best forex software trading

	Risks of FOREX Trading By Jamie Hendricks Despite the claims you may see on some FOREX web sites, FOREX is not risk-free. You are trading with substantial sums of money and no matter how much you think that you know there is always a Read more...
	Why FOREX Trading? By Gay Redmile FOREX (foreign exchange) trading is the buying and selling of currencies. Currencies are always bought and sold in pairs. As a forex trader you are speculating that the currency you are buying is Read more...
	Boost FOREX Trading Profits Using These 3 Simple Guidelines By Roxanne Manning FOREX trading is nothing more than direct access trading of different types of foreign currencies. In the past, foreign exchange trading was mostly limited to large banks and institutional traders. Read more...

No one gets it right on every trade, so be prepared to accept some losses along the way. In fact one of the keys to successful trading is to get out of losing trades early on and take your small loss if the market doesn't move as you had anticipated. Many very successful traders are right only on 50% of their trades. They take small losses and let their profits run.

Unfortunately, many novice traders do just the opposite. They don't want to take a loss so they wait until a small loss has become a major loss. Then due to a serious depletion of capital they are either forced to accept the big loss or just get plain scared and bail out.

Than when they have a winning trade they get so excited they cash out way too early and leave a lot of money on the table. This type of trading pattern must be overcome if you are to become a successful trader. You must learn to cut losses short and let good positions run into serious money. Easier said than done for most traders.

Scams

FOREX scams were fairly common a few years ago. The industry has cleaned up considerably since then, but you still need to exercise caution when signing up with a FOREX broker. Do some background checking ? reputable FOREX brokers will be associated with large financial institutions like banks or insurance companies and they will be registered with the proper government agencies. In the United States brokers should be registered with the Commodities Futures Trading Commission (CFTC) or a member of the National Futures Association (NFA). You can also check with your local Consumer Protection Bureau and the Better Business Bureau.

Risks

Exchange Rate Risk - This refers to the fluctuations in currency prices over a trading period. Prices can fall rapidly resulting in substantial losses unless stop loss orders are used when trading FOREX. Stop loss orders specify that the open position should be closed if currency prices pass a predetermined level. Stop loss orders can be used in conjunction with limit orders to automate FOREX trading ? limit orders specify an open position should be closed at a specified profit target.

Interest Rate Risk - can result from discrepancies between the interest rates in the two countries represented by the currency pair in a FOREX quote. This discrepancy can result in variations from the expected profit or loss of a particular FOREX transaction.

Credit Risk - This is the possibility that one party in a FOREX transaction may not honor their debt when the deal is closed.

This may happen when a bank or financial institution declares insolvency. Credit risk is minimized by dealing on regulated exchanges which require members to be monitored for credit worthiness.

Country Risk - is associated with governments that may become involved in foreign exchange markets by limiting the flow of currency. There is more country risk associated with 'exotic' currencies than with major currencies that allow the free trading of their currency.

Limiting Risk

Every FOREX trader needs to know at least the basics about technical analysis and how to read financial charts. He should study chart movements and indicators and understand how charts are interpreted. There is a vast amount of information on FOREX trading available both on the Internet and in print. If you want to be successful at FOREX, know what you are doing.

A stop-loss order contains instructions to exit your position if the currency price reaches a certain point. If you take a long position (expecting the price to rise) you would place a stop loss order below current market price. If you take a short position (expecting the price to fall) you would place a stop loss order above current market price.

As an example, if you take a short position on USD/CDN it means you expect the US dollar to fall against the Canadian dollar. The quote is USD/CDN 1.2138/43 - you can sell US$1 for 1.2138 CDN dollars or sell 1.2143 CDN dollars for US$1. You place an order like this:

Sell USD: 1 standard lot USD/CDN @ 1.2138 = $121,380 CDN Pip Value: 1 pip = $10 Stop-Loss: 1.2148 Margin: $1,000 (1%)

However, USD/CDN falls to 1.2118/23. You can now sell $1 US for 1.2118 CDN or sell 1.2123 CDN for $1 US.

Sounds like fun, eh?