Common trading strategies Although each person’s strategy should be unique, there are a few that traders commonly gravitate to. These can be tailored to fit your specific skills, goals and risk appetite. No one strategy is superior to another. It all depends on how you want to trade. It is also worth remembering that, no…
How to build a strategy? As we mentioned previously, trading strategies aren’t ‘one size fits all’. The one you follow should be tailored specifically to you and the way you trade. As such, there’s no blueprint for creating the perfect strategy. However, there are a few things you should keep in mind when building yours….
What is a trading strategy? Something you may hear often in online trading is “a failure to plan is a plan to fail”. This couldn’t be more true. Building a trading strategy or plan is one of the most important things you’ll do as a trader. This isn’t a case of ‘one size fits all’. A…
The pros and cons of leverage Do you feel like you now have a good understanding of leverage, margin and how they work? Are you sure? Good. Because before even thinking about trading spot forex, you need to be completely comfortable with these topics. You may remember us referring to leverage as a double-edged sword….
How does leverage work? Now that we’ve covered the basics when it comes to what leverage and margin mean, let’s see how they work using some more detailed trading examples. Forex leverage example #1 – Buying USDCAD Let’s say you want to open a long position on USDCAD and you currently have $10,000 in your…
What is margin? Now that you’ve understood the concept of financial leverage, let’s take a look at margin. Leverage goes hand in hand with margin, in fact, trading with leverage is often referred to as trading on margin. So, what exactly is margin and how does it play into your trading? How margin affects trading…
What is leverage? As we’ve discussed previously, one of the characteristics of spot forex is the ability to trade using financial leverage. But what exactly is leverage? Using financial leverage Essentially, financial leverage acts as a multiplier, allowing you to control larger positions on the market with less of your own money. Leverage is expressed…
What is an order? So, you’re ready to place your first trade. That’s great, but how exactly do you do it? You need a way to convey all the relevant information about your trade, so that it can be executed on the market. In spot forex trading, this is known as ‘placing an order’. What…
Why do forex traders go short? As we’ve mentioned previously, one of the distinguishing characteristics of trading spot forex over stocks, for example, is that you can sell currency pairs, without ever having bought or borrowed them. But why do spot forex traders go short in the first place? Trading both rising and falling markets…
Going long and going short When trading spot forex, there is no physical delivery of currencies. Rather, you are taking a position on the price movements made by currency pairs. Since there is no ownership of the underlying asset, you can take both long and short positions, which is one of the characteristics of forex…
