Page 163 - Ultimate Guide to Currency Trading

having a reasonable expectation of what to expect in the movement of the trades. You will most likely

place orders that are too big; once the FX pair begins to move it will do five times as fast as in a 10:1
account! Barn! A blow out and a margin call.

The only way to prevent this is to set your margin at the beginning of your currency trading
career and leave it at that. Don't change it once you have started with a particular ratio.

Most of this book has been written with the assumption that you will be trading at
50:1 margin ratio. Even though this is ratio is five times as high as a more conservative
ALERT ratio of 10:1, you can build the size of your overall used margin amount to be a very
conservative number, therefore limiting your risk.

Using a lesser ratio means you will have to commit greater amounts of margin to a trade to
gain the same amount. There is no winning at this, so your best bet is to learn on one ratio and stick
with it. 50:1 is fine if that is what you get used to, and that is what you are learning to trade. A margin
of 10:1 isn't any safer than one of 25:1 or 50:1 if you are not fully trained in its movements, both up
and down.

Developing the FX-Trading Lifestyle
The FX-trading lifestyle is one to be admired. You can develop your own version of this lifestyle by

bringing to it what you find important. If you would like to earn a bit of money by trading part-time,
you could spend your free time reading reports and websites. You could look at your technical charts

every time you have a chance, even if this chance is every three or four days when the kids are at the
sitters. You could look for setups after dinner and wake to find fulfilled orders in the morning. You

could check your profits and close out your trades via your smart phone or iPad while in the park,
riding the train, or eating lunch at your desk at your day job.

The choice is yours; it is up to you to make currency trading work for you. If your lifestyle and
money situation is such that you would rather spend time developing skill and technique, then open a

demo account and trade away. There are stories of currency traders who had traded in the past, but
decided to trade only in demo accounts for an entire year. This might work for them because of a

preoccupation with another facet in their lives, lack of investable (or risk) funds or during times of
extreme market unrest. Whatever the reason, these traders is still practicing their craft of FX trading.

They are developing skills over time, and allowing the pressure to be off while they are learning.
Perhaps they are following the markets very closely; they might check the currency prices several