Economics and Currency Trading
In the mid part of the year 2007 I was involved in a serious accident. Fifty percent of my body was burned in an explosion. To make a long story short; when, in the emergency room, my mother asked me how I was feeling; I answered: "Well… If I die, please make sure they don't charge you full price for the cremation."
This is a true story. If you need proof send me a mail, and I´ll send back pictures of my scars.
The reason I am telling you this is because I want you to understand how the mind of an economist works. We are always looking for ways to optimize; to do the most with the resources that we have. We don't waste anything.
Economics is the science of election (Although it is an empirical science; we do use the scientific method).That means that, because, the resources you have, no matter how big, are limited you need to make the best possible decisions when using them. When you take a decision you are leaving other options out. That other option is called opportunity cost and we need to be aware of it.
What does this have to do with The Forex Market?
Everything!!!
When you decide to enter a position in the market, because you expect to profit, you can't take other positions with that same capital. Hopefully the decision you took was the best one, and was the one with the most profit potential.
When your trade goes south and you incurred in a loss you should deal with it in a mature way. If you keep a trade open longer that it should; you will have to measure not only the money you are losing, but the dollars you could have made with the capital you just lost.
If you learn to think about your capital not only in terms of profit but in terms of potential profit you will make better calculations when the time to invest it comes.
You need a good system based in mechanical calculations to be able to allocate your capital in the best possible way and increase the potential profit of every trade.
Questions and Answers
Article Tags:
forex
,market
,trading
,trader
,investor
,currency
,euro
,asian
,risk
,dollars
,account
,banks
,central
,positions
,advantages
,broker
,sessions
There is a lot of resemblance between boxing and trading the forex market. When a boxer sets foot in a ring, even the undefeated champion, he can't expect to go through the boxing session without receiving a couple of punches back. You should realize that experiencing small losses, while trading in the forex market, is just part of the deal.
Here is the second part, as promised, of the principles I think you need to develop a good mindset as a Forex Trader.
Believe it or not there are many things in your Forex trading career that are as important as having a good system. For me having the right mindset is the top virtue a Forex trader can aspire to acquire.
First of all I want to make it clear that when I am talking about fundamentalists I am not referring to Bin Laden and company. And the technicians I am referring to would not be able to fix your computer or your TV.
What could possibly be the relation between Freemasons and the Forex Market? Am I pushing it too much? Well… judge for yourself:
Some people are interested in learning to trade the Forex Market as a complement to their income. And there is the other group; who want to quit their job and make the Forex Market their principal source of support.
The Forex currency market is a non-centralized exchange where banks, businesses, governments, investors and traders can trade currencies with one another. By "non-centralized" I mean there is no actual physical centralized exchange like the New York Stock Exchange or the Chicago Mercantile Exchange. Instead...
Forex quotes show the price of one currency evaluated in the price of the other one. The other name of the Forex quote is a currency rate at Forex market. It should also be noted that the quote is the measure for the value of other assets, such as goods and securities – bonds and stocks. Demand and supply make a strong impact on quotes formation.
The fully automated service sends an email confirmation in receipt of the amount and then processes the order. Among the reputed agencies to order foreign currency from is Pawnbroker.
Created by David Lambert, the CCI was first used as an indicator for determining reversal points in the Commodities Markets. It was then discovered to be very useful in the share and forex markets. It is based on the theory that all activities move under the influence of cycles. The Maxima (+100) and the Minima (-100) occurring at regular intervals. The CCI measures the speed of price fluxuations as determined by oscillators.
Credit card services are important to help your business increase sales. Consumers today are more comfortable than ever to pay in means other than cash. Plus, many customers don't keep a high volume of cash on hand. Credit cards allow people to pay back expenses over time.
Your parents told you, when you were just a kid, that hard work was the road to success. But why is this world filled with people that get so much with the minimum effort? Is there a better way?
Demo trading is a huge advantage when you are just starting. One thing you may not know, and won't even believe, is that you can make real money on a demo account. The first real account I had; was funded with money I made on a demo account.
What do you think, or feel, when you hear the word speculator? If the media succeeded you may think of them as the bad guys. The ones we need to blame for all the evil in the world. I want you to analyze some ideas first; before you rush into harsh conclusions.
Can you trust your forex broker? Many dealers are not honest and do not provide a good service to their clients. Sometimes a forex trading company, even those with a high reputation, rip off their clients. Do you know if yours is trading against you?
This days learning to trade should not be a difficult task to accomplish. I offer you some guidelines of what to look for in a good system. Anyone with the right education can make a good living out of the Forex Market.
Discuss this Article
