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Anything About Forex That You Cannot Comprehend?

June 18, 2012 by

The less discussed but nonetheless important feature of the foreign exchange market is that it has such a strong attractive power that many non-professional traders rush to jump into live account trading as soon as possible. Even with only superficial knowledge of the market’s underlying mechanics. Needless to say that it is a rather wrong thing to do. Like in every other field of expertise, FX requires complete understanding of its ins and outs in order to achieve a stable rate of success.

For example, some people fail to grasp the concept of margin trading — they understand that leverage is helping them to open bigger positions but cannot get how and why it is provided by the brokers. Others do not understand spreads — where do they come from and how they affect their trading. The same is often the case with the overnight interest rates (or swaps, or rollover rates).

Those who read enough about the basic Forex concepts may stumble on some of the less common aspects — such as hedging (or position locking), pyramiding, scaling positions, etc. Even though many currency traders know what the terms mean and even apply the techniques described by these terms, they rarely fully understand the every nuance of using them. And how about you?

Is there anything in Forex that you do not understand?

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If you have some questions about some of the essential concepts related to Forex trading, please feel free to ask them using the form below.

2 Responses to “Anything About Forex That You Cannot Comprehend?”

  1. Trading Market Online

    There has to be a full understanding of the human psychology to make profits in this market. Novice trader should observe the behavior of the market for many months in order to find those rare edges that can be used in trading. Most of the time it is just noise that don’t have any meaning but from time to time markets begin to trend and that is where real money can be made.

    Reply

  2. Muslim Trader

    Mind will process anything our hearts burst. In forex trading, the majority of amateur traders trade with the target: I want to become a millionaire, I get rich. Mind to the process but normally induced heart mind will ‘hang’ for how to realize the matter if there is no knowledge?

    So, if you want to be an excellent trader, say this to yourself: I trade for KNOWLEDGE. Induced understand the mind and will facilitate the knowledge we receive forex trade. Trade with knowledge and Trade for the Rich are two different acts. Typically, individuals who trade for the rich are often Loss and Margin Call.

    Reply

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