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Advantages and disadvantages of the Forex transaction copying service
What is copying deals: how to use the service, how copying deals differs from forex investing, how to profit from copying deals.
Today, there are many alternative methods of trading on the Forex currency market. One of these methods is copying trades of successful traders using special software. Services for copying transactions in the foreign exchange market are quite popular and more transparent than trading using forex advisors. Let’s try to evaluate the pros and cons of the transaction copy service.
Benefits of Copying Forex Trades
Each trader has his own requirements. In accordance with them, the Forex transaction copy service provides him with the opportunity to choose a trading strategy that will satisfy him as much as possible.
Trading results for the strategy chosen by the trader can be seen before joining the transaction copy service. Compared to the Forex robots service, the transaction copy service makes it possible to see a daily update of your performance indicators.
Based on the data provided, the trader can obtain information about trading instruments, the number of profitable and unprofitable transactions, the duration of transactions, the maximum value drawdowns And so on. After analyzing the parameters of interest to him, the trader can reasonably make a choice of a trading strategy.
The service of copying deals, which is very important, eliminates the emotional component, saving the trader from worries about the correct or erroneous entry into the market. Trading using the transaction copying service does not depend on whether the terminal of the client who has joined the service is turned on.
A very important feature of the transaction copy service is the possibility of parallel trading and managing already opened transactions. Nothing prevents you from closing a deal manually if you are afraid of losing your profit, or opening a new deal if there is a clear signal to enter the market. Along with this, it is worthwhile to understand that by making your own adjustments, you can violate the trading tactics that the managing trader adheres to, which, perhaps, will be critical for the client.
Disadvantages of the copy transaction service
The market situation is constantly changing, therefore, simply joining the service of copying transactions and simply regularly taking profits will not work. It is necessary to constantly monitor the dynamics of what is happening in the market. In this sense, copying deals is not a complete investment. Control over your account is carried out only by the client, “manager” trader he doesn’t care. Therefore, it is necessary to constantly monitor the market situation and the state of your account.
The trading results are quite relative, as they are true for a certain account (the account of the managing trader). Therefore, it is very important to correctly determine the parameters for copying transactions depending on the ratio of deposits, leverage, etc.
The very expression “managing trader” is used by us for convenience and is essentially incorrect, since the trader trades exclusively on his account and his own money, and the client, using the service, automatically copies his transactions to his account. The “managing” trader often does not even know how many client accounts copy his transactions.
From here two conclusions follow at once. The first is that the “managing” trader does not bear any responsibility in case of loss of any funds by the client, unlike the managing director PAMM Account. The second – a few losing trades on the deposit of the “managing” trader can be a small drawdown, while a smaller client deposit will simply cease to exist.
In conclusion, for the sake of completeness, it is worth highlighting the clear difference between the PAMM-account service and the Forex transaction copy service. If PAMM is an investment in the Forex currency market, when a client entrusts his funds to a PAMM-account manager, with all the ensuing consequences, the transaction copy service is the opening of transactions similar to those opened by the trader selected by the client on his deposit and is not an investment , which does not prevent him from having high popularity among alternative methods of trading in the Forex currency market.
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XM is broker with great bonuses and promotions. Currently we are loving its $30 no deposit bonus and deposit bonus up to $5000. Add to this the fact that it’s EU-regulated and there’s nothing more you can ask for.
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FxChoice is a IFSC regulated forex broker, serving clients from all over the world. It offers premium trading conditions, including high leverage, low spreads and no hedging, scalping and FIFO restrictions.
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3 Causes of Failure to Obtain Foreign Exchange Trading Targets
Possibly I’ve revealed it typically sufficient by means of writing or seminars, webinars, or workshops that I result in that what issues most to an Online Trader will not be the end result, however the course of.
OK, it’d sound too idealistic, however, prefer it or not that is the purpose. As a result of within the course of, an Online Trader should have no less than sufficient information and self-discipline. A disciplined and skilled Online Trader can simply anticipate any market actions that aren’t according to his expectations. Without these staple items, it’s unattainable for an individual to all of the sudden change into a reliable Online Trader. Data, expertise, and self-discipline require a course of.
Extra essential is the method of creating trading choices. An Online Trader doesn’t decide by calculating the variety of buttons on his shirt. Not primarily based on the zodiac prediction. Neither is it primarily based on emotions.
Based mostly on expertise, too, I can discover that there are lots of elements that may trigger an Online Trader to fail in reaching his targets in Foreign Exchange trading. Three of them are the next:
Do not have a transparent trading plan
Please set the goal as excessive as you need, however, keep in mind that targets without clear planning are identical as goals.
Make targets primarily based on a well-planned trading plan. The extra detailed your trading plan, the higher. Enter particulars equivalent to danger limitation per transaction, the technique/trading system used, to the technique within the type of danger Management instruments that you’ll use (reduce loss, switching, averaging and so forth).
Not operating a trading plan properly
Many traders are so excited when making ready a trading plan however are slack when implementing it. Lastly, the trading plan that he made was solely a “monument” whose destiny was just like the decision of his new 12 months he made with enthusiasm in direction of the top of the 12 months however lastly forgotten.
So, after you’ve got compiled a trading plan, do it with the self-discipline even to the “small” issues. Don’t make the slightest violation of your trading plan as a result of it’s going to change into behavior and in flip, you’ll change into more and more permissive in denying the trading plan, so you may be accustomed to committing violations which can be deadly.
For instance, an Online Trader has decided that the danger per transaction should not be greater than 10% of his capital. Suppose he has a capital of $ 1,000, the danger for every transaction he does should not exceed $ 100.
One time he noticed a trading signal primarily based on the system he had. With the place measurement calculation, say it ought to solely open 0.1
One of many the reason why danger must be restricted is to keep away from too massive a danger. When the Trader decides to open a transaction of 0.5
This conduct tends to be repetitive and when the Trader realizes his mistake, it’s normally too late. The top has come.
Not used to creating trading journals
That is probably the most continuously ignored Online Trader. It’s best to document all the things that are associated with the transaction you’re doing. It’s best to make this document each time you make a transaction.
You possibly can fill in your journal equivalent to this:
When the transaction is closed, additionally word the outcomes (profit or loss, no want for particulars till the quantity of profit/loss is already in Account Historical past). Additionally, the word that may trigger your transaction to finish profit or loss.
A journal like this can actually show you how to in evaluating your trading outcomes. In case your whole transaction makes a profit, you simply repeat what you do. Conversely, if the outcomes lose, you’ll be able to know what causes the loss with the intention to keep away from it later.
Forex transaction types
Are you thinking of investing in the fx market? Do you know its various types? Well, as a beginner, you may not be aware of the different types of transactions involved in the market, but to come out as a successful trader, it is our duty to let you inform about types of transaction in forex market.
Every one of us practicing trading business knows it well that fx means switching of one currency to another for an exchange rate. But only a few people know that a number of complicated transaction processes involved in the trading market other than just swap.
When you have made up your mind to invest in the fx business, learning about forex transaction types can be of huge advantage. This will allow you to get a wealth of trading options that can increase your chances of making a profit and minimizes the risks of loss. So let’s start with the types of first –
Forex transaction types – a brief report
If you have ever visited a foreign country for travel or business purposes, you must have used cash to buy euros, dollar, yen or any other local currency. The price you paid for buying a currency is called the currency exchange rate.
However, the price or the exchange rate will not remain static. It changes from time to time, especially in respect of the demand of one currency in exchange of another. The demand for currency also gets affected by different factors such recession, the economy of the country, inflation and so on.
Most of the business organizations and financial institutions aim at protecting themselves from the financial loss which may occur due to currency exchange. The forward contract is an effective way of doing this where forward contracts are treated as future contracts that ensure traded security. In this type of contract, one party agrees to sell future currency to the other party at the pre-determined exchange rate.
Futures contracts are quite similar to forward contracts except few differences. While a forward contract is specifically designed for the clients based on their current trading situations, a future contract only includes maturity dates and contract size. These future contracts are exchanged only in terms of standard exchange. In a forward contract, the margin is not required whereas; in future contracts margin is required for all traders operating in the future market of trading.
To define swap transaction in forex market , let’s cite an example here – Suppose you have recently shifted your business to Europe and you need euros for continuing your business operations. But you have only dollars that you don’t want to convert in Euros for the fear of facing the loss of money if the market goes in a reverse direction.
Under such a situation, what comes as the best solution? Simple, a currency swap offers the ultimate solution to deal such a situation where you can borrow euros from a currency dealer and lend your dollars. You can continue this process for a specific period. After that, you have to return the Euros and get back your dollars at the pre-set exchange rate.
Fx option is quite like other contracts where traders pay premium amounts for buying or selling trades at a staggering price rate. If the rate of exchange moves in favor the trader before this fx option expires, he or she can earn maximum profit. Similarly, if the exchange rate does not go in favor of the trader and this fx option expires, the trader may incur a loss.
Hope you all get a brief idea about various forex transaction types, and now you can start trading in the market that yields maximum profit in less possible time.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.
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