Monday, June 29, 2020
Coinexx Review 2020: Must watch before Trade
Watch on YouTube here: Coinexx Review 2020: Must watch before Trade
Via https://www.youtube.com/channel/UCJqrI1ub1OEPYvml7L31dYA/videos
Saturday, June 27, 2020
Thursday, June 25, 2020
Monday, June 22, 2020
Sunday, June 21, 2020
Friday, June 19, 2020
Thursday, June 18, 2020
How to trade forex with $100 [ small cap trading strategy ]
so you want to start trading and want to know How to trade forex with $100, then keep reading. For the last 20 years or so, brokers around the world have allowed retail traders to jump in and start trading currencies. Believe it or not, at one point in time you needed at least $1 million to trade currencies, and you would have had to have done so through specific banks. This spread would have typically been several handles, meaning hundreds of pips. This of course has changed in the 21st century as the retail sector has gained so much in popularity.
That being said, attracting a lot of retail traders does open up some specific questions now, due to the fact that retail traders typically trade with small amounts of money. Yes, there will be some people who have significant amount of money to trade with, but most of the people are simply entering the market with little in the way of trading capital.
How to trade forex with $100 – Need to consider
Being undercapitalized can be dangerous
One of the most dangerous things for a retail trader is to be undercapitalized. This is because with high leverage, you can quite often trade 50, 100, or even more times the amount of margin available to place a trade. The biggest problem of course is that although you can enjoy massive gains, being able to trade larger positions also means you can suffer massive losses. Being undercapitalized and not understanding the market is one of the most dangerous combinations the traders come into Forex with.
With all that being said, it does not necessarily mean that being a smalltime trader is a death sentence. You need to have a bit of money management practiced in order to survive. When you are a small Forex trader with a small account, survival is absolutely paramount. Fortunately, Forex accounts quite often can trade with as little as one penny a pip. In other words, it is quite often that you can take very minimal risk. Ironically, it is the high leverage that attracts traders into the currency market that is also their biggest enemy most of the time.
Expectations must be realistic
You must keep your expectations realistic. For example, you cannot expect to open up an account with $100 and become a millionaire by the end of the year. A simple statistical analysis and an understanding of compound interest will tell you just how impossible that is. However, that does not mean that you cannot grow your account over time. If you have a small account, you simply must be more patient with your gains. For example, if you have a $100 account, doubling it will only turn it into a $200 account. Doubling an account is quite a feat, and certainly something that would be an achievement to be proud of. Doubling an account is something that very few traders do unless they are thinking longer-term and protecting their accounts from significant losses. In some ways, trading a smaller account is much more difficult than trading a larger one.
Do not forget you can add to your account
Compound interest will work for and against you. However, one thing that you can do quite easily is simply add a little bit to your account as you gain. For example, you can set incremental deposits into the account, raising the value of account right along with your gains. This is the way to “supercharge” your account, and perhaps grow it into something that is quite profitable over the longer term. At the end of the day, if you choose not to add to the account and simply start with a small deposit, time and patience will be what you need more than anything else. This will be accomplished by using money management and keeping your expectations realistic. You have to keep your position size in line with what your trading, otherwise it is only going to take truly little in the way of losses to wipe you out.
The post How to trade forex with $100 [ small cap trading strategy ] appeared first on The Diary of a Trader.
Tuesday, June 16, 2020
Monday, June 15, 2020
Friday, June 12, 2020
Monday, June 8, 2020
How to use the ADX indicator in Forex – ADX indicator formula
The ADX, also known as the Average Directional Movement Index, is an indicator that Forex traders will use in order to measure the strength of a trend. It represents the average of price ranges that are expanding or contracting. It shows a line that moves up and down with several levels on a window at the bottom of the chart underneath the price graph. It measures the strength of the movement but does not define the direction of the movement. It measures strength using a basic scale.
What ADX Indicator measures
The Average Directional Movement Index measures the moving average of expansion of price during a specific amount of candles. The default setting for this indicator is 14 candles, and that will be by far the largest amount of examples that you will see out there in technical analysis. The indicator has no directionality building, it simply measures whether or not a trend is strengthening or weakening. It will show a single line that goes up and down between the 0 level and the 100 level. It will measure higher levels based upon price expanding over the last set amount of candles. It will also start to drift lower if the price expansion moving average is getting lower over the same set of candlesticks.
It should be noted that there are also +DI and -DI lines on the chart that are calculated, but quite frankly most Forex traders completely ignore them. This is based upon a larger trading system that Bill Williams used to use, so therefore unless you are trying to trade that specific trading system, you will simply ignore those.
What it means
In order to read the ADX, you need to understand that there are certain levels that people pay the most attention to. For example, if the reading is below 25, it tends to mean that there is a weak or nonexistent trend. If the ADX is between 25 and 50, it is considered to be a strong trend, while between 50 and 75 is a very strong trend. Above 75 to the 100 reading is the strongest of all trends.
By looking at the number that the ADX is flashing, it can verify whether or not we are trending, and perhaps more importantly whether or not a specific trait up makes sense. The ADX is in the secondary part of a trade for most traders, as they are looking for candlestick setups or some other such reason to get into the trade, with the ADX confirming whether or not the market is starting to pick up momentum. If you can find a decent set up that also called site quite nicely with a strong ADX reading, it only gives you more of a reason to be involved.
Let profits run? Or heed warning?
The great thing about the ADX is that if you are already in a trend and have already placed your trade, it can give you a bit of a “heads up” if the momentum is slowing down. If they are not, then you simply let your profits continue to run, one of the best ways to make money in the market. However, if the ADX starts to dip lower in your trade, then it can give you an idea that it may be time to start thinking about taking your profit.
Furthermore, there is also the possibility of divergence, meaning that as price moves in one direction, the ADX moves in the other. Because of this, it shows that perhaps although price is moving in a specific direction, there is no real conviction behind the trade, showing what is known as “divergence” by most traders. This is true with all oscillators, but ADX tends to be one of the better ones for this type of trading.
The post How to use the ADX indicator in Forex – ADX indicator formula appeared first on The Diary of a Trader.
Wednesday, June 3, 2020
How to trade forex options – FX Options Explained
You can trade currency using options, instead of betting on the spot price. This allows you to define your total risk, going into the trade. For example, you can buy a call option, which gives you profit if the markets break above a specific level, or you can buy a put option which gives you profit if the markets fall below a specific level. You can also sell both of those options in order to benefit from the market not getting there. There are a whole host of various strategies to go far beyond the scope of this article but suffice to say options are a great way to mitigate risk going into a trade.
It should be noted that the only true options exchange is the CME Group in Chicago. Yes, there are liquidity pools that will match up options just as they will spot Forex and are regulated. However, they are not true exchanges and there is a bit of a difference.
Calls and puts
There are two different types of options, known as “calls” and “puts.” A “call” is betting that the market is going to rise in value while a “put” is the opposite, betting that the market is going to fall in value. The great thing about options is that you buy one of these at a set price and cannot lose any more than the agreed to value of the premium paid. If the market does not do what you want it to do, you simply lose whatever you paid, and the option expires worthless.
However, some people will sell these options, which is a little bit trickier, but does generate income. For example, if you sell a “call” with a strike price of 1.11, meaning that it pays off above that level, and the buyer pays a premium of $300 at the time you are selling, you get to collect at $300. However, it is worth noting that if the trade goes against you, it is likely that your losses will start to accelerate at an exponential value. In other words, it can be quite expensive if you hang on to that position. However, it is a great way to collect premium from a longer-term standpoint, as long as you know basically where the market is not going to go.
Strike price and expiration
Options have both a strike price, meaning where they are geared to and where they pay, and in expiration. Quite often you will see something like a strike price of 1.17 in the EUR/USD, and the expiration can be anything from minutes to hours, days to weeks. Be aware of when the expiration is because the value of the option starts to deteriorate much quicker the closer you are to the expiration if not “in the money”, which means that the market has reached whatever price was expected. If it is getting late in the option life, this is statistically calculated based upon the likelihood of the option becoming valuable.
Hedging
A lot of longer-term Forex traders will buy puts on a long position they plan on holding to for quite some time. For example, if you believe that the Euro is going to rise against the dollar over the next five years, occasionally buying a put is a cheap way to keep yourself in the market. If you buy a put for $200, and the market goes against you and hits the put strike price, you may be able to mitigate quite a bit of your losses from the longer-term “buy-and-hold” spot Forex trade. Worst case scenario, you lose the $200 that you had bought for “insurance purposes.”
Options in general
There are hundreds of options strategies, and that clearly is beyond the scope of this video or article. However, we wished to introduce you to the concept as options are most certainly an unbelievably valuable strategy for those looking to play the market from a longer-term standpoint, or simply defined their risk ahead of time. By being aware of this market, it can expand the way you trade currencies.
The post How to trade forex options – FX Options Explained appeared first on The Diary of a Trader.
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