Futures and Options Serving Intelligent Investors
- The most important is the long term trend, closely followed by the recent price action and picking your entry.
- Don’t let trading consume you. You can lose just as much money by trying too hard as trying too little.
- Hard work is key but quality work is even more so. You need to identify your weaknesses and work on improving them.
- On the whole, rising interest rates are bullish for a currency. Falling interest rates are bearish.
- Beware of countries with a current account deficit worse than -5%. They may not be far away from a full blown crisis.
- Don’t just study interest rates and yields, study the market and how it reacts to news. Know what other traders expect.
- Markets can stay irrational for long periods. It makes sense to go with the flow and don’t get stuck to just one idea.
- A strong economy should be bullish for a currency but not if inflation gets out of control.
- In the long term, current account deficits lead to currency depreciation, surpluses lead to appreciation.
- The carry trade allows traders to profit from interest rate dierentials which should narrow as time goes by.
- Don’t hold a position across a news release unless you know what you’re doing, especially when it’s a big event.
- If you don’t know what non-farm payrolls are, start learning about economics and how to trade the news.
- Central bank announcements and non-farm payrolls can have big effects on forex markets. Always be prepared.
- If market stress is coming along, head for safe haven currencies; the Japanese yen, US dollar or Swiss franc.
- Cut losses short and don’t be afraid to lose. It’s how much you make when you win that’s important.
- Learn one forex market inside out. Become an expert in your craft and keep it simple. That’s all you need to do. Be careful using pivots after an explosive trading day. The market will likely be quiet so look for smaller profits.
- Find your trading personality through study, practice and hard work. Not through trial and error.
- Technical indicators are watched by many. Price action patterns can oer unique setups for sharp traders.
- Don’t get overconfident when you have a big win. Stick to your trading strategy and don’t take reckless risks.
- Interest rates, employment and geopolitical events are the main factors to consider in fundamental analysis.
- In order to be comfortable in forex you need to be comfortable making money. There is no place for greed or fear.
- Trade with a broker that is regulated by a local/international authority. There are too many unregulated brokers out there – check reviews online to help you make your choice.
