Like anything else in the financial world, the Forex arena isn’t void of lies and stupidity. Just cruise around the Forex forums out there and you’ll see it. Today, I want to share 4 Forex lies told to our community that many beginners tend to believe. Avoid these at all costs.
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Well last night certainly was a blast. In a major move of intervention, the EUR/USD skyrocketed some 300 pips to fire across the 2500 line like it wasn’t even there. Might we see more upside?
My gut reaction said no, which is why I entered a short once momentum stopped. The EUR/USD has just dipped under 1.2500 as of this writing and London is due to open in about an hour.
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Last night (my time) I was minding my own business shorting the GBP/USD. I shorted it above the 1.5050 level because my technical analysis showed that it should come down below 1.5. What happened next was a reminder of the power of news.
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When I started looking into currency trading I wasn’t sure what to read. Today, I look around and see so much confusion. There are many book options—some far better done than others. And when does it all become redundant? You certainly don’t need to read 15 books that all teach the basics. I think the best thing for newer currency traders is a concrete path to follow.
With this in mind, I’ve put together a 5-step plan that contains 5 currency trading books you should read and the order in which you should read them. The idea for this list is to reduce the noise and confusion out there and to build a solid foundation that will allow you to branch out into whatever direction you wish.
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So I’m looking at the EUR/USD one day and see a lot of indicators pointing to a movement south. You have all the EU problems, recent news that isn't favorable, decent US news and several technical indicators on various charts showing the down move is here. And then the currency pair proceed to go up 100 pips.
I’m reminded of something John Maynard Keynes ones said, which I keep in my head at all times. “Markets can remain irrational a lot longer than you and I can remain solvent.”
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If you’re new to currency trading, there’s a good chance you have a headache right now. There’s so much information out there. So many ways to trade, so many news reports, and so many opinions. It’s easy to get paralyzed by all the information and it’s real easy to be misled.
I’m going to give you 4 tips to help ease you into currency trading. It’s basically what I did at first and it helped a lot.
Today, I was browsing over at the ForexFactory.com forums and I read a post from a trader (most likely newer) who went short on a currency pair way too soon and was down over 220 pips and counting. And he's still in the trade. Sadly, this is a recurring theme with newer currency traders.
He thought the pair could go down and it went against him. That by itself is not the worst of crimes. We all make mistakes. You just get out and go to the next trade. Unfortunately, this trader failed to exit the trade and didn’t have a stop-loss in place. Ouch.
This morning the monthly Existing Home Sales numbers were released and they were disappointing. We were expecting a 5% - 6% increase, instead we got -2.2% (annual rate: 5.66M). And immediately the talk of a double dip recession heated up.
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Read just about any currency trading book or forum and you’re bound to find someone beating the war drum of demo trading for new Forex traders. But, I’m not one of them. While I do think demo trading has its place, I also think that people overvalue the benefits of demo trading in the beginning. And here’s why.
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I’m sitting here thinking about what the first official article for Capitalist Nation should be. So many topics to cover and issues I want to bring up. But what could be better and more exciting than talking about the biggest Forex mistake I have ever made? Trust me, you want to read this—especially if you're just getting started in the world of currency trading.
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