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VantageFX - 10 Simple Steps To Avoid Forex Trading Catastrophe

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10 Simple Steps To Avoid Forex Trading Catastrophe. Read about Online Forex Trading Now!

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VantageFX - 10 Simple Steps To Avoid Forex Trading Catastrophe

  1. 1. 10 Simple StepsTo avoid Forex trading catastrophe
  2. 2. 10 SIMPLE STEPST O AV O I D F O R E X T R A D I N G C A T A S T R O P H ERUN YOUR PROFITS, NOT YOUR LOSSES!It may a simple equation, however many traders have a tendency to make the age old mistake ofprematurely closing profitable positions while keeping losing trades in the game. At the inception of thetrade, set your contingencies according to your desired risk profile, while giving yourself a fighting chanceto come out on top should the market swing in your favour. Fear of losing brings out a natural urge in allof us to wait in anticipation of a reversal, prompting a trader to adjust or remove stop loss contingencies,while the excitement of a profitable trade may find a trader scrambling for the close button before yourdesired target is achieved.ALWAYS TRADE WITH POSITIVE EXPECTANCYIn the same vein as the aforementioned ‘run your profits, not your losses’ it’s of paramount importanceto always trade a positive expectancy based trading system. In short, if your profits are larger than yourlosses on each trade, you may only need to win a small percentage of trades to achieve an overall profit.USE LEVERAGE WISELYTrading Forex and other financial derivatives can allow a trader to access a significant amount of leverage.In essence, leverage gives you the ability to amplify your position size using only a fraction of the nominaltrade value as a deposit. While this may enhance flexibility by allowing a trader to increase position size,it’s imperative to consider the implications should the market fail to move in your desired direction. Inshort, understand the concept of leverage, be conscious of your total trade size and recognise how thiswill affect your bottom line should your central view fail to materialise, while keeping your contingencyplans firmly in place.w w w. v a n t a g e f x . c o m 2 | 10 Simple Steps
  3. 3. 10 SIMPLE STEPST O AV O I D F O R E X T R A D I N G C A T A S T R O P H EDON’T HEDGE YOURSELF OUT OF EXISTENCE!Hedging for the purpose of mitigating risk is extremely important for many professional traders andcompanies, however for the retail trader it can be a foolhardy exercise. In theory, the practice of hedgingyour exposure may seem appealing, however many traders may open an equal and opposite hedge to avoidthe inevitable – taking a loss. It ultimately adds to your overall transaction cost and in many cases resultsin multiple hedged positions with zero exposure to the market, which at some point needs to be unwound.SIMPLE IS OFTEN THE BESTAvoid the temptation of using a complex web of indicators in an effort to create a ‘grand’ trading strategy.While it may seem logical to find a treasure trove of indicators pointing to the same conclusion, it’srarely the case; instead it often results in exasperation and confusion for new traders before the first livetrade is executed. Professional’s will take the initiative to explore new and potentially profitable tradingsystems, while exercising caution and restraint before putting their hard earned cash on the line.                                                                                  TRADING ROBOTS – IF IT SEEMS TOO GOOD TO BE TRUE IT PROBABLY IS...Exercise caution when using automated trading robots or high frequency trading systems. Trading with robotscan be an effective and efficient emotion-free way of trading, however it is important you understand whatyou’re buying and do your due diligence before putting your hard earned cash on the line. w w w. v a n t a g e f x . c o m 3 | 10 Simple Steps
  4. 4. 10 SIMPLE STEPST O AV O I D F O R E X T R A D I N G C A T A S T R O P H EUNDERSTAND THE VALUE OF BOTH TECHNICAL AND FUNDAMENTALINDICATORSWhile a trader may primarily identify with either a technical or fundamental approach to trading,it’s important to understand the value of both methods. Watch for key technical milestones, whileunderstanding the potential implications a top-tier news event may have on price action.TRADE WITHIN YOUR MEANSForex trading by its very nature is a speculative enterprise, and while a trader may be tempted to usecapital assigned for day-to-day living costs it goes without saying the importance of diligently ensuring youonly trade with funds specifically set aside.  Forex trading can be stressful, why place further stress ononeself by trading scared money.A SMALL TRADE’S A GOOD TRADEUnless you’re a seasoned professional, start small; understand your exposure to the market and maintainconservative positing relative to your capital base. All Forex traders will be invariably tempted at somepoint by the allure of ‘the big win.’ This of course encourages risk taking behaviour, given the need tosharply increase positioning in effort to scalp the market for quick and unrealistic returns.w w w. v a n t a g e f x . c o m 4 | 10 Simple Steps
  5. 5. 10 SIMPLE STEPST O AV O I D F O R E X T R A D I N G C A T A S T R O P H EEDUCATE YOURSELFAs with all worthwhile endeavours, trading takes commitment, hard work, and dedication. So educateyourself! This of course doesn’t entail spending thousands of dollars in a ‘unlock the secrets of trading’type education program. While some of these programs may provide invaluable education on the finerpoints of FX trading or a particular trading strategy, there are a myriad of free, simple tools availablefor those who would prefer to keep their starting capital in their pockets. Speak to a Vantage FXrepresentative to find out more about valuable resources available from independent websites that won’terode your capital base before you even start.w w w. v a n t a g e f x . c o m 5 | 10 Simple Steps
  6. 6. 10 SIMPLE STEPST O AV O I D F O R E X T R A D I N G C A T A S T R O P H EWANT TO LEARN MORE ABOUT FOREX?ACCESS THE FREE FOREX EDUCATIONAL TOOLS ON OUR WEBSITE GET YOUR FOREX TRADING STARTED WITH AN AWARD-WINNING PROVIDER TODAY. VISIT WWW.VANTAGEFX.COM FOR A FREE 30-DAY RISK FREE DEMO ACCOUNT.w w w. v a n t a g e f x . c o m 6 | 10 Simple Steps
  7. 7. 10 SIMPLE STEPST O AV O I D F O R E X T R A D I N G C A T A S T R O P H EABOUT VANTAGE FXVantage FX is an award winning Australian financial services firm providing online Forex trading capabilitiesto retail, high-net worth and institutional clients in Australia and the rest of the world.Vantage FX is a Corporate Authorised Representative of Enfinium Pty Ltd (AFSL No. 322081), who acts as alicensee and outsource provider to oversee our compliance with Australian Financial Services Law and therequirements of holding segregated client funds at approved banks.As a financial services provider, we are regulated by Australian Securities and Investments Commission(ASIC) under Australian law. Vantage FX is continually striving to provide a client-friendly, totallyinteractive Forex experience. As a team we always look to innovate and take advantage of the latesttechnology, the benefits of which we pass on to our clients. What set us apart from our competitors areour wide range of services and a superior level of customer support VISIT OUR WEBSITE AT WWW.VANTAGEFX.COM TO FIND OUT MOREVantage FX is the online Forex trading arm of Enfinium Pty Ltd which is authorised and regulated by the AFSL 322081. Risk Warning:Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. TradingDerivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independentadvice if necessary. The information in this guide is not directed at residents in any country or jurisdiction where such distribution oruse would be contrary to local law or regulation. A Product Disclosure Statement for this product is available from Vantage FX Pty Ltdand should be considered before deciding to enter into any derivatives transactions also a financial services guide is available by going tohttps://www.vantagefx.com and clicking on the link at the bottom of the page. The FSG and PDS need to be read and understood beforedeciding to enter into any Derivative transactions with Vantage FX. Vantage FX Pty Ltd offers general advice only and no considerationwill be given to individual investment objectives, financial situation and needs. Vantage FX is a Corporate Authorized Representative ofEnfinium Pty Ltd AFSL 322081.Please be advised, the services and products offered by Enfinium Pty Ltd are not being offered within the United States and are notoffered to US residents or citizens. Enfinium Pty Ltd is not registered with any US regulator including the National Futures Association("NFA") and Commodity Futures Trading Commission ("CFTC").w w w. v a n t a g e f x . c o m 7 | 10 Simple Steps

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