Thursday, February 5, 2009

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<h2 class = 'uawtitle'>Forex Trading- Money Management</h2><div style='font-style:italic;' class='uawbyline'>by fxreport</div><div class='uawarticle'><br />Money management in the Forex market requires educating yourself in a variety of financial areas in order for you to become a successful trader. The reason that you need to have great money management skills is because of factors such as the stability of the economy of a country, the gross national product, the gross domestic product, inflation, interest rates, and such obvious factors as domestic security and foreign relations come into play. So there are many things that can affect the price of a particular currency.<br />
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Throughout the world there are 5 major forex exchange markets, New York, London, Frankfurt, Paris, Tokyo and Zurich. Forex trading occurs 24 hours per day 6 days per week, for example when Asia stops trading the European markets open, so on and so forth.<br />
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The largest trading markets in the world are the Forex Markets and they turnover in excess of $2 trillion dollars every day. In order to be successful forex trader you need to have good money management skills and an excellent understanding of the bid/ask price.<br />
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So what it is the bid/ask price? The easiest explanation is the bid ask spread is the difference between the price at which something is offered for sale and the price that it is actually purchased for. Many of today's forex traders trade on margin which can vary depending on the Forex Broker from 1;50 to 1:400. Trading on margin is buying and selling assets that are worth more than the money in your account. Since currency exchange rates on any given day are usually less than two percent, forex trading is done with a small margin. To use an example, with a one percent margin a trader can trade up to $250,000 even if he only has $5,000 in his account. This means the trade has leverage of 50 to one. This amount of leverage allows a trader to make good profits very quickly. Of course, with the chance of high profits also comes high risk. So you must make sure that when you are trading that you have stop losses in place.<br />
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Finding a Great Forex Broker that offers great leverage, guaranteed stop losses can be quiet difficult, so the <a href="http://www.cfdfxreport.com"> CFD FX REPORT</a> has recently reviewed all the Forex Brokers and have come up with who they believe to be the best. For more information feel free to visit them.<br />
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As with many other speculative investments the real key is money management and you should always make sure that you only trade with money that you can afford to lose. While with a great system the chances of you winning can be high you should also be aware that you can lose. So making sure you have good rules such as never investing more than 10% of your capital, always use stop losses are all things that will improve your chances of becoming a successful forex trader. <br />
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Also to become a more successful trader you should ensure that you have the right knowledge and education, the <a href="http://www.cfdfxreport.com/index.php?option=com_content&task=view&id=22&Itemid=68"> Best Forex Broker</a> offers free educational lessons to help you become a more successful trader.</div><div class='uawresource'><div style='font-style:italic;' class='uawabout'><br />
About the Author:<br />
</div><div class='uawlinks'><a href="http://www.cfdfxreport.com">CFD FX REPORT</a> offers Forex Traders a host of Free educational lessons, online Forex and CFD Trading Forums as well as helping traders find the Best Forex Broker and CFD Broker in the market </div><br />
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