Tag: Risk Management

4 must read gold trading tips

No matter what is the behavior shown by the market, whether it is bullish or bearish, in gold there is always high chances to get huge profits due to the high liquidity profitable trades in all possible directions due to the unique position it holds in the world’s economic and political systems. While many fellow traders choose to own the metal outright, speculating through the futures, equity and options markets offer unbelievable leverage with measured risk.Market players often fail to take full advantage of gold price fluctuations as they haven’t learned the exceptional characteristics of world gold markets or the hidden pitfalls that can rob decent profits. Additionally, not all the investment vehicle are built equally: some of the gold instruments are more likely to produce consistent drifted results than others. It’s not hard to learn how to trade this yellow metal, but the activity requires a unique skills set.The beginners should stride lightly, but the seasoned investors will benefit by integrating these four strategic steps into their daily trading routines: 

 1. What Moves Gold 

Almost all the traders have an opinion about this metal every time, but gold itself reacts only to a restricted number of price reactants. each of these forces fractionalize themselves  in a polarity that affects sentimental, volume and trend intensity.Inflation and deflation-Market players face uplifted risk when they trade gold in reaction to one of these polarities, when in fact it’s different one controlling price action. Combinations of these forces always play a vital role in world markets, establishing long-term themes that track equally long up trends and downtrends.Greed and fearSupply and demand
2. Understand the CrowdGold

attracts numerous crowds with diverse and often opposing interests. Gold bugs enhance vast liquidity while keeping a floor under futures and stocks as they offer a continuous supply of buying interest at lower prices.Additional to this gold attracts enormous hedging activity by investors who buy and sell in combination with currencies and bonds using different strategies.3.Read the Long-Term ChartGold Monthly ChartGive yourself some time to read and learn the gold chart from the very single detailing to the big market move inside out, starting with the long term story, as the trends in charts carved out to be persistent for some decades and the metal has also drizzled lower for interminable periods, refusing profits to gold bugs.

3.Read the Long-Term Chart

Gold Monthly ChartGive yourself some time to read and learn the gold chart from the very single detailing to the big market move inside out, starting with the long term story, as the trends in charts carved out to be persistent for some decades and the metal has also drizzled lower for interminable periods, refusing profits to gold bugs.3.Read the Long-Term Chart
4. Choose Your Venue

Liquidity monitors gold trends, increasing when it is moving sharply higher or lower and decreasing during relatively quiet period.This fluctuation impacts the future markets to a greater degree than it does equity, due to much lower average participation rates. *Trade the gold market profitably in four steps. First, learn how three polarities impact the majority of gold buying and selling decisions. Second, familiarize yourself with the diverse crowds that focus on gold trading, hedging, and ownership. Third, take time to analyze the long and short-term gold charts, with an eye on key price levels that may come into play*Finally, choose your venue for risk-taking, focused on high liquidity and easy trade execution.

Combining Fundamental or Technical analysis for better results

Traders in the beginning usually wonder what should be their first step / Which strategy to choose or what to pay attention to; while entering any global financial markets? One of the first most important thing traders learn is that there are two distinct types of analysis – Technical and Fundamental. Combining both of the fundamental and technical analysis, one might know and understand the market better and predict the future direction of the price movement with higher accuracy.

In order to comprehend the combination of these two analyses, one should first need to understand both the analysis clearly along with their distinct features.

Technical analysis


Technical analysis is constructed around price chart analysis. Technical analysts use past price performance to draw certain assumptions and estimate existing market conditions. By using support and resistance levels along with technical indicators, traders can determine finest entry and exit points (when it is possible to enter and exit deal). This type of analysis can give a plethora of useful information and help predict the direction of a future trend. However, it can hardly tell what price will be in the long run, as the price chart cannot offer extensive information on the future performance of an asset.

Fundamental analysis

Fundamental analysis, on the other side, is revolved around the study of real-life phenomena which can affect the price of the asset. The direction of the latter will depend upon the information provided in the said release. The good news (outstanding financial performance, new cost-cutting initiative, higher than anticipated growth prospects) optimistically affects fundamentals. The bad news (poor financial performance, bad press coverage) pessimistically disturbs intrinsic value and drag the market price down, as well. The same principals are applied to currencies, commodities, ETFs and all the exchange-traded assets.

Combination F&T


Combining Fundamental and technical analysis is not an easy task, yet it can be useful in a number of ways. Keeping track of the recent trading volume and monitoring the activity is one of the wisest decisions. A trader can use volume indicators to check the power of a dominant trend, as a rule, trading volume accelerates when a trend gains momentum. When trading volumes decline, it can be a sign of an upcoming trend reversal. Market behavior is determined by the actions of specific traders.

The experts of Traders Factory (which is the best signals provider company) generally depict when to enter, exit or put a stop loss for a currency pair.

The best way to learn Forex

The time is moving rapidly and technology is changing the way we live. Only 10-12 years back people hardly knew any other way to earn money except having a profession and work from morning till evening. But, the internet has changed the world and making money online has become a popular source of income.
Now, lots of people are achieving their financial freedom through Forex trading online. If the traders have been looking for a way to get out of the rat race, trading can increase their earnings or simply build a solid nest egg for their retirement.
Trader or forex advisor, what would you choose? Can a beginner make enough money from Forex trading?
Whatever your expectations are, Forex trading may be the best opportunity for you to achieve them.
Almost all the people around the world have the dream of living a luxurious life and Forex trading can be the best opportunity to make the dreams come true. So, stop delaying and start living your dream life.

If you have ever thought of giving forex trading a chance after scrolling through various forex trading money making strategies online, then you must be wondering about learning the best way to start trading forex

It’s crucial to have an understanding and knowledge about the markets and methods for forex trading so that you can more effectively manage your risk, make winning trades, and set yourself up for success in your new venture.

Get educated first;

To make effective trades and get consistent returns, it’s crucial to get a forex education. Traders have to spend some time reading up on how Forex Trading works, what is money management strategy, what are the most profitable Forex currency pairs, what is risk management strategy, what are the Forex trading rules, etc.. This way, you will be more and more smarter over the time, as nothing beats knowledge and experience.

Use a Micro Forex Account

The breakdown of learning Forex trading with a demo account is, you don’t get to experience that what it feels when your hard-earned money is at risk.
Hence, it is generally suggested to beginners to have a micro Forex trading account or an account with a variable-trade-size broker that will allow you to enter small trades.
Trading small will allow you to put just some capital on stake, but expose yourself to lesser losses in case if you make mistakes and enter into losing trades.
This will teach you more than that is written on a book, or a website or any other forex trading forum and gives you an entirely new perspective on a demo account

Learn About the Currencies You Trade

To start trading, you first need to understand what you are really trading. Usually, new traders tend to start trading without knowing the market moves and use high leverage and trade randomly which leads to losing their money.

Trades Factory stays up-to-date with new strategies, market updates, and methodologies that enable traders to make the most of the Forex market.

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Money management Strategy

Getting the right direction while trading forex is only one side of a coin, money management is the other side. Even the great trades and the most profitable trading strategies won’t work well if traders don’t have a good money management rules in place to protect their winning trades, cut their losses, and grow their trading account.

Hence, here, the article has covered some of the things which no one can tell the traders about Forex trading and money management that they need to know now!

What is money management?

Money management in Forex simply defines a set of rules that maximize traders profit and reduces losses and grow traders’ trading account. It generally happens with the beginner traders who tend to neglect even the basic money management rules and end up losing their entire money.
Analyzing the market and deciding whether to go long or short will be difficult for beginners. This is the reason thinking about money management and risk is fully boring at first.
Well, without a proper strategy and money management, traders cannot become a profitable trader.

Let’s have a look at what Money management strategy can do;

• Money management Helps in avoiding substantial losses,
• Increases the volume of opportunities to invest,
• And Exterminates emotional trading

Frankly speaking, the strategy is simply a way of analyzing how much fund traders can afford to invest without any issues, which is an extremely significant factor to understand while trading. By taking some time to evaluate this, they will find it easy to improve their emotions.
If traders are trading with money that they cannot afford to lose, they may find it problematic to have a successful trade which can lead them to take an illogical decision and further financial decline. Hence, the traders are suggested to be vigilant.

The traders may need to change their trading viewpoint from trading indecently to trading cautiously. Well, it simply means that, they need to think once how they have earned their money, how long they spent and how hard they had to work to earn such amount. Of course, all the traders out there want to protect their hard-earned money right?

The best Forex money management system needs to be a well-versed and comprehensive system that utilizes most.

Trades factory helps all the beginners and experienced traders to trade smartly and set up the money management strategy well. The company is well-known as the best Forex advisory company among all the companies that provide services related to Forex.

4 Essential Tips to Apply on Day Trading

Day trading is an act of buying and selling the financial instruments or securities even multiple times within a single day. Doing it correctly, anyone can improve their trading skills. But it may consist lots of risks for newbies or anyone who doesn’t follow a well-thought-out strategy. Almost all the traders perform day trading but it’s not suitable for all of them.
Let’s see some of the tips to make your Day trading better:


1) Understand the market thoroughly
The traders can’t apply this tip to general trading procedures (although it is essential to know and understand them) but rather to major events that takes place daily. Every trader already know that important news and announcements have the potential to move the market. Remember that even when trading in shorter time intervals, fundamental factors can still affect the outcome of your deals


2) Allocate funds
No matter how much money you allocate to each and every trade, it should be thoroughly calculated. You should never invest a fix amount neither the whole of your investment. Rather you should make a strategy of investing 3% to 4% of your total balance. It should never exceed. You should keep yourself safe from a losing streak.


3) Set aside time
Day trading needs a scheduled time as it is a time-demanding pursuit. In fact, most of the successful day traders spend their whole day doing trade as a job holder spends his whole day working in office. Day traders do not have business hours and usually spend time monitoring the markets as much time as they can. Day trading is never an easy money, it needs time, effort and passion.


4) Time your trades
It is essential to see the right time to pick the right moment to open your deals. The experienced traders always enter the market when the volatility is high. Since Forex is traded 24*7 globally, with New York, London, Singapore and Tokyo being the most notorious exchanges, the highest volatility will be observed when there is more than one exchange is open. Certain specialist, however suggest novice traders to trade when the market is less volatile, to manage their risk properly.
Anyways, it is up to you to find a suitable entry and exit moment, trading style and develop your trading strategies accordingly.

4 must to do things traders should follow while trading

Trading can be seen as a sea of opportunity waiting to be explored. Nevertheless, traders who are not adequately ready to board on this adventure may find sinking instead of swimming. Just as the ship captain needs a map to navigate their ship’s path, traders need some strategies

and plan to lead them through their trades. We as a human don’t have any idea what is next? We don’t know whether there is any life going to exist or not? But, the human being has the capability to face the improbability of the future with curiosity and positivity. There is hope, the hope of living, hope of having a happy life and we make plans for our future and work on that to have one.
Similarly, traders cannot predict their next trade but still, the next step should be planned and strategized. The experienced traders already know that having a trading plan is essential for long term success.
What about you? Are you not aware of what is a trading plan entails? Let’s have look at some key points which are included in a trading plan to get started;


Goals
Take a moment to analyze your both short term and long-term goals before starting your trading day. Ask yourself which one you are about to achieve, and which one may need a bit of change. Are your profits realistic? Have you evaluated risk or reward ratios?
A trader’s success depends upon his goals, so it’s essential to reserve some time to think about your trades carefully.


Instruments to trade
Trading instruments generally refer to the different types of markets you can trade. Sometimes, it is called securities, they vary from commodity futures to stocks and CFDs, to currencies and metals and many more. So, choose the instrument you want to trade after studying the market.


Trading times
Time can be critical depending upon the instrument you intend to trade. For example, forex traders might want to isolate the times when the market is most active. When the market is highly active it usually translates into volatility, which increases upside potential.
Trading generally also depends upon mood. If you feel refreshed and energized in the morning it could the best session, if not, you can try the afternoon or evening sessions.


Entry/Exit rules
This is the place where your trading strategies and plans come into play. Make sure the strategy that you want to employ is compatible with the instrument you have chosen to trade. Plan the entry signals you will look for, and form potential exits. It may be brilliant to use the two exit rules: the first should be your stop loss (LS), and second should be your take profit (TP). The creation of these signals prevents you from being a victim to the emotional trading.

Why do traders keep losing money in Forex Trading?

To be honest, getting consistent returns as a trader is not easy. Around 90% of people who have entered the financial markets lose money and leave empty-handed. There are lots of reasons for losing money. For example, some people are not that serious about their trades, and they just do it like playing a game, others take it as entertainment and not as hard work, the rest feel lazy to gain knowledge and acquire new skills.

So, why do you keep losing money? Your answers are below;

Being ‘too smart’

Being too smart is hardly the reason that makes you keep losing money. Nevertheless, it is the brilliant investors who are more successful in the financial markets. If you think you are too smart, on the contrary, it could get unpleasant.

Now, what do most ‘smart traders’ do? The smart traders believe that they can defeat the market, which is not easy and happens pretty rarely. They believe that it depends upon luck and not the skill. Most of the traders enter the deal at the least suitable time and end up with a position that is intended to lose.

Very less people out there can brag the ability to be smart with the market. One stay humble, trade with the trend and don’t act over smart while going against the market rather you should embrace it. You should rather embrace it instead of beating and going against it.

Being emotional

Trading cant’ be considered as your life. Here one needs avoid both positive and negative emotions as they can hamper trading progress. Try to stay relaxed and patient. It will help you in your next trading.

No risk management

One can bet his entire investment on a single trade and may even earn some profits. But, after a few more trades, he will eventually end up having massive losses. Unlike those traders who follow proper risk and money management & as a result lose just few shares of their investment, you can lose the entire capital at the moment. No more funds equals to no more trading.

Conventional investors suggests that one should risk just 2% of his trading equity on a single trade. Go for 4-6% if you really feel lucky, but under no conditions assign 100% of your funds to even “the deal that will make you win for sure”.

Controlling your emotions place a big role while trading, as said by warren buffett -“If you cannot control your emotions you cannot control your money”.

Trades Factory helps empower you with high tech trading tools and learning by industry leaders. Traders Factory is the hub of all your financial trading solutions. Watch, learn and get 70-80% consistent profit.

What Currencies are traded in Forex?

Forex Trading- Forex simply means foreign exchange trading. It is all about buying and selling currencies in pairs. You need to have information about the currency in the pair that how much worth ful are they to each other. A currency pair quotes two currency contractions, followed by the values of the base currency which is based on the currency counter.
An international code is always there that specifies the setup of currency pairs. For an example, a quote of EURUSD 1.23 means that one EURO is worth $1.23. In this pair, the base currency is Euro (EUR) and the counter currency is the US dollar, Hence, every currency pair is listed in most currency markets worldwide.
Tell me a market that never closes during the working week which has the largest volume of the world’s biggest business and with people from all countries of the world participating every day?
Yes, the Forex Market. It is the global premier financial market, which mirrors the financial dynamics of the world trade pretty clearly.
When you start trading Forex online, you may find yourself stunned and confused by the absolute number of currency pairs.

With over than 200 countries in the world, you can find handful of currency pairs to indulge with trading, though, these currency pairs may not have the potential to deliver the great results to traders.

So, what are the currency pairs
Before examining about the best currency pairs, it is good to enhance our knowledge on the most popular currencies that can be found
• US Dollar (USD)
• Euro (EUR)
• Australian Dollar (AUD)
• Swiss Franc (CHF)
• Canadian Dollar (CAD)
• Japanese Yen (JPY)
• British Pound (GBP)

Although, there are lots of traders who trade in exotic currencies such as the baht or the Czech koruna, the majority of dealers trade the seven most liquid currency pairs across the world.

Let’s have a look at the major currency pairs
• USD/JPY (dollar/Japanese yen)
• GBP/USD (British pound/dollar)
• USD/CHF (dollar/Swiss franc)
• EUR/USD (euro/dollar)
• EUR/USD (euro/dollar)
• AUD/USD (Australian dollar/dollar)
• USD/CAD (dollar/Canadian dollar)
• NZD/USD (New Zealand dollar/dollar)
Now, the question is, what is the best currency pair to trade?
The answer is not easy, you cannot get the straight answer as it varies from trader to trader. Take some time and analyze different currency pairs which is best suits your strategy in the best possible way, it may depend on Forex session you take and may vary accordingly.
So, decide wisely which currency pair you should trade in Forex Market.

What is the difference between Forex and CryptoCurrency?

There are many factors that make cryptocurrency different from forex, although exceptional aspects of both markets attract the traders similarly. Talking about the forex market as we all know it is the biggest financial market where almost every currency is traded by a huge voluminous amount of liquidity, which makes it very prone to the economical events of different countries such as political announcements, inflation numbers, and jobs reports. Being a global market, it is influenced by a number of features such as political announcements, inflation numbers, and jobs reports. On average, around $6 trillion is traded in the Forex per day.
The Cryptocurrency which is often referred to as ‘digital currencies’ and is not the same as the currencies like US Dollar, Canadian dollar or Japanese yen.
Whereas, currencies in the Forex are backed by the centralized Government but crypto is not. They are programmed online and reversed by a peer-to-peer verification that stops you from using a cryptocurrency (like Bitcoin) most of the time.
Features of Forex and CryptoCurrency:

  1. CryptoCurrency
    (a)Finite supply available
  • Demand gets increased when there is a limited supply. From the time when there is a limit on how many cryptocurrencies can be generated, the value often accelerates, As an example Bitcoin.
    (b)Quick and permanent transactions
  • Cryptocurrencies have low transaction costs as a central bank and other third-party vendors don’t take a transaction fee.
    (c)Available to anyone.
  • Cryptocurrency market is a platform that gives different levels of investment opportunities to both of the parties world-wide. This procedure allows individuals use and trade cryptocurrencies even in under Developed countries without nearby banking institutions.
  1. Forex Trading
  2. Unlimited supply.
    As The Forex market comprises of the world’s global financial markets, there is an unlimited supply of currencies that are available to trade.
    (a)Leverage.
  • Usually, the ratio of leverage provided in the Forex market is 100:1, meaning you can take a Forex trading position worth $100 for only $1. Though this also means losses can rise rapidly.
    (b)Very high liquidity.
    The number of participants are much more than any other market, hence, it is quick and simple to trade. In other markets, even a single investor can massively influence the market such as the stock market but it does not happen with Forex.
    (c) Influenced by global news, announcements, earnings reports, etc.
    Forex market is influenced by global news, announcements, earnings, reports etc which can make it easier to find trading opportunities.
    There is high volatility in both the Forex market and cryptocurrency. However, the more risk you take the more reward.
  • Bottom line
    Trading whether in Forex or in Crypto both involves a high level of management. It needs effective equity planning, the right strategy, proper risk management, perseverance and a strong desire to continuously learn.
    Trades Factory provides a platform with learning plus earning opportunities. Trades Factory prefers in following the correct strategies and provides the same to their students too.

What are the differences between Forex and commodity trading?

Generally, commodity market (also known as Comex) trades in goods such as, gold, silver, crude oil, coffee, cocoa and all the mined products. In global market, Forex is also shortened as FX which trades in currencies such as dollars, Euros, yen etc. Many of the analysis and approaches of both the markets can be stated as identical to one another. Whether you trade in Forex or commodity, you should feel yourself comfortable. Nothing in the world can be achieved without interest, hard work and passion.

The market which you prefer has a lot to do with your comfort level with the following factors:

Personal Choice

A number of people feel comfortable and relaxed with certain types of markets. Because, the commodity trading is physical market they can relate and communicate to, people feel easy and like to trade in this market.
As sugarcane and wheat can be seen in everyday life, many of the traders prefer commodities because they can connect to these things.

Differences in Regulation

The foreign exchange market is a slightly unregulated spot market and with such big volume it’s volatile like anything. On other hand commodity market are very regulated.

Leverage in Forex and Currency Market

There is a major amount of leverage in Foreign Exchange market and people don’t have to go through a complicated procedure to have it. All you need to do is fund a small amount or a few hundred dollars of account and you can have thousands of dollars in the end.
The commodity market also has an option of leverage but the leverage in forex trading is amazing.

Exchange Limits

While Forex is traded over-the-counters and with the help of brokers or in the interbank market, commodity trading can be done on exchange.
Commodity market has daily collection limits by trading on an exchange and these limits are called limit up or limit down and you cannot place a trade when these limits go beyond.

Compromise

If you are a trader and looking for an option you can probably trade commodity based currencies.
The commodity based currencies include Australian dollar, Canadian dollar, New Zealand Dollar, Russian Ruble, Colombian Peso and Peruvian Sol. As per history, the Australian dollar has an optimistic connection to the price of spot Gold (even if the strength of the connection varies eventually), the new Zealand economy correlate with the whole milk powder prices and the Canadian dollar has a positive connection with the price of crude oil.