Forex trading methodology dubai uae
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In the present times where technology plays a crucial part anyone can set up a forex trade in any part of the world at any time. All successful investors cultivate a strategy that works for them according to their unique personality, trading style or requirements often through trial and error. Some rely on technical indicators, or fundamental and technical analysis tools to enter or exit their trading positions.
But there is no one good or bad trading approach. One just needs to find out the trading plan that suits them. One also needs to be very careful while choosing the brokerage firm to trade. One should learn to distinguish the bucket shops from the reliable ones. You as an investor should opt for a broker that is registered under a regulatory authority, offers tight spreads, good leverage and extensive tools and indicators to better your trading experience.
Always start off with a free practice account that all good brokerage houses offer. In that way you can build your trading confidence and perfect your skills before jumping into the actual trading scene.
In the forex market following the market trend is in your best interest and gives you a higher chance of making profits. If you happen to ignore the trend you must have a valid reason for going against it. Two very important terms in forex trading are leverage and margin.
Margin can be understood as a security or collateral lent by your broker that allows you to leverage the funds and securities in your account so that you are able to enter larger trades. Leverage is the increased buying power that is available to margin account holders. Corresponding to margin trading the term leverage gives you the ability to enter larger positions by paying a fraction of the total cost of a trade than would be possible with your account funds alone.
Leverage is expressed as a ratio. However margin trading is not for the risk-averse as it can be highly risky and lead to high losses as well as gains. It is the amount of collateral your broker requires from you to set up a trade. It is expressed in percentages. The amount of collateral that your broker has set aside to let you trade in your current positions.
While this money is still yours, you can't use it until your broker gives it back to you either when you end your current positions or when you receive a margin call. You get this when the amount of collateral in your account is not sufficient to cover your possible loss. It happens when your capital falls below your used margin. If a margin call occurs, some or all open positions will be liquidated by the broker at the market price.
Transparent execution sans any fees: Majority of brokerage houses do not levy any fees for entering or exiting trades. Rather the broker earns revenue by making the investor pay for the spread i.