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Monday, 21 November 2016

Usain: Forex trading Brand Ambassador

Trading just got a speed boost from World-famous sprinter, Jamaican Usain Bolt. It may seem unlikely to associate the sprinter with Trading but read on and you will get the similarities.

Usain bolt continues to make his speed enlarge his circle of influence and thus gain even more popularity. Recently he he signed a deal with world-famous Forex broker XM trading. XM is now the official sponsor for Usain bolt making him their Official Brand Ambassador. XM boasts robust technology and speed for trading and Usain will depict such as their ambassador. This is unprecedented for the Lanky Jamaican sprinter who will retire soon from all internal sporting competitions.

It is unorthodox to associate Usain with Forex Trading, however, being a speed demon setting and breaking his own 100m and 200m Olympic and world championship records, Usain's demonstration of blistering speed is what XM represents. Speed is extremely critical in the trading arena in executing trade orders. Also it involves earnings and both XM and Usain will earn a huge amount from this deal.

Read the full story by clicking on the here or on the image below.

Saturday, 8 October 2016

Your Trading Plan

3 Questions To Find Your Trading Plan 

By Cory Mitchell

You have put in the work creating a trading plan or possibly spent money on supposedly great strategies, but you still cannot seem to turn a trading profit. Or maybe you are starting out in trading and investing and want to be cautious before you start putting real money on the line. No matter what level you are at, before you trade - or if are already trading and struggling - you should have a trading plan. That plan needs to be tailored to you and your needs; a plan that is not will likely result in a drain on your trading account.

The following three questions can save you a lot of grief. Run through these questions during your planning stages to make sure your plan will serve you well. If it cannot pass this three question test, it should not be used.

Why Ask These Questions?

Executing a plan is not just about the design itself, it is about the person executing that plan. Someone can search their whole life for a great trading system, not realizing it is themselves that need work, not the system. Therefore, these questions take the plan and the trader into account, making sure the two fit together. No matter how good a trading plan, it is useless if the trader cannot personally stick to it or implement it properly.

These three questions will help to clarify the trader's objectives for the trading plan, take inventory of the consequences which may arise by executing the plan, and determine if they will be able to even stick with their plan, given their personality.

1. "Does the Plan Allow Me to Achieve the Outcome I Want?"

Sounds simple enough, but not so fast.

An outcome needs to be specific and measurable. Stipulating "I want to be rich" is not concise enough. What is the ultimate goal that you want your trading plan to bring you? Is the outcome feasible and reasonable? Can the plan you currently have actually produce that, or given the realities of the plan is it likely to fall short of the outcome you desire?

The plan and outcome must also balance short-term and long-term goals. While the long-term goal may be to be financially independent, continually trying to make as much money as possible in the short-term with high risk trades could jeopardize the long-term goal. Short-term goals must work in harmony with the long-term goals, not against them. Brainstorm what you want your trading plan to produce and make sure that the plan works to satisfy both the short and long-term desired outcomes.

2. "What Are the Consequences and Risks of My Plan, and Can I Deal with Them?"

In this step we strip away the fantasy and focus on reality. The fact is most traders lose money - even very smart ones - so how is your plan different? All plans have risk; what is the downside of the strategies you have employed? Go through the plan and write down all of the risks and pitfalls you see.

Now, also consider consequences outside of trading. Will realizing your plan mean you spend less time with family or friends? Will it mean cutting back on certain expenses? Will it create more stress (less stress) or cut into other work time?

Once all the potential risk and pitfalls of your strategy have been fully and honestly addressed, can you realistically handle all the potential consequences of trading this plan? If so, proceed. If not, rework the plan making sure the consequences of your plan are within your personal tolerance.

3. "Does the Plan Account for Me Being Me?"

This is the most important question, as ultimately you must be able to implement the plan. A plan means nothing if you cannot execute it.

If you cannot sit in front of a screen for more than 30 minutes, no matter how good your plan is you will likely not be a good day trader. Or, if you cannot sleep at night with an open position, your swing trading plan will likely do you no good. You will continually struggle to adhere to it.

We each have different traits and tendencies. If you have a gambling streak, account for this in your plan - maybe have a demo account off to the side (or have a play money poker game open) so you can satisfy your gambling craving without losing real money. Plan and account for everything.

Be brutally honest, and make sure your trading plan accounts for the market and yourself. Accept yourself for your tendencies, and make sure that the plan can actually be employed by you based on who you are. Do not sugar coat anything, as doing so could result in problems down the road.

If the plan is easy to implement for you and fits with who you are, use the plan. If you do not think you will be able to stick to it, come up with a plan you can follow.

The Bottom Line

A trading plan is only as good as the trader who implements it. The plan and trader must mesh, or the trader will be unable to implement the plan and it will be useless. To make sure the trading plan fits, the trader must pass the plan through three questions: Does the plan achieve the outcome I want? Can I handle the consequences of the plan? Does the plan account for me being me? If the plan can pass through all of these questions, the trader has a much better chance of being able to actually follow through with their investment strategy and is more likely to experience success in the markets.

Read more: 3 Questions To Find Your Trading Plan | Investopedia
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Monday, 26 September 2016

Don't compare yourself to others

This is ash article from my favorite trading learning source.

Stop Comparing Yourself to Other Traders!

Ages ago, horsemen invented blinders to keep their horses focused on their work. Blinders are pieces of leather attached to the horse’s bridle that prevent them from seeing anything except what’s in front of them.

Without blinders, a horse can see almost completely behind itself without turning its head and can be easily spooked by movement or objects it doesn’t recognize. By having fewer distractions, the horse is more dependable and stays focused on getting the job done.

As a trader, I found that whenever I started comparing my trading performance with other forex traders, my performance would usually worsen. This “distraction” typically led to losses for both my trading account and mojo.

Back when there was no Netflix, Amazon Prime, or Hulu available and Oprah was one of the most interesting people on TV, I chanced upon one of her interviews. In it a woman was sharing how comparing herself to other folks in her business always made her take a step back from her goal. Her words made me realize that the concept applies to our everyday lives.

Don’t compare yourself to others. It’s tempting in the modern, competitive world to constantly ask, “How am I doing?” and to gauge your success based on how the rest of your peers are faring. If you spend too much time on Facebook checking out which of your friends have bought brand-new cars or are enjoying extended multi-city vacations, then you might just feel bad about not “living the life” like they’re doing.

It’s easier said than done, but you should NOT allow how well you do compared to others affect how you feel about your inner worth and feelings of success in life.

Comparisons are useless. Run your own race.

You alone can hone your forex trading skills. What works for others may not necessarily work for you. You must find a method of your own, one that matches your trading skill and personality. Remember that comparisons will only make you feel frustrated and distract you from forging your own path to profitability.

Don’t think you are trying to beat others to an imaginary finish line. People who achieve great things work independently and on their own terms. They don’t care how others are doing. They follow their own timeline, their own passion, and look INWARD for where to go next.

Notice how I said inward, and not outward. They look inward for where to go next.

How you perform has nothing to do with how others perform. All comparisons will do is torture you. You will feel jealousy or envy. When you see that you are doing relatively poorly compared to a fellow trader, you are likely to think distracting thoughts such as, “Why can’t I do as well?” or “I must not be as good of a forex trader as I had thought.”

To maintain motivation, focus on improving your past performance record, rather than looking at how other traders are doing.

You usually don’t know what factors created their performance records, so comparisons can only mislead and hinder you. They could just be on a lucky streak or have a market wizard standing right behind them on every forex trade providing advice.

Put your “blinders” on. Don’t look at anyone else’s record but your own. Everyone has a different learning curve.

Run your own race and finish at your own pace.

Thursday, 8 September 2016

Surviving a Loss

Reality Check

There won't always be winning days, there will be a day where you lose and it could be big. That's the harsh reality of Forex Trading and the sooner you recognize it the better able you will be to deal with the loss when it comes.

As much as i can warn you of the ups and DOWNS of trading you will need to be prepared for it and the effects. However, Nothing can entirely prepare you for it till it happens. You can be sensitized and you can understand that it will happen but all you can do is put things in place for when it does. The key is to always survive a loss. In trading, as with everything in life, everyone can enjoy the good times, the +300 pip gain, the 4 weeks uptrend that you have been riding but the true trader is the one that can withstand 1 or 2 or even 3 huge losses and continue trading according to plan.

Reducing Recovery time

After a loss has occurred whether it has wiped some, most or all of your account the key is to recover in the shortest possible time and always keep reducing your recovery time. The longer you take to recover the more emotions set in and the psychological impact increases. People tend to think a lot over time and this thinking time can drive fear through your trading machinery which can be extremely devastating.

   Check where you went wrong

   Recovery should begin by checking what went wrong and where. If you did something wrong then do what is necessary not to repeat it. If the market was off then ensure to check all market conditions prior to trading. Check through the anatomy of the losing trade so that it doesn't reoccur. This is the beginning of reducing losses in any aspect of life, business and trading:-Identifying the cause.

   Remove Emotions

Emotions are a no-no in trading. Emotional traders are gamblers and lose a lot more than they profit. Step by step, eliminate trading with emotions as it can lead to revenge trading which is a downward spiral of your account. The best way to eliminate emotional trading is to stick to a set of rules.

Always Stick to Plan 

There's nothing more essential to recovering from a loss, or preventing a particular loss in the first place, as a sound and effective trading plan. Your trading plan is your blueprint to create your trading estate. For more info on the importance of a trading plan click here. Even if you lose off of a few trades sticking to a well defined and sensible plan can overcome those losses easily and get back to increasing  your profit margin.

Win/Loss Ratio (P/L)

Pay attention to your Profit and Loss and not necessarily to individual trades although each trade contributes to either a profit or a loss. Your P/L tells what kinda of standing your account is in and how good or great of a trader you are. Keep your average losses to a minimum and ensure your trading plan is effective in increasing your P/L ratio.

Wednesday, 24 August 2016

PAMM: How to invest while you are busy.

What is PAMM?

Lets say you have some money to invest or trade but don't have the time to do it yourself. PAMM fixes that issue for you by allowing you use what is called a Percent Allocation Money Management account to invest in other traders.
As the name suggests a percentage of the profits earned is given to the person trading while the majority of the profit is for you, the investor.

    Trade without trading

PAMM accounts allow you to trade without doing it yourself. It frees up time for you and allows you to earn. This is an excellent choice for fast-paced career persons who are seeking a way to multiply their money.


       The advantages of opening a PAMM account is magnificent. Just imagine making money while doing something else. This is perfect for a lot of persons, even for me. Allow your money to work for you for once.
     With this kind of account you still have full control over your money. You decide when to close your account, when to choose a different fund manager, whether or not to compound profits and the list goes on.


You have the flexibility of choosing any PAMM money manager you want. Each manager's track record is shown so you know where you are putting your money. There's also flexibility in the term life of your investment. Instead of having your money tied up for years you have from a minimum of 30 days up to hold your cash in that account.


All PAMM account managers are regulated by the brokers and they can't get a percentage unless they make a profit. With the brokers'strict regulations each account manager is ensured to be transparent. Manager only gets paid if there's a profit so you don't have to worry about paying the amount manager as they get money only when they make you money.
Each PAMM account manager had to invest their money in the account as well which means they have vested interest in seeing the account making profits.


       As with anything forex related there is always a chance that you may lose your investment. Nothing is ever really a guarantee and past performance doesn't necessarily predict future results.

Investments aren't risky, investors are. So please choose an account manager carefully.

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Monday, 8 August 2016

4 Steps to Shift to Full-Time Trading

One of the more popular topics in the forums is the possibility of making a living from trading. Believe it or not, there ARE traders who are making enough moolah from trading alone.
But not everyone can hack that kind of lifestyle. Like any other business, forex trading has its pitfalls that could eat up the hard-earned money of newbies who have jumped into it without enough knowledge and preparation.
If you’re determined to make full-time trading work for you though, then here are four simple steps you can take.

1. Ask yourself if you’re ready for full-time trading

Consider the logistics of trading full time. Do you have enough capital? Imagine months of not getting salary and not making profits while STILL having to pay for your food, rent, utilities, and Netflix and Amazon Prime subscriptions. Can’t live without your job yet? Can’t afford to take big drawdowns for weeks and still maintain your lifestyle? Don’t do it.
Have you spent enough time trading live? Before you take the plunge, make sure that you’ve found brokers that you can trust and trading strategies (yes, that’s plural) that have yielded you profits across all types of trading conditions. Of course, it goes without saying that you should have experienced being CONSISTENTLY PROFITABLE before trading full time.
Shifting to full-time trading also requires conviction. Do you REALLY want to be a forex trader? You shouldn’t just trade because you know that if you don’t, you won’t have a day job to go back to. Are you prepared to weather months of not making money? How about doing forex-related research all day every day? If you think that you’re only in it for the profits and lifestyle-friendly hours, then you shouldn’t take the leap just yet.

2. Make realistic goals.

When you’ve determined that full-time trading is for you, then you should start listing down goals and plans. It’s easy to imagine yourself buying cars, yachts, and private planes in your first two years of trading but we all know that it’s not that easy.
Do some research on other full-time traders and find out how long it took them to make a living from their trades. Also, base your trading goals on your past performances and the possible market scenarios that you see for the next couple of years. Based on your profits from when you were trading part time, can you fund a full-time trader lifestyle? How much profit are you expecting in a year? Five years? Do you think they’re realistic?

3. Prepare for a lifestyle change

If you want to be a full-time trader, make sure that you’re psychologically prepared for it and how it may affect those around you.
Unless you’re sharing an office with friends or you plan on trading in co-working spaces, you’ll likely trade at home. Remember that home-based trading is not without its struggles.
Are you okay with trading by yourself all day every day or do you need more interaction in your daily routine? Can you concentrate on trading even when your game consoles are a few feet away? Can your parents/spouse/children/housemates give you the time and space you need to set up an office? Can you maintain a working schedule at home? If you’ve said “NO” to at least one of these, then you might want to make adjustments before trading full time.

4. Treat trading as a business

The most difficult part of full-time trading is remembering to treat it as a business.
Sure you can wear muscle shirts and pajamas in front of your screens but that doesn’t make full-time trading anything less serious than any other source of income.
Establish an office space, minimize distractions, and be disciplined about your “working hours.” More importantly, keep track of your expenses (spreads, trading platform, broker fees, etc), monitor your profits, and keep a trading journal to track your mistakes and progress.

Making money from trading alone may sound daunting and exhausting – probably because it IS daunting and exhausting! But if you’ve mentally and financially prepared yourself and you have develop a trading framework to guide you to profits in the long run, then there’s no reason why you can’t be one of the traders who will achieved financial independence through trading.

Courtesy of

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Monday, 1 August 2016

VPS: securely trade anywhere

What is VPS?

VPS stands for Virtual Private Server, it is a special type of server that is set up on a computer with several other private servers. Essentially one physical computer is split into several virtual computers. With your own VPS you have the flexibility to install your own operating system. You can set it up anyway you choose with whatever programs you want to install. It's like having your own computer existing on virtual space. VPS is mostly referred to when dealing with web hosting and business enterprises. However VPS can be beneficial to forex traders as well.

How is it beneficial to traders?

Having a VPS empowers your trading game in a number of ways, some of which are discussed below.

   1) Anywhere/Anytime Trading

With a VPS it doesn't matter where you are operating from, you have the power to trade as long as you have internet access. You are able to login to your VPS, open your trading platform and execute your trading plan. Whether you are on the beach, in a plane or in a hotel, your trading day can be done like you are in office or at home.

   2) Trades are secure

Due to the rigorous security checks that companies has to go through before offering VPS service your VPS is protected against all malware and other security threats. You are able to execute your trades without worrying about any security issues.

  3) Trade even with power outages

Lets say you're trading and the power goes out. This may affect your trades if you are using your desktop at home. With a VPS power outages won't affect your trades as VPS providers boast a 99.99% uptime guarantee. A VPS provider uses a number of power backup services that allows them to be 'resistant' to power outages. Therefore you don't have to worry about losing out on any trading opps when using a VPS.

A VPS is extremely beneficial to trading but it comes at a cost. It may be expensive to get a high-end VPS however it is a worthwhile investment.

Let us know if you use a VPS and how it benefits you. Stay tuned for our next blog on how maximize your trading using another very effective tool/service.

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Sunday, 24 July 2016

Binary Options: Blitz game of Forex

What if you could maximize your profits in a shorter time? Lets say Make in 2 hours what you normally make in 2 days. Would that be more your style of trading?

What is binary options?

Binary options is still Forex trading but at small time intervals and only 2 options to choose from as the name binary suggests. Traders only tell whether a currency pair will go up or down in a given time and if they are correct then they will gain a huge profit.
Binary Options is to Forex what 20twenty is to cricket. It is the short, high stakes, blitz version that has extremely high risk and extremely high rewards. Most binary options brokers offer profit margin upwards of 60% returns on initial trade cost. So for instance a trader can make $60 and upwards on every $100 traded provided they get each trade correct.

How to benefit from binary options

Binary options can seem risky for the person who doesn't know how to trade it. Risk in trading is only increased by limited knowledge. Knowledge gives an advantage and is the best tool to use. With that said reducing your risk in trading binary options includes increasing your knowledge of it and how to trade it.
Although binary options is a faster version of Forex trading there are strategies to employ when trading. One such strategy is the Martingale strategy that has proven to work over and over again. it involves double each trade till you get the winning one to cover any previous losing trades. This strategy is actually from the betting world has proven to be effective trading binary options. It can be tweaked to your trading style and risk appetite. Lets say you use 5$ for your first trade, if you lose then you place the second trade for $10 and keep doubling till you win. This method is fast and doesn't require a lot of technical analysis to place a trade.

For traders who don't believe in the martingale strategy, trading binary options can be done in a similar way as day/swing trading. Traders can use indicators and expert advisors (trading robots) to maximize their trading profits.Some bots can be risky while others can give huge returns in a short time. It is recommended to test trading robots on a demo account before using your live cash.

Another benefit from Binary options is that opening an account requires less capital or rather less minimum opening Balance than opening a standard trading account with a low leverage. With this advantage most broker platforms allows you to open trade with a minimum of $1.

Difference in trading styles

Based on the rush of trading Binary options versus Day/Swing trading it will require a different approach to each trading options. Binary options happens quickly, both winning and losing and as such you should prepare for both sides. Your trading style should reflect your trading timeframe, entity being traded and your risk management.

There's a contrast in trading styles with binary options as opposed to day/swing trading. Binary options strategies can be a lot less analytical as well as they require you to make trading choices quickly. When you open a trade you exactly what time it will end in contrast to day trading where you set a stop loss or take profit.

Your trading style should make an attempt to limit emotional trading as this will damage your win-loss ratio. Emotions should be eliminated from trading if possible. Always use numbers to drive your trading career. Practice until you are comfortable before you go live, make all the mistakes in your demo account or atleast most of them, test all strategies and see which one you are more.

What can be traded

The majority of Binary Options brokers provide all the Major currency pairs along with some precious metals. Other brokers will also provide some currency crosses as well as some exotic currencies.

  Major Currency Pairs

EUR/USD: The euro and the U.S. dollar.
USD/JPY: The U.S. dollar and the Japanese yen.
GBP/USD: The British pound sterling and the U.S. dollar.
USD/CHF: The U.S. dollar and the Swiss franc.

Set daily goals

As in everything else that you do you should trading goals when trading binary options as well. A couple of my trading friends have set daily trading targets to work towards. This way you can control your trading so that it doesn't drown out the rest for your life.

The good thing about setting goals is that you know exactly what you are working towards which is most important. With Binary options you can start with small goals let say $30 per day and increase it as your trading career, strategy and confidence increases. After some time you will be making in 2 hours what you would make in 2 days.

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Monday, 18 July 2016

Leveraging for profit

What is Leverage?

Leveraging is putting down collaterals to hold a place that is larger in value. This collateral is known as margin. To simply put, leverage gives traders the ability to purchase quantities of currency without having the equivalent in money. Leveraging allow traders to have a larger exposure on the market for a small amount of money. This type of trading is used to yield higher returns on a small initial deposit that could not have been possible if the currency was bought physically. While it yields higher returns, it could also result in higher losses. This dual nature of leveraging is mostly due to the fact that the higher the leverage on the deposit amount the greater the risk. Leveraging is also called the two-edged sword so it should always be used with caution.
Leveraging is done in ratios known as leverage ratio. Some of these typical ratios are 50:1, 100:1, 200:1, 400:1 and 500:1. What this means is that for dollars invested in the account, the broker should enter trades that allows for a profit of 50 or 100 times the money for 50:1 or 100:1 leverage. The ratios are equivalent to margins and are expressed in percentage. The margin comes from dividing the ratios and multiplying it by 100 (ex. 1/50*100=2%). These margins are generally set by the broker and establishes the base line amount necessary in the account before trading is initiated.  It is important to note that if the leveraging ratio changes so does the margin present on the account.

How to leverage

Though leveraging appears very simple from the outside it is actually very complex mostly on the broker side. For the broker who has the task of setting leverage ratios, it involves the broker looking at all the assets and the capital they accumulatively generate in order for the company to meet its financial obligations. This is then wagered against the potential earnings that can be produce by each account. These accounts made by the broker assist investors in determining the kind of leverage that they want on their money.

The accounts generally starts from a mini account that is low risk/low leverage and as such comes with a minimal profit per pip, it extends to accounts such as super max where the risk is high and the potential profit is even greater. However brokers always ensure that the account maintains the margin required for trading.

On the investor side it is less complicated as all that is required is for the investor to do is choose from the broker’s pre-existing account types base on the leverage that is wanted on their money and the risk they want to take on. However it gets a bit complicated as different accounts will have a variety of investment options and investors have to choose the one that best suits their needs.

What to leverage?

There are a number of things that can be leveraged by a trader to make their account more profitable. Each trade should choose their method of leverage carefully base on their risk appetite. A number of different leverage methods can be combined so as to spread or reduce the risk.

  Broker leverage

As discussed previously a trader uses broker leverage by selecting a specific account. Each broker has different types of accounts that provides different leverage and margins. By selecting a specific account you can open your account with the minimum ain't specific by the broker. It is always recommended to have a risk management plan and also to recognize that when leverage changes, risk changes.


Traders can also leverage trading signals. A huge amount of signal sources exist and it is up to you as the trader to use one that is in line with your trading plan.
Trading signals can be subscribed to from within metatrader, from their signals website or from another ingredient source such as bkforex.

  Mentor/Other Traders

Traders can also leverage other traders to enhance there trading game. Having mentor means having someone with more experience than you do to assist you in becoming more profitable. A mentor will be able to spot more opportunities than you or be able to recommend more high probability trades. A mentor doesn't necessarily have to be someone you speak with everyday, it could be that you subscribe to a service such as that provided by csquared trading or follow someone from their YouTube postings.
You can also leverage the ability of other traders through social trading or becoming part of an association. An amazing social trading platform that allows you to copy other traders is etoro. With this platform you can benefit from the profitability of other traders without even placing a single trade.

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Tuesday, 5 July 2016

Mid-Year Check: Are You Meeting Your Trading Goals?

Courtesy of
Can you believe it’s July?! With half of the year behind us, it’s time to look back on the trading goals that you made at the beginning of the year and see if you need to make changes to your goals, trading processes, or strategies. Here are some tips to get you started!

1. Review your trading performance.

You’ll need information before you can make any changes, so whip out that trading journal that you painstakingly kept through the year. What, don’t have one? Shame on you, but there’s no better time than now to start one at!
If you’re a good trader and you do have one, look back on your 2016 trading goals. Based on your stats, do you think you’re on track to meet them? Which processes can you improve on?
Are you doing your best to consistently execute your entire trading process (market analysis, strategy & risk management practices , review and adjustment processes, etc.)? What trading psychology issues prevented you from realizing your goals? Give yourself a pat on the back if none of the 5 common newbie mistakes made it to on your list.

2. Identify the factors that influenced your trades.

Once you have identified the factors that you can improve on, identify the ones that influenced your trades but weren’t in your control. Look back on the economic themes that popped up in the first half of the year and how the market interpreted them.
How long do you think did each of these themes drive price action? Do you think they’ll still matter in H2 2016? Did volatility increase or decrease, and what’s expected of volatility for H2? Ask questions like these and more to figure out how you need to adapt going forward.

3. Make realistic adjustments for the second half of the year.

Based on what you learned about yourself from your trading journal and what you know about how the market priced in this year’s economic themes, you can now make adjustments to your trading goals, strategies, and risk/trade management practices for the rest of the year.
Ask yourself if you need tweak your existing goals and your trade management techniques. Do you need to look at different statistics this time? How about a different strategy altogether if market behavior has changed? If you’re thinking of changing your trading system, make sure that it has a good chance of working well in the different economic scenarios that could pop up in the coming months.
Keeping trading resolutions is always challenging after January. But remember that you made them for a reason. With a little reminder and a few adjustments, you’ll get right back on track to the goal of becoming a consistently profitable currency trader or investor.

Read more:

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Monday, 27 June 2016

Britain's Exit from the EU

Britain in the EU

The European Community was established in 1967 stemming from the Treaty of Rome that was signed by 6 European states in 1957. Subsequent to the forming of the European community Britain joined in 1973. In 1975 Labour Minister Harold Wilson had a referendum on whether Britain should stay in the European community. That was the last national referendum and had 66.8% voting Yes to stay in the Community.

With the recent vote to exit the European Union 43 years has passed with the Brits as part of the EU. Now that they have exited what will take place going forward. Will other countries have referendum and leave as well? Will the Pound (GBP) suffer? Will the commodities market plunge? so many things will be affected by the Brits exit.

Who voted to leave?

From the Poll shown above it shows that the older persons (above age 50) have decided the future of the youths. The voting break down is very clearly shown and begs the question, why does the older folks who are on their way out is deciding such a future for the younger generation and others to come?
It seems as if these older voters have gotten tired of Britain being in the EU and thought it was best for them to leave the community. The after effects of this exit will have a huge effect on things going forward since Britain has been a part of the EU for so long.

Effects on GBP

In the hours following the results of the vote saying Britain will exit the EU the British Pound fell against all competing currencies. It was almost an instant nose dive for the GBP. Anyone that had a trade open in favour of the GBP would lose severely while traders who had trades against it would be smiling all the way to the bank.
It is  normally recommended that you close trades when such huge events are to take place since it isn't normally guaranteed which direction they will go and how it will affect the market. Some Traders took the risk and won while others to the risk and lost a fortune. In the previous blog post it was discussed how some brokers prepared for the Brexit vote adjusting margins, spreads and leverage. This help the brokers but can hurt the traders if they didn't prepare for it.

Effects on other currencies and Commodities 

The Exit of the Brits from the EU have already negatively affected the currencies in the EU by creating an uncertain of trade relations and the one border that the EU stands for.
The exit also affected numerous other currencies either in a negative windfall or a positive growth. For instance the Aussie was affected due to trade reasons with Britain and also because the Brexit affected oil prices as well. The greenback smiled against the pound in trading in light of Britain's exit. The BOJ governor have taken measure to ensure the Yen (JPY) doesn't climb too much as it would affect import cost and as such the stock market.
Before you trade a currency research the effects and implications of the Brexit and use it to enhance the probability of your trade being good.

Future Implications

There's a lot of implications of the Brexit on global economy, commodities, trade relations and even sporting contracts. Laws will be changed which will impact immigration, visitor travels and existing court cases.
All markets whether stock or Forex will need to reorganize and ensure that the future uncertainty of Britain doesn't affect them too bad. Forex brokers will have to keep a track of their margins and leverage while the traders will need to pay keen attention to their risk management strategies.
Companies will need to keep focus of their expenditure in loom of reduced value of the pound. This could affect raw materials, export quantity as well as other operation expenditures. All stock markets took a blow with the Brexit.
From a traders perspective I would recommend holding off on any trades that is not above 80% probability of winning and this recommendation is only if you definitely want to trade. Otherwise I recommend just watching the market for another couple weeks to see if fundamentals balances out the currencies.

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Sunday, 19 June 2016

The Brexit and its effects

Forex traders ain’t the only ones prepping their game plan for the EU referendum… Brokers are gearing up to make some adjustments for the Brexit vote, too! In case you’re scratching your head wondering what in the world all this is about, make sure you read our Brexit primer first.
As you’ve probably guessed, this highly-anticipated event is bound to bring an unprecedented amount of heart-stopping volatility to the mix. Heck, even Brexit opinion polls from various groups have been enough to push pound pairs to spike this way and that!
Now brokers have probably learned their lesson from last year’s SNB shocker to remember that fast and furious market moves could potentially trigger margin calls and wipe clients’ accounts out in an instant. A number of brokers were even forced to close shop then! Apart from that, majority of market participants might make several adjustments to their trades or close their pound positions, enough to push the market in a particular direction ahead of the vote.
Because of that, a number of firms have already ironed out their plans to manage their exposure to this event risk, not just for pound and euro pairs but also for other U.K. securities. Thanks to the intel shared by a few of my honorary ninja traders, here’s an updated list of adjustments being made by forex brokers ahead of the Brexit vote.
AlpariAdjustments in margin requirements for Standard, ECN, PAMM Standard, and Pro accounts by June 20
ActivTradeIncreasing margin requirements by four times for GBPUSD, GBPCHF, GBPAUD, GBPCAD, GBPJPY, GBPNZD, EURGBP, and UK100 index by June 19, and two times for several euro pairs and European indices
ADS Securities: Increased margin requirements on GBP pairs to 5%, EUR pairs to 2% and the UK100 index to 2%
FXPrimusIncreased margin for all GBP pairs and for Brent crude oil from June 19 to June 24
FXCC: 200% increase in margin requirements for all GBP pairs and 100% for EUR pairs as of June 13, 200% increase in margin requirements for EUR pairs and 100% for all remaining instruments by June 20. Margin call level raised to 150% and stop out level adjusted to 100%
Admiral Markets: Five-fold increase in margin requirements for GBP pairs and FTSE100 CFD. It will also disable internal fund transfers to and from GBP accounts via back office by June 23 and introduce close-only restrictions on trading exotic GBP crosses
Vantage FXTwo-stage adjustment to trading conditions for EUR and GBP pairs, USD/NOK, USD/SEK, DAX30, FTSE100, DJ30, SP500, and XAU/USD as of June 13 and also on June 20 Increase from 0.5% to 3% in minimum margin requirements for GBP pairs and UK indices by June 19. Increase from 0.5% to 1% in minimum margin requirements for EUR pairs, European indices, and US indices by June 19
IronFX: Increase in margin requirements for GBP crosses, FTSE100, spot metals, and UK shares by June 17 and possibly another round of adjustments by June 22
AxiTrader: Lower maximum leverage available for all products starting June 20 until market close on June 28
AFX Group: 100% increase in margin requirements for GBP pairs and FTSE100 index as of June 10, with potential adjustments upon appropriate notice
RoboForex: Close-only mode for GBP instruments from June 20 to 24, six-fold increase in margin requirements for GBP instruments for MT4 and MT5 ECN accounts and a twenty-fold increase in margin requirements for MT4 and MT5 Standard and Cent accounts
LiteForex: Increased margin requirements for GBP pairs, EUR pairs, commodities, and major indices. Five-fold margin increase for ECN, NDD, and PAMM accounts, a ten-fold margin increase for CLASSIC accounts, and twenty-fold increase for CENT accounts. Suspension of opening of new trades in a number of related currency pairs from June 20 to June 27
Tier1FX: Adjusted margin requirements for GBP pairs and UK100 index as of June 6, another round of adjustments by June 20 until further notice
Capital Index: Two-stage hike in margin requirements by June 17 and June 22 for GBP and EUR pairs, as well as European indices
FXTF: Changes to trading conditions for GBP-related currency pairs regarding bid-ask spreads
Orbex: Margin requirements for GBP and EUR pairs increased to 4% and margin for all other instruments at 1% as of June 16. Margin stop out level adjusted to 50% by June 20
FXCM: Adjustments for margin requirements for EUR and GBP pairs beginning on June 10, with additional increases by June 17
Saxo Bank: Revised starting margin levels for currency pairs with GBP, EUR, CHF, and JPY, as well as higher margin rates for U.K. Index CFDs that are GBP-denominated
IG Group: Increasing margin rates for all GBP pairs by June 10, with additional measures to be put in place by June 17 and June 22
OANDA: Lower maximum leverage on GBP pairs to 20:1 after the market close on June 17
CMC Markets: Margin changes for GBP pairs and several European indices to take effect by June 13
TradersWay: Increasing margin requirements on GBP pairs by four times as much (i.e. leverage on these pairs will be four times lower) by June 13
And the roses among the thorns…
easyMarketsIt will continue to offer 200:1 leverage, free guaranteed stop loss, no slippage, negative balance protection, and fixed spreads on GBP pairs
Trade360: No changes in margin requirements or leverage available, no limits on trading GBP pairs as well
Whether this plays out to their advantage or turns out to be a painful lesson in risk exposure remains to be seen, but it turns out that some exchanges would also rather be safe than sorry.
Moscow Exchange: Increasing margin requirements for EURUSD and GBPUSD FX futures contracts on June 20 and 21, with these changes up for review after the referendum results are announced

Courtesy of Espipionage from