Forex Trading Education - Risk Management 101

Many retail traders focus so much on trying to make money off the market that they often neglect to protect their capital. This causes them to ultimately wipe out their trading accounts no matter how good their 'money-making' strategy is.

You see, there are two aspects to profitable trading: increasing your gains, and reducing your losses. Unfortunately the former is the only thing most traders pay attention to. Protecting one's losses is not as sexy or exciting as making money; and so many amateur traders make the crucial mistake of having a weak money management system in place.

How Much To Risk

When planning out your money management strategy, the first thing you'll need to decide is how much of your capital you are willing to risk per trade. Experts generally recommend that you risk no more than 2% of your total equity.

An Example

When trading with standard lots, each pip is worth approximately $10.

So let's say you start trading with $10,000. 2% of $10,000 is $200. That means that you should risk no more than $200 (or 2% of your capital) per trade. And since each pip is worth $10, you can risk a maximum of 20 pips ($200/$10) for each trade that you take. Essentially, this means that you should have a stop-loss of no more than 20 pips away from your entry price.

Does this make sense?

Adjustments Needed

Of course, a 20 pip stop-loss level might be considered too tight for many traders. In reality, it's up to you to play around with the variables of your money management system. For scalpers for example, a 20 pip stop-loss level might even be too high!

It all boils down to your overall trading strategy... a swing trader will definitely want to use a higher stop-loss allowance, and he can do so by either increasing his equity capital, or by trading using mini lots instead.

The bottom line however, is to never violate the 2%-capital-risk-per-trade rule.

To learn more, download my free 26-page guide here: Forex Trading Traps!

Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading information and resources.

AP - Mortgage rates fell for the second day in a row Wednesday, and could be heading toward levels home buyers and owners haven't seen this year.

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How Does the Forex Tracer Work? Does the Automated Trading System Work?

There isn't much other stuff that is far more confusing than the Currency Trading Market which is also known as Forex. I used to see all the infomercials on TV and all I could see were those complicated charts and some regular people talking about how they made money through it. At first, like any other person, I though it was a scam. But after some research, I found that it was actually a legit option to make some cash.

When I first started I didn't know what to do. There were all these weird shaped things and waves on screen that made me even more confused. So I decided to do some more research on trading currencies and then learned about Metatrader 4 which is the most used platform. Then a huge hype surrounding an expert advisor module called the Forex tracer began. So I asked some people, "how does the Forex Tracer work?" and what I learned was that it basically does all the calculating by itself and then figures out the best trade that you should take next.

How does the Forex Tracer work exactly? It approximates your next best trade and actually does the trading automatically. You don't even have to be there for it to function. It also eliminates the tedious technical analysis and the best bit is you don't have to pay it any salary nor does it need any breaks. So you definitely maximize your profits and you get more time for yourself because you don't have to be in front of the computer all the time trying to find the best possible trades. This forex automated trading system really does work!

Do you want the very best forex trading robot? Well I have some good news for you, I bought and tested the top 7 forex software's and put a review of the top 2 on my website: ForexTradingReview.Info I made over 900 dollars a day with one of the softwares listed on that site. Just Imagine if you purchase a couple of profitable softwares!

You have to be very careful when purchasing a software though. Some of the software's just sit around and never make you any money. If you want to make thousands every week with forex I suggest you take a look at the website: Forex Trading Review

AP - Precious metals and agriculture futures advanced Friday, getting a boost from a short-lived afternoon rally on Wall Street and the potential for an additional interest rate cut. Energy prices, meanwhile, slumped due to ongoing concerns over demand.

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What You Need to Know Before You Even Start Trading

Determine Your Risk Tolerance

Risk tolerance differs for every person. Your stock analyst and broker know this quite well and they will help you assess your risk tolerance, making sure that your investments do not surpass your risk tolerance.

Risk tolerance is determined by considering various factors, like how much money can you afford or allocate to invest, and what your long-term financial objectives are.

Let's take an example. Consider that you aim to retire in the next ten years and have no savings yet. In such a case, you have to have a large risk tolerance so that you can fulfill your aim of retiring.

In case you are twenty as of now and plan to start investing for your retirement, then you can do with a lower risk tolerance.

One simple thing has to be noted that how you feel or how much risk you feel in the investment is in no way related to your risk tolerance related to your long-term financial objectives.
For instance, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do?
Now, having invested in stocks, if you observe that the stock prices are dropping a bit, what can you do?

You might sell out if you have a low risk tolerance or let your money ride and wait patiently for things to improve. This risk tolerance, though, is based on how you feel about your money and not on your financial objectives.

Any good stock analyst or an expert stock broker can easily help you figure out your investment risk tolerance, and they will guide you on investing correctly, as per your case.

To put it shortly, your risk tolerance has to relate with your long-term financial objectives and also with how you feel about investing your hard earned money.

Dr. Joshua Geralds is a successful Investment Specialist with over twenty years experience increasing the income of people world wide. For a limited time get his free Money Management to a Million Dollars e-course here: http://www.pipsalot.com

Reuters - Power producer NRG Energy Inc on Sunday rejected an unsolicited $6.08 billion takeover offer from utility owner Exelon Corp , saying the offer "significantly undervalues" the company.

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Hedge Funds - Saviors For Delinquent Mortgages

The mortgage and banking sectors are facing different challenges. The slowing deposits, interest earnings, operational revenues and rising costs are posing threats to the overall existence of such lenders. Thus, expect that mortgaged homes and foreclosed properties are not usually retained by the banks. So where do the assets go?

Do not be surprised to find out that hedge funds are into buying mortgage assets. For the past years, hedge funds have tried to stay away from mortgages. However, because banks and mortgage lenders are finding it hard to keep up with the times, the funds saw a lining of lucrative opportunity. Thus, hedge funds are considered saviors and redeemers of the mortgage industry.

Different hedge funds have been actively buying out numerous foreclosed properties and distressed loans. The funds' ultimate goal is always to earn income and profit from the woes of mortgage lenders and banks. These days when home prices and valuations fall, hedge fund's foray into mortgage is a very overwhelming welcome note.

Most hedge funds that get involved in mortgages claim that they are doing better and more effective jobs than lenders and investors. Hedge funds are not always all about huge interest rates. At time, they also modify mortgages to that borrowers can easily afford regaining ownership.

The truth is, hedge funds are comparatively easier to deal with than mortgage lenders and banks. That may be because such transactions are not the focus of hedge funds. Usually, such loans are not as big and as significant as the usual transactions handled and covered by hedge funds. The businesses are also almost always open to having special and compromising agreements with the borrower. Some borrowers prefer if their mortgage will be turned over and transferred to hedge funds.

However, there is one confession by hedge funds. Usually, up to two-thirds to a half of the mortgage loans transferred to them cannot and would be hard to redeem anymore. Foreclosures are almost always immediately sold and disposed so the hedge fund can instantly cash in on investment returns. For mortgages, if a borrower could not really settle, the hedge fund will easily and politely ask to takeover the asset.

As proof is its humanity, hedge funds have also committed itself to restructuring. Thus, the risk and tediousness of court hearings can be prevented. The borrower can negotiate and ask to restructure the loan. Restructuring is a special arrangement wherein the lender and the borrower both agrees to meet halfway so the payment of loan can be effectively facilitated. Hedge funds are also open to accepting restructuring deals and proposals.

If you are a borrower and your mortgage of foreclosed property is already turned over to a hedge fund, you should settle at once. The valuation of your loan may be directly linked with the current valuation of the real estate asset. Because of this, many properties end up being fully foreclosed and sold to the market in return. Hedge funds are really heroes of the mortgage industry.

Julia Vakulenko is a licensed broker associate with Tampa4U.com Realty. She has one of the hardest working Tampa Real Estate team in Florida.

Reuters - NEW YORK (Reuters) -Stocks plummeted on Wednesday, a day after Barack Obama's historic victory in the U.S. presidential election, as a fresh batch of dismal economic data underscored the massive challenges awaiting his administration.

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Best Forex Trading Software

The best Forex trading software on the market is the Forex Killer and I want to talk about it. When it first came out it was looked at with a lot of criticism, not because of its quality, but from other products on the market that turned out to be duds. Even with the criticism at the start, the greatness of this product prevailed, even appearing on CNN.

A great feature of this software is that it is an independent program, meaning it doesn't use it's own special date feeds. You can manually add your own and use that. It is very easy to import such data as SignalSoftware, DealBook360, and MetaTrader4.

When you first start using this software leave all the settings as default, especially if you're new to Forex. The software is very useful, it's just like anything, you need to learn how to use it properly. If you add in an extensive leverage value, you may find that your currency has already been traded off by the time it turns around and becomes profitable for you.

Lastly, from my own person use with this software, I've had more profitable trades with up and coming currencies. For example I had a good run with the Canadian dollar that has rose from 63 cents US to parity with the US dollar. I've also had great success with the Japanese Yen that is continuing to climb against the US dollar.

I've had to say the best Forex trading software that I use is the Forex Killer. It will help you process the enormous amount of data that comes with currency trading.

The automated software of Forex Killer will give you an immediate edge in the market. Make trades that work for your profit line. For more information on the Forex Killer software, check out Forex Charting Software.

Reuters - Internet search leaders Yahoo and Google have given the Justice Department a revised version of their search advertising partnership in hopes of winning antitrust approval, the Wall Street Journal said on Monday.

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Currency Trading Education Tips

I wanted to take the time to share with you some of my currency trading education tips. This will help you learn the important parts of this business a lot better. Knowing the basics just isn't good enough. It's often the little things that make up the trader and make them a good trader. Too many people end up losing a fortune of money because they're just not prepared for the little things. I've been trading a long time now and I learned a lot about what it takes to be successful at this. I'm going to share a little of what I've learned during that time.

Everything you'll learn in a typical currency trading education course or book is for an ideal state. The "perfect" scenario. It doesn't exist and that makes a lot of the training completely idealistic. Most things will work on a regular calm day. I think an important skill to get down is identifying with things will get chaotic and volatile. I found the regular news was good enough for that. If you watch it, they'll talk about economic information, which is typically announced at a scheduled time. If there is an announcement coming up about the Federal Reserve interest rates at 2pm, that means the markets will be quiet up until that point and at 2pm it will go volatile. You'll want to avoid these times.

Having software is an important part of properly competing in this market. You're going to be going up against big firms and banks that have a staff to work the market 24hrs a day. You on the other hand are an individual. By having software it can automatically watch the market and make profitable trades at all hours of the day.

The 10 Minute Forex Wealth Builder is an excellent automated software tool that is unique because it only requires 10 minutes of your time to set it up for the day.

Learn more at the 10 Minute Forex Wealth Builder Review.

Reuters - British Prime Minister Gordon Brown said on Sunday he expected Saudi Arabia to pump money into the International Monetary Fund, the latest salvo in an ongoing effort to contain the global financial crisis that is also expected to bring a new round of rate cuts this week.

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