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Understanding Forex - #5 - Compound Interest

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This is a series of articles on the foreign exchange market. You will learn here what Forex is, how it works and how profitable it can be. The entire series contains the following articles. . . What is Forex? Technical analysis Fundamental analysis Money management Compound interest Compound interest. As an investor, time can be your best friend once you learn how to use compound interest to your advantage. This is an important aspect of any trading system. Increasing your profits can make you very rich and help you increase your investment profits exponentially. The downside to this technique is that you may also increase your risk. By reinvesting your earnings you can multiply your profits but you can also suddenly lose everything. I will explain here how compounding can make you rich. I will also describe some of the risks involved. This strategy may be suitable for some investors, but not for all. It is more like a long-term strategy. Most traders or investors don't have the pa

Understanding Forex - #4 - Money Management

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Lihat Link This is a series of articles on the foreign exchange market. You will learn here what Forex is, how it works and how profitable it can be. The entire series contains the following articles. . . What is Forex? Technical analysis Fundamental analysis Money management Compound interest Money management. This is one of the most important aspects of a good trading system. Even if your market forecasts are accurate, you may still not be profitable in the long run unless you implement proper money management techniques. Money management refers to how you manage your trading capital. It has to do with how much money you invest in each trade. Also, how much do you expect to earn on each trade compared to how much you are risking. Furthermore, you can also use different types of orders that allow you to automatically manage your trades such as stop loss, limit order and trailing stop. In my opinion, the two most important aspects of money management are position sizing and expecta

Understanding Forex - #3 - Fundamental Analysis

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This is a series of articles on the foreign exchange market. You will learn here what Forex is, how it works and how profitable it can be. The entire series contains the following articles. . . What is Forex? Technical analysis Fundamental analysis Money management Compound interest Fundamental analysis. Forex fundamental analysis strategies consist of studying the economic factors of a country to predict the future value of its currency. This includes, but is not limited to: economic conditions, monetary policy, etc. Fundamental analysis focuses on studying the economic, social and political factors that drive supply and demand. Some important indicators are interest rates, inflation and unemployment. Political decisions are also important. Below are some of the most important fundamental analysis indicators and their definition. You can learn more about these indicators and how they are used at www.investopedia.com. Producer Price Index - PPI A family of indices that measures the ave

Understanding Forex - #2 - Technical Analysis

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This is a series of articles on the foreign exchange market. You will learn here what Forex is, how it works and how profitable it can be. The entire series contains the following articles. . . What is Forex? Technical analysis Fundamental analysis Money management Compound interest Technical analysis. Unless you are new to trading, you probably already know that technical analysis is a method of predicting the future price movement of commodities, stocks, etc. (in this case currencies) based on graph analysis, modeling, technical indicators, etc. technically and in my opinion it is quite predictable. No trading strategy will work 100% of the time. That's why you need proper money management techniques. Either way, technical analysis is important in determining where the price of currencies is going, including when to enter and exit positions. There are several technical analysis techniques that you can implement in your trading strategies. I show here how to use technical indicato

Understanding Forex - #1 - What is Forex?

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This is a series of articles on the foreign exchange market. You will learn here what Forex is, how it works and how profitable it can be. The entire series contains the following articles. . . What is Forex? Technical analysis Fundamental analysis Money management Compound interest What is Forex? The word Forex stands for The Forex Exchange Market. This is the most liquid market in the world where you can trade or exchange one currency for another. For example, if you think the euro will appreciate in value and you have US dollars, you can exchange dollars for euros. If you are right and the euro appreciates in relation to dollars, then you can close the position by making a profit. This is the idea behind the Spot Forex Market. This is an interbank system, which means it is not centralized. There is no central exchange where currencies are traded. It is a global market. You can trade Forex online 24 hours a day, 6 days a week. This market emerged in the early 1970s. The reason was t