The purpose of engaging in foreign exchange is to anticipate price fluctuation for monetary gain. For this one must be willing to assume risk in exchange for profit. Many investors choose to enter the foreign exchange trading business for the following reasons:
*There is worldwide coverage of Social, Political and Economic news that influence exchange rates.
*The market offers 24 hours non-stop entry and exit opportunities.
*There is no ruling body. I.e., the market cannot be monopolized by any government, central bank or organization.
*There is no time limit to hold position(s).
*Instant execution of entry and exit orders. I.e., buy/sell can be done.
*immediately upon happening of any important incident that may affect the exchange rate and this help to maximize profits or minimize losses.
*Numerous strategies are available to protect position(s) against sudden adverse price fluctuations. eg, locking.
*The leverage facility allows investors to earn interest on the full contract value while using a relatively small deposit.
TRADING PRINCIPLES
Some of the most successful investors are wrong in their market opinion more often than they are right. The most important thing is when they are wrong, they accept losses quickly and willingly. But when they are right, they let their profit run and pyramid their profitable trading position(s) by increasing their open position(s).
Rules: Do not over trade. Always keep sufficient capital and hold some funds in reserve.
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