Archive for January, 2009
Two important concepts to understand about trading around news releases
There are two important concepts that you must understand if you’re even thinking about trading around news releases: Price slippage or skipping, and also the typical manner in which prices fluctuate in the first hour after a news release. Price slippage is important to understand, and it’s something that has probably caused many premature wrinkles on the faces of forex traders.
Within one minute after important economic data is released, these are the times where there are the highest amounts of trading activity and the biggest price moves. Knowing this, the concept of price slippage is easy to understand:
Most forex trading platforms have very fast order execution, meaning that once you click on the ‘buy’ or ’sell’ button your order will be filled within one or two seconds. Price swings are so volatile around the news release times, however, that there might be very large price jumps in just a few seconds, meaning that the price could skip from 1.2100 to 1.2115 and never even hit the values in between.
So if you were to place a market order right as this was happening, and it had to take two seconds before the order was filled, due to these rapid price jumps you could enter the market 30 pips away from where you intended to! This is certainly not good, and it can actually have the effect of causing massive gains or losses in the window of just a few seconds. Rapid price jumps most often occur within a 15 minute window of the release of significant economic data.
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Online Forex Trading – A Hidden Goldmine
from youtube
Forex trading has become the number one technique real experts use to earn thousands of dollars on the internet. Even though this virtual goldmine is used by experts, you don’t have to be an expert to start earning thousands per week just by trading simple currencies. Moreover, getting started with Forex is easy, just follow these simple steps & your trading account will be growing in no time.
The first, and arguably most important step, is to select a broker. When selecting a broker you want to be sure that the broker offers a practice account, mini & even micro accounts, 24/7 customer service & quality market & trend news feeds. Once you’ve chosen your broker, you’re on to the next step.
The second step is to make a deposit. Making a deposit is simple yet it can be confusing for a new trader to decide how much to deposit into the account. Its recommended to start with a small amount(preferably $300 or less). When starting with a small amount, you can learn to manage low risk trades and test out signal services.
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