Everyday, you make a lot of personal and financial decisions that shape your financial life. Seven days a week, twelve months a year, you choose how to spend, save, and share your money, time, and effort on people, things, and activities that matter to you. But how often do you think about the risks associated with the personal and financial decisions you make? In this article, you will discover a number of risks involved in making your personal and financial decisions and explore what actions you can take to manage them.
The Non-Farm Payroll (NFP) Report is a key economic indicator for the United States. It is intended to represent the total number of paid workers in the U.S., minus Farm Employees, Government Employees, Private Household Employees and Employees of Nonprofit Organizations. The non-farm payroll report causes one of the consistently largest rate movements of any news announcement in the forex market.
1) Knowledge Deficiency – Most new FOREX traders don’t take the time to learn what drives currency rates (primarily fundamentals).
2) Overtrading - Trading often with tight stops and tiny profit targets will only make the broker rich. The desire to “just” make a few hundred dollars a day by locking in tiny profits whenever possible is a losing strategy.
3) Over leveraged - Leverage is a two way street. The brokers want you to use high leverage because that means more spread income because your position size determines the amount of spread income; the bigger the position the more spread income the broker earns.
4) Relying on Others – Real traders play a lone hand; they make their own decisions and don’t rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you.
Chief Technical Analyst, John Murphy, is a very popular author, columnist, and speaker on the subject of Technical Analysis. John’s “Ten Laws of Technical Trading” is the best guide available anywhere for people who are new to the field of charting. I urge you to print out this page and refer to it often. If you find this information useful, consider subscribing to John’s Market Message Service.
Which way is the market moving? How far up or down will it go? And when will it go the other way? These are the basic concerns of the technical analyst. Behind the charts and graphs and mathematical formulas used to analyze market trends are some basic concepts that apply to most of the theories employed by today’s technical analysts.
Risk management is the single most important concept to learn when trading the forex markets.
Without good money management an exceptionally gifted trader will lose just as much as a bad trader. So, while a good risk management system may not fully rescue a losing strategy, a winning strategy cannot possibly succeed without good risk management.
Some like to play lotto or casino, and others love the excitement of trading with stocks and currency. They all want to find a system with a high profit and no risk, but believe me it does not exist and never will. Forex have work out several of trading systems adjusted to the risk you are willing to take with your investments.