As a professional investor you should learn to look at all the investment scheme is not always from the profit. There are many other factors in addition to the beautiful dream of profit you should know and one of them is called risk. Forex is an investment that belongs to high risk-high return investment program.
It means it is an investment that has a high degree of risk. But also yield a high profit back. Yes is proportional to the risk. Well, both sides of the profit and the risk is inseparable from each other. It's like a side adjacent to the currency. There is however the opposite. Yet there are opposite.
OK then let's start talking about both of these things. Then because I was a ready umbrella before it rains, I will discuss the risk side first. Hope this cheerful day not be a gray day after you read this article.
Broadly speaking, there are three main things you need to know before starting your forex investment primarily from the issue of risk.
First, the total loss possibility (this means the possibility of loss overall) could reach 90% of all the funds you invest.
Uh, what? 90%? Not so good as it sounds. Yes it is not so good. But remember this is the worst possible that might happen. Why can reach 90%, due to the God that we know helper named margin trading. Nah not gods helper again dong ...
Remember when Amir doing opening position buy as much as 1 lot in instances whenwe learn about forex investment mechanism? Well if you forgot you need to open it up again on the mechanism of forex trading.
Well, now Amir buy as much as 1 lot GBP GBPUSD pair price on 1.9600. In the case when the GBP strengthened against the USD, then Amir will benefit. Now how about if that happened instead? What if the price moves down? The extent to which the position of Amir can survive?
In the forex trading market even though you can open as many as just 1 lot and need a guarantee of only 100 Pounds, does not mean the minimum initial capital deposited was only 100 Pounds (if the Rupiah Yes approximately RP.1.5 million).
Brokers usually set a price above the minimum deposit 1 lot. There are some brokers who set a minimum account opening $ 250 or even $ 500 US. What's the point?
Yes! Correctly, to hold the position when it turns out that the price moves against the position of Amir. Now suppose that Amir started with his investment of US $ 250. 100 pounds (equivalent to US $ 196) is used as a guarantee Open position Buy he did.Then the rest of the Fund be 250 – 195 = US $ 54. This Dollar 54 funds used to maintain the position of Amir that opens when it turns out that the price moves down,instead of rising as expected of Amir.
In the forex market are typically based currency used is the US Dollar. It means that all transactions will be converted into USD and all the platforms already in the Dollar.
The question now, with the remaining funds 54 dollars, how far are Amir can defend his position? And what happens if the price moves down the Dollar and 54 runs out?
Good question.
The answer to the first question, Amir can maintain its position until the price moves down as far as 54 points because basically 1 point is 1 Dollar price GBPUSD. So if prices fall through to the rest of the funds, then 1.9546 Amir the 54 Dollar it will be exhausted.
Then what will happen?
If the rest of the funds that the 54 Dollar Amir runs out then the position of Amir open will be closed automatically by the system due to the lack of longer guarantee in the opening position. In doing so, Amir suffered losses amounting to 54 dollars and now its only remaining US $ 196. Sorry Amir ...
The situation naturally named Amir margin call. A margin call is closed in position automatically by the system due to the substantial guarantee fund owned. An unpleasant things for a trader. A nightmare to be exact.
Well now the question how long a margin call that happens with the remaining funds only 54 Dollars? Pair GBPUSD energic couple that belongs to and love to move here and there. With volatility, GBPUSD can usually move up to 100 points per day. So Amir could have experienced a margin call and lose $ 54 in just 1 day!
Wow, big? Yes indeed. Amir could have fortunately 100 dollars a day but can also experience a margin call if the rest of the Fund has just $ 250. Later we will learn further, however account opening minimum is affordable enough that is just US $250, open an account with minimal funds it is a high level of risk and is not recommended. Well, money talks and that's right. However capital will not lie.
If Amir started his investment with US $ 1000 then there are remaining funds reached US $ 775, meaning enough to restrain the movement several times. It should be noted that the prices never go up and down in one direction time. That means there's a chance after going down 100 – 200 points instead of prices again moving up past 1.9600 and Amir profited.
So that's the first risk that we learned. Quite bitter indeed.
The second is there the risk of further problems of liquidity. We have already alluded to a little above that for GBPUSD movement may reach 100 points in a day only. That means the possibility of profit/loss reached approximately Rp 1 million per day!
Well, pa means this? Means you can lose your funds and experienced total loss as mentioned above and everything that's happened in a very short time!
Try to calm down and think what if this happened to you?
You lose $ 250 in just one day! Or let's say you save 6 months to be able to start your forex investment and it turns out within 6 days all your savings gone there was no trace. Theoretically this may be happening in the forex market. Something bitter butr eal and possible. How would you feel if this happened to you?
So with 2 it is understood that the word is true indeed that forex is a high risk – high return investment program. High risk investment but also with a high return. And the two are inseparable from each other. Don't ever be fooled by the marketing that accentuates that side benefits without ever alluding to the possibility of loss that may occur. A good forex marketing shall also act as investment advisor for clients.
The latter relates to the risk is a matter of trading methods. If the dilihat-lihat of the two points that we discussed together the above certainly you concludes that the decision to perform buy/sell decision is the most crucial and very significant. When to come in, how long and buying or selling is a decision that affects our funding will bein the future.
If so the crux of all this is whether we are capable to predict price movement or not.They are reflected in the analysis we learned everyday. The trading method is what we use and how the system we have to determine whether you end your career as a trader or a looser.
The bad news, there is no single method of trading that can guarantee you will definitely experience the continuous gains. A trading system that was created by the best forex specialists around the world. This is because a system is not necessarily fit the profile of the person who wore it. Yet the issue of capitalization. Yet how to trade.Yet trading hours. Yet how to analyze. And the most important is not to mention the psychology of belonging to each trader. This causes none of the trading methods that can guarantee you have fortunately reached 100% continuously.
You can follow the best trader you will ever know. But even then it is not a guarantee You a profit.
Well how? It seems to be a forex so scary to you? I have yet to tell the stories of those who are "less successful" in forex . 's good doesn't mind. Than later sale-forex.com no longer visited people again for fear of risks of forex hihihihi.
But don't worry, I won't leave You bewildered face all the risks above. What is theworst risk is presented that might occur against your account. Anyway there are a series of ways to prevent it all happened against your investment. Here are a few things you need to consider in respect of the risk of investment in forex:
1. make sure the funds you invest more funds that are idle/devoted to it (risk capital)
We mean by idle funds are funds that are indeed "unused" or not used for a certain purpose. So it was set aside for investing and investments are at high risk. Yes. .. Yes ... Yes I know that there is no unused money. All unused. But I mean here is
Do not use the child's education fund or your family health fund to invest in forex. What will you do when your child's Education Fund loss because forex? The little one did not attend school because his father less calculation TSK ... TSK ... CK ...
Another one, it is strongly recommended not to owed to play forex. I am seriously lho. There are some people who act too bold with her credit card swipe to play forex. If you are already proficient and have sufficient experience to play the forex profit yes no comment at all. But if the past still lay owed ...
2. Don't rush to invest real just because you understand the forex techniques one-two.
Even I still learn and continue learning while this article was created. Never consider yourself too proficient in trade simply because you have read a "secret recipe" of someone who has lived the forex and profit.
3. Use a demo account for quite a period of time before starting real account.
The broker forex online trading service providers typically provide a demo account free of charge for anyone who interested in forex to practice and get used to using their platform. Privilege of a demo account is all pricing and regulation is exactly the same as real accounts. The difference is only in the world of real money we use Yes virtual money aka money knick-knack. So theoretically if you experience a profit on a demo account then the profit on a real account is not much more for you.
Now the barriers are is often though they try the demo account and their profit, time to practice on the demo is not enough. But brokers typically provide time of 1 month(and could be extended) as long as we need until we feel truly proficient and ready towards the real account. Once again an impetuous makes many unnecessary accidents become must occur.
4. Use Stop Loss and Limit to restrict the advantages and disadvantages
Stop Loss is a facility provided by the platform to limit losses that may occur in our position when an error occurs in predicting price movements. While the Limit is useful to determine at the price we wanted to do the taking profit. Both of these facilities are commonly available on forex trading platform. We will discuss further in section Forex online trading and the Facility at a glance.
OK we've learned about the risks that may occur in the following trading some way. You might start to think twice about trading due to the article you just read. Good riddance if it is indeed the case. Since that is the purpose of learn Forex. Help you to get started investing in the right way, measured and reasonable.
Surely not draw to discuss their risks without knowing how large the potential that you might get in a trade. Fair well for we also need to know the extent to which of the possible advantage we gained with forex trading. But it feels like I don't have to explain too long on this subject.
Well, there are many people who actually trade and benefit to tens to hundreds of thousands of Dollars every month. Although more of them are loss (many of them shouldn't need to loss if they have enough patience and a better way of trading),remains a field of forex investment offers the advantage of conventional investment like no other.
The potential profit on forex can reach tens to thousands of per cent each month.Some beginners forex studious and quite well acquainted with the we were able to achieve a profit in trading to reach hundreds of percent in each month. Dear record deals they couldn't we show here due to privacy.
With simple counts based on the average movement of for example a GBPUSD currency capable of moving up to 100 points a day then by installing 1 lot just a day that means we can benefit 2000 points within one month (20 days x 100). Pretty passable. Us $ 2000 if made a Dollar. That's just 1 lot. Try what if we put up a lot that gets bigger as you get the funds we have? Be big and getting bigger.
That's why many overseas traders who trade to finance their lives (even their wives)everyday. The term cool Trading for a Living. Hmm ... quite tempting isn't it? Enough of the home only and does not need to traverse the congestion in large cities, hundreds to tens of thousands of Dollars could we produce only from trading. Thus trading can also help the quality of life of those who do so and also reduce pollution on the road (he ... he ... he).
Just imagine how the resulting effect if you managed to make a proper trading formula for yourself personally. A groundbreaking financial (financial independence)became part of your life and you can now leave the destiny become your lifetime employees. Hmmm .... Sweet dream heh?
So in fact of what we learned today is that it's basically known advantages and disadvantages which may occur is comparable to each other. Market can become the best friend for anyone who profit. Instead, he can be the meanest enemies you encounter because it can loss your investment in the blink of an eye.
