THREE FOREX TRADING LESSIONS FROM SUCCESSFUL TRADERS:

In this article, the important lessons for becoming a good forex trader are given. According to the experiment conducted by Dennis who was great forex trader, he taught a crew of people from different backgrounds like actors, auditor, security guard and various categories of people about the forex trading techniques and they were able to make million dollar profits with the forex education given by him.

There are 3 major facts about this experiment that is mandatory for any forex trader in order to succeed in the business.

1. Forex Trading Systems which are simple Show Great Results:

The simple system was a trend that followed the breakout system that was used for long term trading. The fact is that simple systems work well in forex trading markets and they are very robust and powerful. Complex forex trading systems have a chance to lose, as they contain many components to break and we might need to keep our system very simple. Their technique to have long term strategy for break out was a superb strategy for forex trading and is in existence till now.

2. Money Management is Crucial for Successful Forex Trading: (more…)

Determinants of Forex Trading Rates

In the world of foreign exchange trading (forex), the rates could not be determined or decided just as how the traders would like. Instead, the rates fluctuation in foreign exchange may vary.

One of the determinants that can be used to understand the fluctuation rates is the international parity conditions. This determinant includes the parity of purchasing power as well as good parity of interest rate, International Fisher Effect and Domestic Fisher Effect. These are the theories that offer logical explanation about fluctuations in the rates of foreign exchange. However, these theories are based on assumptions that can still be challenged because they seldom happen in the foreign exchange market in the real life. These include free goods flow as well as services and capital.

The other factor that is also of great importance is how well balanced the payment model is. The payment model puts a significant focus on services as well as goods that are eligible for trade. However, the payment model does not care about the global flows of the capital which has an ever-increasing role. The payment model failed as well in terms of providing proper explanation for the appreciation trends of dollar that has been lasting continuously since the year 1980. The payment model did not succeed either in explaining the deficit that to the account of the United States that took place in the 1990s. (more…)