk shouldn’t be more than 3%.

Use a stop loss

As a Forex trader, the stop loss is one of the most powerful tools at your disposal. The stop loss helps you figure out your risk. So, it’s a good idea to make use of it.

Be realistic

You should be realistic. Unless you are lucky, it won’t be possible that you can close 8 out of 10 of your trades earning a good deal of profit within 6 months. But if you have these expectations, know that you are going to get frustrated and disappointed.

So, what you need to do is be realistic right from the beginning. You may want to figure out your chances of success based on your strategy and experience. Moreover, you may want to determine how much time you have to spend on your learning and trading. Once you have a better idea of your conditions and your trading tools, it will be easier for you to have a lucrative trading strategy.

Stay in Touch With other traders

If you are starting out as a trader, know that you can’t overlook the importance of learning from other traders. There is no doubt that reading Forex trading books is a good idea as they can give you a lot of information in a short period of time. As a result, you can build a strong foundation.

To learn things quickly, another important factor to take into account is regular practice. Your fellow traders can give you valuable information about your strategy and methods. So, you may want to network with other traders and stay in touch.

Keep your Cool

Know that you should not make your trading decisions based on your emotions. As said earlier, it can be a lot of fun to trade in the Forex market, but you may not want to get carried away on the way. You may want to approach trading as a business. It’s not your hobby that involves emotions.

Long story short, these are 5 Forex trading strategies that you may want to take into account in order to save money and be a successful trader.

5 Facts About Forex Trading

May 28, 2018

Trading

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As far as the market size is concerned, without any doubt, the Forex market is the biggest market around the world. It boasts an average turnover of over $4 trillion per day. With the passage of time, this big but decentralized market became extremely popular. Primarily, this happened because of a number of innovations in the world of technology over the past few decades. Today, with the help of technology, millions of traders can enter the Foreign exchange market. If you are new to this market, given below are 5 facts that can give you a deeper insight into this business world.

1. Small gains add up

Although Forex is one of the top markets in the word, most traders don’t make huge profits in the beginning. At first, they analyze the market and do a few trades with small amounts of money earning small gains. With the passage of time, the small gains add up. This type of traders has a great deal of trading experience.

Actually, your goal should be to use the right strategy in order to keep earning without suffering from huge losses.

2. The Selection of a reputable broker is important

For an ROI, the Forex market offers an endless pool of opportunities. But it’s really important that you sign the contract with a good reputable broker. By good, we mean a broker who is regulated and licensed. Proper research is required to make sure you hire a broker who is professional and established. They should offer different types of services including good customer support.

3. Emotions are not important

By nature, trading is an emotional undertaking as your hard earned money is at stake on the market that is volatile and unpredictable. But if you enter the market with an emotional mindset, you will be more likely to suffer from failures. Actually, when you are emotional, you tend to make rash decisions.

If you don’t want this to happen, you may want to put together a trading strategy based on a trial trading account, which is known as demo account. In fact, learning to trade objectively is only possible if you set your emotions aside when trading. This will raise your odds of making a return on investment on a regular basis.

4. Insider trading is a false belief

Unlike what most people may have told you, there is no truth in insider trading in the Forex trading market. So, it’s important that you keep in mind that you will have to make your decisions on the basis of the current conditions of the market and the most recent news. In other words, there is no magical way or short cuts to make profits.

5. Simple Strategy Works better

Lastly, if you are looking for a solid approach to gain success in this trading world, you should use a simple strategy instead of a complicated one. In other words, you should opt for a simple but tested strategy on the basis of a deep market analysis. You can apply this strategy throughout your trading career.

Tips to Get Started As a Private Money Lender

May 28, 2018

Finance

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When one is fortunate enough to have capital or money to lend to the people who need it, they best thing that they can do it is to offer it those who have the need and the ideas to use the capital in an innovative and productive manner. This would embark the lender on a journey of private money lending. There is a great demand in the borrowers market for those who may be able to offer private money lending and those who have the capital at their disposal for the use of those who are brimming with ideas and innovations, but are not able to put them into action due to the lack of funds and there are times when these ideas do not get due recognition and encouragement from banks or money lending institutions. In such cases, private money lenders and borrowers are able to find their win-win situation.

While private money lending may be a lucrative alternative, it is essential to make sure that a few points are checked before embarking on the journey to money lending. One of the most important points is to ensure that the trade of private lending is understood in a proper fashion. If the lenders start giving out funds with the hope for getting returns, without having the knowledge of safe lending, the entire exercise may lead them to bad debts and losses. A thorough research on the type of lending and the knowledge of gauging the right candidates for lending is a must. It is also beneficial to a great extent to know other like-minded people. With research about the kind of people who get into private lending it becomes simpler to understand their way of thinking and it also helps in understanding how the field can be tackled with expertise. Finally it is important to know the details and the strong points of investments. Not only does it help in investing in the right idea, it also ensures in knowing how effective the borrowers idea of investment may be.

When Finance companies or Financial Solutions companies are asked for an opinion, they would suggest that the private lending should be done with the help of an expert medium. This implies that when a known and knowledgeable team is involved in the field of finance and lending, the private lender and company may be able to make secure and profitable investments.

If you think you are cut out for the profitable prospects of private money lending and have the resources to match your aspirations, make sure you use the safe embrace of Syndicate Finance to lend your capital.

Neurofinance and the Risk Mindset

May 28, 2018

Finance

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Increasingly the findings from neuroscience are being applied to the world of finance. This is not surprising as neuroscience has plenty to contribute to our understanding of the decision-making process and the financial decisions we make are among the most important.

Expanding our understanding of financial decision-making and how to develop a ‘risk mindset’ can help protect organisations against the type of market booms and busts that plague economies around the world.

Improving financial decision-making

Poor financial decision-making can be damaging at both a personal and a professional level – creating stress in the home and insecurity at work.

Unsurprisingly, low financial literacy levels are a major contributing factor to this; but our own understanding of how we make decisions also affects our decision-making.

Most of us believe that we are able to keep our emotions in check; that we are able to put feelings, emotions, and memories to one side and just base our financial decisions on the cold hard data – the numbers.

Neuroscience has shown us that the brain doesn’t work like that. In fact, our emotions play an important role in decision-making. Consider an occasion when you have been resolute in a decision, but been persuaded otherwise after a talk with a friend, colleague, or family member; emotional reasons often force this change of mind.

When this tendency to make emotional decisions is combined with an increasingly complex financial landscape, where the number of choices for financial products and services is mind-boggling, we begin to understand the risks involved.

Financial service companies need to improve the literacy of their customers. In the past there has been a sense that financial organisations have a vested interest in keeping everything vague and complex, unintelligible to all but a few. But the winning organisations of the future will be educators that simplify their products and services for customers, and raise financial literacy levels.

Recent insights from behavioural economics and neuroscience can assist with designing financial products and marketing campaigns that promote better understanding for customers and employees, encouraging better financial advice, and improving the likelihood of a good financial decision being made.

Developing a ‘risk mindset’

Ensuring that the right financial products are sold to the right people, for the right reasons, and that customers fully understand what they are purchasing, requires a ‘risk mindset’.

This is becoming more necessary as financial regulations become tighter around the world, and financial organisations start to repair the image problems they have experienced in recent years.

But it takes more than just paying ‘lip service’ to regulations; it is about bringing real value to the customer experience.

With the aid of neuroscience and a better understanding of the decision-making process, organisations can:

  • Create a culture where the ‘regulator’ mindset is adopted in a constructive way, using principles that underlie the regulation rather than just blindly following the letter of the law.
  • Re-design incentive schemes less likely to result in mis-selling
  • Develop structured processes and a common language that all areas of the organisation can use to focus on the customer
  • Adapt existing products and services to have a positive impact on the customer experience
  • Foster collaboration and change between and within traditional organisational ‘silos’.