Page 115 - Ultimate Guide to Currency Trading
P. 115

Larger Overall Assets

                 If you decide that you are the type of person who is willing to accept a higher risk in his currency
                 portfolio in exchange for a higher return, you will first need to see if this type of account is actually
                 possible. The main requirement for a high risk/high return currency portfolio is that you have a large
                 amount of investable assets. If you have a large amount of investable assets, then a currency account
                 that is amped up and tuned for high performance should be no problem. This is because your main
                 assets, such as your stock and bond portfolio, will be holding their own and providing a slow, steady,
                 and reliable return.

                        Since this is the case, the money you put into an FX account can be heavily traded and risked
                 often enough to squeeze out more returns than a more conservative portfolio. If you have a large base
                 of secure investments, you can set aside an amount for an FX portfolio. This currency portfolio can
                 consist of 20-25 percent of your overall portfolio. This 25 percent can be used to press hard, take risks,
                 and earn returns.

                        Many  financial  advisors  who  work  at  firms  that  specialize  in  high  net-worth  clients
                 recommend  having  some  money  set  aside  for  risk  taking.  This  money  is  often  put  into  a  separate
                 account,  and  is  used  to  trade  aggressively. If  you  desire,  you  can  turn  this  portion  of  your  overall
                 investable assets into a currency account.

                            Many people put money in an account to play with and to trade at will. This money is
                            often used to trade penny stocks, startup companies, and other forms of very risky stock
                            that have, a chance of earning high returns, but also a chance of becoming a loss. This
                            at-will trading pre-vents clients from touching their secure investment accounts.




                        You can use your currency account to trade aggressively and win big. Of course, in order to
                 trade aggressively, you will need to take more risks in proportion to the size of the account. A larger
                 account size will also allow you to sustain larger swings into and out of profit range. Since not all of
                 your trades will work out all of the time, a larger account will allow you to have a greater percentage
                 of your account that will be sitting in cash.

                        You can then trade aggressively with only 10 percent or 15 percent of the account assets. This
                 would leave 85-90 percent of the account available to soak up any reversals of fortune with your FX
                 trades without causing a mar-gin call. If you have 85 percent of your account in cash, this leaves a lot
                 of room for a trade to move into negative territory without the need for you to close out the trade. If
                 you have the cash in margin, you can allow time to work for you and wait in the trade for the price of
                 the pair to reverse. Once it reverses, you can then get out of the trade at a profit, or at the very least,
                 a breakeven.
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