Wednesday, December 15, 2010

Trading principles


Trading principles

Some of the most successful investors are wrong in their market opinion more often than they are right. The most important thing is when they are wrong, they accept losses quickly and willingly. But when they are right, they let their profit run and pyramid their profitable trading position(s) by increasing their open position(s).
Rules: Do not over trade. Always keep sufficient capital and hold some funds in reserve.
Why Should You Invest In FOREX?
The following are some of the more popular and conventional investment tools available in the market today. The illustrations below are based on an investment amount or $1,000,000.
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Real Estate Brokerage Fee of 2% = $20,000
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Stocks & Shares Brokerage Fee of 0.75% + 1.25% ( Buy + Sell ) $20,000
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FOREX Only on Trading = US $ 200 per roundturn
Upon careful scrutiny of the above options, it is evident that FOREX is indeed the most cost effective investment tool available today. In addition, regardless of how good or how bad the different economies are, FOREX presents ample opportunities for capital maximization.
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The FOREX Market is never saturated, and it's provides opportunities to profit from buying at a low price and selling at a higher price or selling at a high price and then buying back at a lower price depending on whether the currency market is moving in an upward or downward trend.
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Next to cash itself, it is the Best Form of Liquidity.
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As illustrated above, it has the Lowest Transaction Cost
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It is a Highly Flexible Investment tool.
There is the ability to Cut-loss and reduce loss at anytime.
The Forex Market is also the largest financial market in the world with average daily transaction estimated at US$ 3.2 Trillion. It has been shown that no single person or any central bank or any one country can affect the market. The Forex Market is governed by its own rules

 Differences Between Stock And Forex

 FOREX
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Two-way trading market
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Twenty hour market
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Only 0.5%-1% of the total amount traded is required as a margin deposit, to begin trading.
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Dealing in an international market where buyers and sellers are ever present.
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Contracts can be closed/ liquidated on same or on any other day of one's choice.
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Interest is paid daily based on number of days the position is held in trade.
Brokerage fee is based on a fixed amount per lot traded.
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Open trading-International Market place.
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Locking is available.