Archive for the "Trading" Category

24.03.2010 Post in Trading

InstaForex Company introduces a new instrument for trading on the international currency market Forex.

PAMM-system consists of one or more investors’ accounts which are used by the managing trader.  PAMM-system function is managing the total capital of the investor and distributing profits and losses between all participants proportionally to the investments.

PAMM-account is a special trading account for operating in the financial markets by means of which a trust manager controls both his own capital and the investor’s one. And the funds are not transferred from account to account of the manager.  The managed PAMM-account belongs to the grantor, but all trading operations are carried out by the managing trader without the right of funds withdrawal. Amid this, all market risk is carried by the grantor.

PAMM-system affords an excellent opportunity of collective funds investment for traders.

There are two types of PAMM-accounts:

  1. PAMM-account of the Investor
  2. PAMM-account of the Trader

pamm-pic

Features of these account types lie in that a PAMM-account of the Investor can invest funds only in accounts of PAMM Traders, and PAMM-accounts of the Traders in their turn can accept investments from PAMM Investors accounts.

PAMM-system has a few essential distinctions from the trust management, and one of them is that the manager trades primarily with his own money and even beginning working with investors he is not allowed to withdraw his funds.

An important characteristic of PAMM-system is risk diversification – funds investment by PAMM-investors in PAMM-accounts of different managing traders that decreases the risk of loss bearing.

Special for PAMM-traders InstaForex Company has devised a unique innovation in the system: investments intake from different Investors on one PAMM-account that is not offered by any of brokerage companies in the world. One-of-a-kind technique of funds calculation is the creation of the company’s management and the offspring of the programmers’ annual work.

As of today, PAMM-account system by InstaForex Company comes as the best one due to its opportunities both for managing traders and investors.

Added by Anna Shubina,
InstaForex Clients’ relationship manager

17.03.2010 Post in Trading

Nowadays everybody faces the concept of Forex currency market. Recently, such concepts as currency pair, analytics, Forex candles, day and tick charts were known and understood to the close circle of people, working at Forex currency market. Today, the advertisement about Forex can be met everywhere: on the radio, TV, the Internet, huge outside banners. They all propose opening trading accounts with one Forex company or another.

In addition, opening account, starting with $1, is offered. We can meet brokers and dealing centers, analytical reviews, and the profitable strategy is only for $5.

Due to active advertising and promotion, now most everybody knows about Forex, and everyone, wishing to get easy money, enters the market, thinking that he is ready for trading on Forex. Learning basics of technical and fundamental analysis, knowing about the Elliott waves and trying to estimate a trend reversal on the moving average, few of the currency trading beginners pay attention to one of the methods of graphic analytics – Forex candles.

It is absolutely natural that every trader uses not only Forex candles in trading. There are three graphic indicators of price and its forecast:

– bars

– lines

– Japanese candles

Often, “Japanese candles” are called Forex candles and they are considered the most indicative and efficient in trading among experienced Forex traders. And, the beginner should give special priority to Forex candles.

The graphic analysis was found about 300 years ago in Japan, and it got this name as for more demonstrative example of price movements and the difference between opening and closing figures,ordinary candles were simply laid on a table in the Middle Ages.

The core meaning of using Forex candles is in the following: if the close price is higher then the open price, a Forex candle is white; and if the close price is lower than the open price, then correspondingly, the candle is black. Thus, having analyzed the positions of black and white Forex candles and the derivated from them groups, it is possible to forecast the direction of the trend in the nearest future with a large percentage of certainty.

Added by Denis Minenkov,
InstaForex Clients’ relationship manager

10.03.2010 Post in Trading

Stop-loss is an order to stop, used for loss control. During the movement of the position towards losses, stop-loss goes off for its close. A broker closes the position, when the value of the ‘buy’ or ‘sell’ currency order reaches the setup level. If the chart’s curve has not moved in your direction, the loss is fixed, if the curve went to the profit direction and then reversed, the profit is fixed.  Thus, having setup the stop-loss in the loss point will help you not to lose a large sum of money. In case your forecast has appeared correct and the price is moving in the positive for the setup order direction, but you consider, that it is early to close the position, it is necessary to setup the stop-loss order in the passed through level, where it is still possible to save the profit. And further on irrespective of the future events you only have to wait for profit.

Take-profit is a pending order for the position close at the setup price, used for fixing the profit. Take-profit and stop-loss function on the analogy, though, take-profit is fixing only profit.

So, setting a take-profit order in a forecasted point in advance, you suppose that after a certain period of time the order will reach the profitable level, and you think that in this point exactly it is needed to close the position and fix the profit.

Stop-loss and take-profit are often setup together, in case the forecast has appeared true- you gain the profit, if no, you will lose only the sum you are prepared to lose.

The most part of trading terminals offer such service as a trailing stop. On setting up a trailing stop, the following occurs: the terminal does not operate until the position has not started its movement in the profit-bringing direction. At that moment, the terminal sets up a stop-loss at a certain distance from the current price. On receiving the quoting, at which the distance between the current price and the stop-loss will exceed the certain quantity of points, the terminal sends the command for the stop-order change by a few points distance from the current price. In accordance, a trailing-stop is a certain algorithm of stop-loss managing. But it is necessary to remember that this option is functioning only when the terminal is started up and exchanges the up-to-date information.

Added by InstaForex Staff

05.03.2010 Post in Trading

Day by day the popularity of Forex market is steadily increasing. At present, there are no people left who don’t know what it is and how to earn on it. However, trading is rather complicated process: only 10% of traders, entering Forex market, work and really earn. All failures of newbies consist in their unwillingness to learn all the niceties of Forex trading, and this causes loss of all invested funds. Strong influx of traders was noticed when brokers gave an opportunity to trade at mini trading accounts. Forex statistics is extremely useful thing for people who trade at the international Forex market as well as for people who are interested in processes occurred in the world economy. Forex statistics includes such indicators as economic situation in a country, important facts of the business world, industries development data, currency indexes.

In order to distribute investments rationally transnational corporations and large banks use Forex statistics. Traders and brokers exploit Forex statistics to be able to orient in the market situation and make proper decision on purchasing a currency.

Forex statistics helps trader to monitor the currency rates changes during a long period of time and, moreover, Forex statistics can also clarify the reasons which influence the market.

At present moment, each trader can use market statistics of trades at Forex market which they find at the universal portal for traders MT5.com. Current trends of the market are presented in the section “Market inside”. Trader can visually consider all movements inside the market in whole and of certain its segments. The information provided in this section will be useful for traders who evolve a trading strategy on the principals of fundamental analysis. Constantly referring to this section you will be able to give advance notice of market movement due to the information about its fundamental changes to some directions. At the page “Market inside” trader will find the fullest information about: number of deals by the currency pairs, summary positions, trades volume, number of pending orders, pending sells and pending buys and volume weighted entry point.

Added by Evgeny Staroviborny,
InstaForex Development manager

25.02.2010 Post in Trading

Working 24/5 at Forex market it is possible to be earning money for several weeks, and loose everything in just a few minutes. Absolutely everybody, from a beginner to a professional, has experienced this. Thus, every trader should understand, that risky factor always exists and you should be ready for anything. A constructive approach, attention and logically adjusted analysis will help you to find correct answers to your questions.

Below, 9 topics will be discussed in order to prevent the traders from losing their track.

Fact 1

Traders, who predominantly experience intraday and short-term trading, can be added to the group of unlucky fellows. But the general reason for all failures is not that they are under time restrictions, but the fact that they do not have a good training and a clear-cut scheme of actions during their work. The absence of knowledge and educational background at this type of trading does not forgive even momentary mistakes; any misstep can bring to the loss of the deposit sum. Moreover, such traders often do not have sufficient funds on their trading balance. More successful traders can be trading mid-term or long-term.

Conclusion:

From a statistical point of view, a mid-term and a long- term trade have a greater possibility of profit. The same can be told about the invested funds, a chance of staying at market wholly depends on the sum of the initial capital.

Fact 2

The traders, who have no luck, often spend much time on the analysis of where the market will be tomorrow, on the contrary, more successful traders decide on the actions under the current conditions, and according to these conclusions are building their strategy.

Conclusion:

If a trader can predict the reaction of the mass, luck will be on his side. An opportunity to increase the capital considerably grows, if a trader can react to irrational buying and selling of the majority by a logical plan of actions. Consequently, being a lucky analyst is more difficult than being a lucky trader. An analyst has to make a more difficult work, as he should forecast the movement of the market and recommend how to get maximum profit, while a successful trader just has to follow the market.

Fact 3

More lucky traders pay attention to the deals which brought loss and the ratio of the risk to the profit, while the failures concentrate on profitable operations.

Conclusion:

Paying attention to the risk is more important than to the profit or losses. The traders, who consider trading from a professional viewpoint, always take into account, how much they can gain and how much they cam lose.

Fact 4

As a rule, the traders, who cannot control their emotions, are impossible to be called lucky. Successful and more experienced traders analyze the market without emotions.

Conclusion:

The trader’s approach cannot be named neither well- grounded, nor logical, if the position opening and closing happens only on the basis of intuition. But complete ignore of emotions and feelings is also wrong. Sometimes, numerous stresses can bring to mental disorders; moreover, it is possible to lose general trading skills. The best way is to trace each emotion, and afterwards, check if there are still the reasons for this or that action.

Fact 5

All inexperienced traders are very concerned about their rightness, but the professionals accept emotions, though never let them overtake mind. Successive traders take notice not only of what can bring the profit, but also of what can prevent from it.

Conclusion:

It is very important always to be in course of events at the market, but one should also separate private life from trading. Big pressure causes psychological breakdown and physical fatigue. Professionals of trading always react fast to the current market events; it’s just a job for them, which brings yield.

Fact 6

Losing funds during the trade, the unsuccessful trader starts to buy new books or trading systems, starting to work according to their conception at once, but an experienced trader analyses what happened and corrects his methods in respect to the received data. A better trader does not start using a new system at once, but only when he realizes, that his old one deceives his expectations.

Conclusion:

Good traders always keep to their methods, usually using only a few trading strategies.

Fact 7

Traders, who have little experience of trading at market, sometimes try to copy the actions of the famous traders. Professionals at this time consider all strategies, including those of famous traders, but use the example only if it suits into their style of trading.

Conclusion:

The trader’s personality, his knowledge of the market and his personal trading system are much more important than the achievements of the great market speculators.

Fact 8

Often the traders with no trading experience at market do not notice many factors, which could bring them profit. The sum being in work defines the profit of every trader, which is realized by professionals. More money should come to Forex, than leave it, and this should be taken into account by every trader.

Conclusion:

All factors, which can influence the profit, should be taken into consideration during the trading.

Fact 9

Generally, all traders, who have just started working at Forex or who are constantly losing an opportunity to gain profit, take this too close to their hearts. While, more professional traders perceive it easily. The process of trading brings them pleasure, at the same time, they are taking it absolutely serious.

Conclusion:

Psychiatrists found out that the more serious a man is, the easier he is exposed to illnesses.

Sum up:

Successful traders as well as unlucky ones perceive trading at Forex as a kind of game.

If we compare trading to a game, a bowling for example, the beginning traders will understand, that strikes’ rate, which is achieved by professionals with no visible efforts, is a result of a long time spent outside the “big game”. Like in sport, trading accounts for a great number of inner and outer factors.

It is necessary to be serious about every conducted operation. The professional traders differ from novices in that the former follow a definite trading strategy; the latter take it as a game.

Added by Olga Vitkovskaya,
InstaForex Clients’ relationship manager