Why Do Most Forex Traders Face Losses?

Forex traders are tend to face losses and this is not a new discovery for anyone. Traders are smart, self-confident, they have enough knowledge on the market but sometimes something goes wrong and causes them to lose their money. So what is that?

The answer is EMOTIONS!

Emotions are the inseparable part of human nature and they play a vital role in any decision that a person makes and it doesn’t matter whether these decisions are connected with personal or professional life.

In trading as well, emotions have a great impact on further steps and decisions of traders. Being able to keep emotions under control is not an easy task and it requires a lot of time of practice and effort.

The two main and the most “popular” emotions that have a negative influence on trading are fear and of course greed. I am pretty sure you all remember the old and famous Wall Street saying: “financial markets are driven by two powerful emotions – greed and fear”. These emotions make traders to deviate from their trading strategies and lose their trading self-control which can really be fatal.

Greed makes traders to over-trade and risk more than they can actually afford themselves and this in its turn leads to failure.

Fear is just the opposite of greed. It doesn’t allow traders to risk and take opportunities. It does not give traders the chance of trading properly and freely.

Actually, in order to be capable to control emotions one will need to develop discipline and a good trading strategy. A well-planned and well-developed discipline will help traders to think as objectively as possible. A trading strategy in its turn will help traders to realize when to enter and quit the market, how much money they can afford themselves to trade and of course to lose..:)))

To my mind, trading on demo accounts can be a great help for any trader, because demo accounts help to get acquainted with the problems, difficulties and awkward situations traders can come across while trading on real accounts.

Everything depends on a person and if you have made up your mind to take up trading or anything else then do not let your emotions interfere you. Be confident and believe in yourself.

Political uncertainty weighs on markets

US stocks fall for seven sessions in a row
US stocks ended lower on Wednesday with investor risk appetite undermined by heightened uncertainty about presidential election outcome. The Federal Reserve kept interest rates unchanged as widely expected. The dollar continued the slide: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, closed 0.38% lower at 97.364. The S&P 500 ended 0.7% lower settling at 2097.94 led by real estate shares. The Dow Jones industrial average slipped 0.4% to 17959.64, closing below the 18000 level for the first time since July. The Nasdaq dropped 0.9% to 5105.57.
The S&P 500 slid from nearly four-month lows on Tuesday, recording the longest losing streak of seven straight sessions since 2011, as the ABC News-Washington Post tracking poll showed Republican candidate Donald Trump gained a one-point lead over Democratic nominee Hillary Clinton. The Fed stated it chose not to hike rates and wait for some further evidence of further progress toward its objectives noting that “the case for an increase in the federal-funds rate has continued to strengthen”. In economic news data came in weaker than expected: private-sector employers added 147000 private sector jobs last month, less than the previous month and below the expected 165000 number, Automatic Data Processing reported. Today at 13:30 CET Initial Jobless Claims and Continuing Claims will be released, the tentative outlook is positive for dollar. At 14:45 CET October final Services PMI by Markit will come out, the outlook is neutral. At 15:00 CET October ISM Services PMI will be published, the outlook is positive. At the same time September Factory Orders are expected to come out steady at 0.2%. At 15:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.

Bank of England to leave policy unchanged
European stocks closed lower on Wednesday with investor confidence undermined by political uncertainty after Democratic candidate Clinton’s lead over Republican rival Trump narrowed and positive data and corporate reports failed to boost market sentiment. The euro and Pound continued to strengthen against the dollar. The Stoxx Europe 600 fell 1.1%. Germany’s DAX 30 dropped 1.5% to 10370.93. France’s CAC 40 lost 1.2% and UK’s FTSE 100 index closed 1% lower at 6845.42. Concerns about uncertainty in case Donald Trump wins the US presidential election outweighed positive economic reports: the German unemployment rate fell to a record low of 6% in October and the final euro-zone Manufacturing Purchasing Managers Index for October came in at 53.5, above the flash estimate of 53.3 and better than the 52.6 recorded in September. Today at 10:30 CET October Services and Composite PMIs will be released in UK. The outlook is negative for Pound. At 11:00 CET October Unemployment Rate for euro-zone will be published, the outlook is positive for euro. And at 13:00 CET Bank of England Rate Decision and Inflation Report will be published. No change in monetary policy is expected: the Official Bank Rate is expected to remain at 0.25% with asset purchases continuing at 435 billion Pounds annually. AT the same tome the ECB will publish its Economic Bulletin.

Chinese services sector continues expanding
Asian stocks are mixed today with cautious mood prevailing after polls showed Democratic candidate Hillary Clinton’s lead in polls over rival Trump narrowed. Chinese stocks are mixed despite a positive report the activity in China’s service sector expanded at a faster pace in October with the Caixin China services purchasing managers index rising to 52.4 in October from 52.0 in September. A reading above 50 indicates expansion while a reading below that points to a contraction. The Shanghai Composite Index is 0.8% higher while the Hong Kong’s Hang Seng index is 0.3% lower. Australia’s All Ordinaries Index ended 0.1% lower as the Australian dollar edged higher against the dollar. Japan’s markets are closed for a holiday.

Oil tumbles on record US inventories build
Oil futures prices are extending losses paring earlier gains today after militants in Nigeria's southern Niger Delta oil hub attacked a pipeline operated by the Nigerian National Petroleum Corporation on Wednesday. Prices fell to five week low yesterday after data showed US crude inventories soared more than 14 million barrels last week, the largest weekly build since the US Energy Information Administration started keeping records in 1982. January Brent crude fell 2.7% to $46.86 a barrel on Wednesday on London’s ICE Futures exchange.

The Best Trend Trading Strategy

Trend trading is one of the most popular and widely used trading strategies among traders. Trend trading is an effective method, which can help to generate profits by identifying and capturing the trend just after it has started and trying to get out of the trend as soon as possible after it reverses. Generally, many traders and investors prefer to trade the long term trends, because by this way they prevent themselves from being concerned about the day-to-day market volatility.  With trend trading investors have a unique opportunity to catch many intermediate and long term market movements and thus earn money. However, it should be noted, that Forex trend trading is not that easy as it may seem from the first sight. And before taking up trend trading, it is quite essential to have overall understanding about the market trends, because they are incredibly important to those who are trying to develop a trend trading strategy and earn money in the market. Now let us find out what trend is.

Forex trend is defined as the direction in which the market moves. As it is known Foreign Exchange market is very changeable and it does not move straightly. Its moves are described like zigzags, which resemble the subsequent waves with clear highs and lows. Accordingly, depending on the movement of those highs and lows, trend is divided into the following three types:

• Uptrend – when the price of an asset is moving upwards
• Downtrend – when the price of an asset is moving downwards
• Sideways – when the price of an asset keeps on fluctuating within a certain range.

As was mentioned above, the role of trend is significant, because when it comes to the development of the trend trading strategy, investors come across the following trading decisions: to go long or to buy, to go short or to sell and the last one to stay aside.In order words, depending on the type of a trend, an investor should develop a specific trend trading strategy.

When the market moves upwards it is preferable to use the buying strategy and when the market goes down it is advisable to use the selling strategy. However, when the market goes sideways, it would be better to stay aside and do nothing.

Now, you are familiar with the main trend trading strategies and it’s time to follow the trend, think carefully and make the right decision.

Top 5 luxurious car manufacturers in the world

The world is full of diverse and exciting cars, but there are unquestionably some that never break into the mainstream. Yes, they are luxurious cars! Actually, luxury cars are considered to be a comfortable and an expensive mode of transportation that is used around the world. For a car to be truly luxurious, it needs to be equipped with the latest technology for effortless performance, with a buttery-smooth ride and have a fantastic interior design and comfort. With the rapidly increasing demand of cars, tons of companies are emerging with the latest models and cutting-edge technologies embedded in manufacturing of cars. However, among these companies, only few are able to win the hearts of ours and present real luxury cars.  Now, let’s take a look at the 5 most popular car companies which constantly dominate in the list of the top luxury car manufacturers.

1.     Daimler AG

Daimler AG is one of the most popular and successful German automotive companies in the world. The company is headquartered in Stuttgart, Germany. The history of the company goes back to 1886, when the company’s founders, Gottlieb Daimler and Carl Benz, made history with the creation of the automobile. Daimler AG is one of the world’s leading manufacturer of premium cars, as well as commercial vehicles (buses, trucks, etc.). The company’s vehicle brands include Mercedes-Benz, Maybach and Smart (micro hybrid cars). Daimler manufactures commercial vehicles under brands such as Freightliner, Western Star, BharatBenz, Fuso, Setra and Thomas Built Buses. In addition to automobiles, Daimler AG provides financial services through its Daimler Financial Services.

2.     Ferrari N.V.

Incorporated in the Netherlands, Ferrari N.V. is an Italy-based company which is engaged in the design, manufacture and sales of sports cars under the Ferrari brand. In addition to sports cars, the company also provides financial services through Ferrari Financial Services. The company’s sports cars portfolio includes FF, Ferrari 488 GTB, F12berlinetta, 488 Spider, 458 Speciale, Ferrari California T, F12tdf and LaFerrari. Ferrari N.V. runs its operational structure in regional markets of Europe, Middle East, India and Africa, as well as the Americas, China and the rest of the Asia-Pacific region.

3.     Lamborghini

Automobili Lamborghini is an Italian brand and a manufacturer of luxurious sports cars. The company is headquartered in Sant’Agata Bolognese, in Northern Italy. Lamborghini is named after Ferruccio Lamborghini, who founded the company in 1963. Lamborghini used to be an independent company, however today it is a subsidiary of the German company Audi AG which became the owner of Lamborghini in 1998. 

4.     Bayerische Motoren Werke AG

Bayerische Motoren Werke AG, popularly known under its abbreviation BMW, is a global manufacturer and marketer of luxury automobiles, motorcycles and engines. The company was founded in 1917 and is headquartered in in Munich, Germany. In fact, in an era of rapid consolidation within the global car industry, BMW is one of the few independent companies in operation. The Bayerische Motoren Werke AG is also considered to be one of the world’s most well-known and best-selling luxury automakers.

5.     Tesla Motors Inc.

Tesla Motors Inc., also known as Tesla, is an American automaker, as well as a technology and design company with a focus on energy innovation. The company was founded in 2003 and is headquartered in Palo Alto, California. Tesla mainly manufactures and sells two electric vehicles: the Model S sedan (over 107,000 Model S have been delivered across the world) and the Model X sport utility vehicle (SUV). In addition to developing its own vehicles, Tesla also sells energy storage products. The company competes with such famous automakers as Mercedes, Daimler, BMW, Audi, Toyota, Volkswagen, Mitsubishi, Porsche, Lexus, Fiat, Nissan, Ford, Honda, Volvo and General Motors.

Which one is your preferred luxury car manufacturer in the world? 

Chances for Fed rate hike on Wednesday are below 10% and 75% for December

Successful traders: Warren Buffett’s Millionaires Club

Warren Buffett is probably the most influential and famous investor. He is ranked third in the list of the Forbes World's Billionaires of 2016. The irreplaceable chairman of one of the largest companies in the world Berkshire Hathaway began to trade stocks at the age of 11. At that period of time he bought three shares of Cities Service Preferred by paying $38 per share, then he sold them and earned $5. After a few days, the stocks of Cities Services increased 5 times. Since then, Buffett decided that he would never hurry. “The best time to sell a stock is never” – this became the main principle of his work.

The famous trader considers the purchase of Benjamin Graham’s book “Intelligent investor” to be the best investment of his life. After reading the book, he came to the idea that for achieving success one does not need to be a genius, since all s/he needs is to understand trading psychology: hold back emotions and develop a clear system for making decisions. Graham was Buffett’s teacher at the University in the District of Columbia, and later he offered Buffett a job in his company. After working two years, in 1957 Buffett opened his own investment company “Buffett Associates”, the shares of which rose by 250% over five years.

Since 1962, Buffett started to buy shares of a textile mill Berkshire Hathaway, which was in deep crisis at that period of time. By 1965, he became the majority shareholder and the head of the company. Under the leadership of Buffett, all the income of Berkshire Hathaway was directed to the purchase of securities and extension of company’s activity. Buffett paid dividends for his shares only once in 1967 and that was a dividend of 10 cents.

All the income of Berkshire Hathaway was invested in new investments. Buffett was greatly interested in insurance business. Currently, Berkshire Hathaway manages assets in various sectors of the economy: insurance, publishing business, wholesale and retail trade, electric and gas utilities, rail transport, etc. According to the Forbes Global 2000 list, Berkshire is the world’s fourth largest public company of 2016 and the first among American companies.

Warren Buffett’s Millionaires Club

Several hundred Americans, who believed in the future of Berkshire Hathaway and in the 1970s invested in the stocks of the company, are now millionaires.

Frank Fitzpatrick, a lawyer from Nevada, bought 200 shares of Berkshire Hathaway in 1976 paying $ 40 per share. By 1995, the stock prices rose to $25.000 and by selling his shares he was able to buy a house, leave a legacy to his children, and the rest of the funds transfer to charity.

Jim Halperin, an owner of a rare-coin auction company from Dallas, bought his first Berkshire shares in the middle of the 1990s for $30.000 per share. Now they are worth nearly $200.000 per share, and its package is worth $20 million.

Buffett has always stood out for his modesty and unpretentiousness. The billionaire lives in a house, which he bought in 1958 for just $31,500, drives a car and has breakfast in McDonald’s. Buffett is also famous for his large-scale philanthropy. In 2010, he transferred half of his fortune (nearly $37 billion) to five charitable foundations.

Currency trading

Currency trading started in the 1970s after the transition to the model of floating exchange rates adopted after the conclusion of the International Monetary Fund conference in Jamaica in January 1976. Theretofore, the exchange rates of national currencies were fixed by the government. Central banks of countries maintained the exchange rates of national currencies on the same level with the help of intervention allowing their changes only through devaluation and revaluation.

Currency markets, where takes place the process of exchange of one currency for another one, were formed due to the transition to floating exchange rates. The largest and most popular currency market is Forex. The participants of the Forex market are central banks of countries, commercial banks, hedge funds, investment and insurance companies, brokerage and dealer companies, etc.

The constant changes in the value of one currency or another based on their demand and supply are the basis for speculations on various currencies. Currency trading on the Forex market by individuals for the purpose of making money from the difference between Ask and Bid prices is carried out through intermediaries – brokerage and dealer companies.

Currency pairs

The main instruments of trading on the Forex market are currency pairs, where the first currency is considered to be a commodity and the second one - money. For example, if you decide to trade EURUSD, then for the purchase of euro, you will pay in dollars.

The US dollars and one of the major convertible currencies are presented in the most popular currency pairs:

• EURUSD (euro/US dollar);
• USDJPY (US dollar/Japanese yen);
• GBPUSD (British pound/US dollar);
• USDCHF (US dollar /Swiss franc);
• USD/CAD (US dollar/Canadian dollar);
• AUD/USD (Australian dollar/US dollar);
• NZD/USD (New Zealand dollar/US dollar).

These currency pairs together with cross-pairs (currency pairs without the US dollar, for example, EURGBP, EURJPY, GBPNZD, etc.) form the group of majors on the Forex market. Major currency pairs are considered to be the most liquid instruments, moreover, they also have high volatility, which allows to generate good cash of flow from trading.

Less liquid currency pairs, which are composed of the world’s main currencies paired with less liquid currencies are called minors, for example, EURHKD, EURSEK, USDHKD, USDNOK, USDSGD, and others.

Besides, the above listed pairs there also exist exotic currency pairs, the combinations of which are composed of one of the main currencies and a currency of the country with moderately developed or developing economy (for example, Czech crown, Polish zloty, Danish krone, Turkish lira, etc.).

The value of currencies of different countries depends on many factors, but the main ones are the state of the economy and political events in the country. These factors are the basis of the fundamental analysis of currency quotations. In the economy of each country take place important events, which indispensably influence the rate of the national currency. For example, the announcement of the European Central Bank interest rate immediately affects the rate of the euro which may lead to very high volatility in the market.

Besides fundamental analysis, there also exists technical analysis, which is based on the emergence of trends, support and resistance levels on the charts of currency pairs.

In order to start trading on the Foreign Exchange market, one needs a computer, an internet connection, initial capital and a right choice of the brokerage company. For successful trading on the Forex market, it is necessary to have fundamental knowledge about financial markets and trading experience.