This article is written by Milton Griffin : inserire la propria strategia su zulutrade
Hello forex traders,
Many forex traders trade blindly–as I used to do-and make a lot of mistakes in their trading. One of the most terrible things that can happen to a novice trader is margin call. Margin call has been known to destroy a lot of business dreams. however, before we discuss this mistakes, what is margin call?
Margin is the amount of money required to trade a certain lot size. It is a minimum deposit and depends on leverage ratio. Novice traders generally search for high leverage like 250-1and 400-1. this means they would need a smaller margin to trade high amounts. Ordinarily, this should be a good thing but it isn't. It works like a sledge hammer. lets take an example.
A forex investor puts $500 into his forex account and trades with a 250-1 leverage. what this means is that to trade a standard lot($100,000), he would need to deposit just $400. A pip gain would result in a $100 gain which is amazing for such a small investment.
This leads us to margin call. Margin call occurs when your broker notifies you that your margin can not cover your current losses. what this means is that you lose the deposit. In the example above, a four pip loss would result in a $400 loss and a margin call. The traders money would be depleted.
The seven mistakes that lead to margin call include;
1. Ignorance of News events.
2. Over trading i.e high leverage
3. No trading plan and system
4. not paying close attention to margin call
5. Not using stop loss order.
6. Allowing maximum drraw on your account
7. Not researching or listening to professionals.
In a subsequent article, we would look at the mistakes indepth.
This article is written by Steven.Wilson : how to trade in zulutrade
The foreign exchange market FOREX is one of the fastest growing trading markets in the world turning over trillions of dollars ever day. This FOREX market, which involves the buying and selling of currency, has been growing progressively easier with the help of computers. This leads us to the current day trend of Auto Forex Trading, which is FOREX trading added or put on auto pilot using a computer.
Auto Forex Trading is used by setting up risk and return levels and using special software that will help you to execute these trades. Once you have found the right software with the correct settings, all you have to do is sit back and watch Forex Auto Trading at work.
Now there are two different types of Auto Forex Trading software. One type of software is able to signal the trader of when to buy and sell trades. The more advanced form works directly with you broker to execute the trades on your behalf. What does this mean? This means that with a winning strategy you can just sit back and watch the profits come in.
Now with this great opportunity comes risk. Although software and computers are amazing, without the appropriate knowledge of the software or the right risk strategy can lead to less profitable results. Also keep in mind that the software you use is highly dependent on your software. A good analogy to this software we use is with a calculator. Although you can get the same results with a free calculator and a hundred dollar calculator it just depends how much you are wanting to work.
To stay away from these pitfalls you have to have the correct risk level settings, the best software you can possibly get, and a good source of information and overall knowledge.
Auto Forex Trading could be said to have brought FOREX trading away from Wall Street and now to the average business person. Now the leverage that banks use 200:1 is now available to individual investors. This possibility for profits with limited losses combined with software has really brought down the barriers and has made Auto Forex Trading the new frontier in speculative investing and high returns.