Wise Forex Trading Amidst World Events

[milkymo]

But foreign exchange trading is not easy; it may be simple to enter and place your first trade but becoming a profitable trader is a different thing. You will need to acquire the right knowledge and techniques in order to understand and know when to enter or leave a trade always fulfilling the main aim every trader must have; making cash.

 

foreign exchange trading has the great potential of becoming a profitable and fulfilling career that will let you've a lifestyle that few other profitable activities in the world can offer to people from plenty of roads in life and without asking any of those men and females for a diploma or some special certification.

 

Technical foreign exchange traders base their trading on the analysis of the charts and the number of indicators derived from the plots of cost oscillations and patterns. Meanwhile Fundamentalists traders base their trading mostly on the essential numbers and economical indicators of countries economies. Though, even if divided, both tendencies tend to complement each other to some degree.

 

There are two kinds of analysis you can perform on the foreign exchange markets. we are known as technical analysis and essential analysis. it's common that traders tend to divide themselves into “technical” and “fundamentalists”. Each group devoting themselves to the main tools each kind of analysis gives them.

 

This dicy situation is that when unprecedented chaotic world events start to develop as the trading day goes on. The power of the media (tv, net, printed) can magnify and sometimes it may even distort the events taking place and impacting the trading journey in a significant manner. The result of this magnification and rapid diffusion of the news about the series of unfavorable events taking place is an increased atmosphere of fear, confusion and uncertainty in the trading world. And fearful traders are not liable to make the best trading choices because we have given themselves to panic and emotional reactions in lieu of reasoned and intelligent decisions.

 

In this news story I will place myself on the “fundamentalists” side and focus on one of the situations every foreign exchange trader must be aware of and don't let the events involved affect his trading efforts.

 

In short, every foreign exchange trader should be completely sure that his technique of trading has built-in safe guards (stops, limit orders) to prevent a major financial loss from his trading account in case any of the unfavorable events I mentioned above ever takes place. And being realistic, plenty of of those events will certainly happen in the future.

 

in case you need to have more specific examples of these kind of events you can search a bit inside your memories and think about the impact of a few types of unfavorable chaotic world events as the political upheavals or corporate scandals of companies as; Enron, WorldCom, or of people as the case of Martha Stewart trial, etc. there is also the example of the terrorist assaults on Sep 11 in illinois, March 11 in germany, etc. Also natural disasters: tsunamis, earthquakes, floods, freezes, droughts, hurricanes along with wars may cause great disruption in a trading journey.