"We're not going to play a winning hand every day."
- John Paulson
This statement is just as true in regards to the Forex markets as it is for investing in general. While there is indeed no certainty in terms of wins or losses, there are still powerful strategies to make certain that financial freedom soon becomes a reality. What blueprints exist that can help any trader gain a competitive edge?
Once again referencing the previously mentioned quote, it is essential that an investor appreciates the risks involved with the liquid Forex market. The point here is to minimise this risk as much as possible as opposed to eliminate it entirely. Thus, several principles come to mind. These can be listed as:
- Never invest capital that you cannot afford to lose.
- Always use stop-loss orders to mitigate losses.
- Never let greed supersede logic.
- Embrace diversification as opposed to a single position.
Still, there are several other approaches which can help to provide stable profit margins.
Appreciating a Leveraged Trade
Leveraging has received an unfair amount of bad press in recent times. This reputation generally stemmed from its incorrect application within inappropriate scenarios. Any leverage has the power to dramatically increase one's profits should a predicted movement occur. Of course, losses can just as easily accrue within a short period of time. The key here is to appreciate the risks involved and only open a leveraged position when the outcome of a position is virtually certain. Instinctual trading and other "gut" moves could very well result in a crippling loss.
Performance and Platforms
Any success within the Forex markets has a great deal to do with the electronic trading platform that is chosen. No longer are these systems in their infancy. Rather, they are highly refined and the most reliable can execute trades within a fraction of a second. A substantial amount of thought needs to be devoted to making the most informed choices possible. CMC Markets is one of the leaders within the realm of electronic trading, and for good reason. Access to live news feeds, countless underlying assets, next-generation levels of flexibility and a compatibility with mobile devices are but a handful of the advantages offered. Any trader with experience will rightfully observe that only the most efficient and user-friendly platforms should be employed.
Standing on the Shoulder of Giants
Pride cometh before a fall. This concept is just as relevant when trading currency pairs. There is always information to be gleaned from the best in the business, So, make sure to utilise news feeds, chat rooms and the wealth of information available throughout the Internet. Financial freedom and knowledge have always enjoyed a hand-in-hand relationship.
To keep abreast of late-breaking news as well as to enjoy access to the most sophisticated trading platforms in the world today, it is wise to check back with CMC Markets at regular intervals.