If you only have a little bit of money, say $25 with which you can day trade with, you're going to find it difficult. This is because pattern day traders only let you day trade with a minimum of $25. Your Forex broker will observe your trading activity and won't let you perform in trades that not permitted under the pattern day traders rule. The rule is applicable to stock options and stocks.
Risk Control
Forex market offer two qualities to help traders with risk control. Risk control is the chance to identify loss if the market isn't moving the way you want it to. If traders don't want to use other tools, stop-loss orders can be used to limit losses.
You probably already know all that. But a setback for some traders is that stop orders can be carried out at a lower price than the price you planned.
Here are 2 common circumstances when the above can occur:
Situation #1 is concerning market liquidity. If the market has poor liquidity, the price variation between executions could be major. This is evident in small volume security intraday charts: the price doesn't move in pattern, it leaps between levels. This can be harmful to your orders and is known as slippage. Slippage has bad influence on your entry and exit order.
Situation #2 is price gaps. Gaps occur in stocks when vital news is announced while the market is closed. Gaps are certain when news is released. A gap can also be good for your position, if the gap direction goes is in favour of your trade. But note that gaps lessen your risk control with stop-loss orders.
I've only discussed 2 of the possible benefits for traders of the Forex market, but there are many other benefits which I've not mentioned, from the commission free trading, to the minimal amount of money needed to open a trading account. These are just some of the reasons why Forex market constantly attracts new traders.
Risk Control
Forex market offer two qualities to help traders with risk control. Risk control is the chance to identify loss if the market isn't moving the way you want it to. If traders don't want to use other tools, stop-loss orders can be used to limit losses.
You probably already know all that. But a setback for some traders is that stop orders can be carried out at a lower price than the price you planned.
Here are 2 common circumstances when the above can occur:
Situation #1 is concerning market liquidity. If the market has poor liquidity, the price variation between executions could be major. This is evident in small volume security intraday charts: the price doesn't move in pattern, it leaps between levels. This can be harmful to your orders and is known as slippage. Slippage has bad influence on your entry and exit order.
Situation #2 is price gaps. Gaps occur in stocks when vital news is announced while the market is closed. Gaps are certain when news is released. A gap can also be good for your position, if the gap direction goes is in favour of your trade. But note that gaps lessen your risk control with stop-loss orders.
I've only discussed 2 of the possible benefits for traders of the Forex market, but there are many other benefits which I've not mentioned, from the commission free trading, to the minimal amount of money needed to open a trading account. These are just some of the reasons why Forex market constantly attracts new traders.
Tidak ada komentar:
Posting Komentar