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Stop Hunting with the Big Players
Thu, Jan 17 2008, 16:04 GMT
by The Forex Journal
This article is taken from the Forex Journal, a special edition by Trader’s Journal magazine in Nov 2007.
The author is Boris Schlossberg, who is the Senior Currency Strategist for Dailyfx.com. He is the co-author of Amazon’s #1 investing book Millionaire Traders – How Every Day People Beat Wall Street at its Own Game
- Boris Schlossberg shows how to exploit the ‘stop hunters’ in the Forex markets using a simple, mechanical method that only requires a price chart and one indicator
Foreign exchange is the most leveraged financial market in the world. In equities, standard margin is set at 2 to 1, which means that a trader must put up at least $50 cash to control $100 worth of stock. In options, the leverage increases to 10 to 1 with $10 controlling $100. In the futures markets, the leverage factor is increased to 20 to 1. For example, in a Dow Jones futures e-mini contract, a trader only needs $2,500 to control $50,000 worth of the index.
However, none of these markets approach the borrowing intensity of the Forex market where the default leverage at most dealers is set at 100 to 1 and can to as high as 200 to 1. This ratio means that a mere $50 in trading capital can control up to $10,000 worth of a currency.
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Other related articles:
- FX Markets get even more Attractive By Darrell Jobman
- How to Trade Forex using Fibonacci Price Relationships by Carolyn Boroden
- 3 Peaks and a Domed House by Larry Pesavento
- Three Steps To Short-Term Trading Success by Toni Turner
- Price and Time by Andy Bushak
- Using Non-Time Based Charts for Short-Term Forex Trading by Dr. John Clayburg
- Trading for Revenge: Control It or It Will Control You by Dr. Doug Hirschhorn
- How to Swim the Forex Ocean… and not get Eaten by Sharks by Kevin Davey
- Critical Forex Trader Decisions by Daniel Gramza
- Ranking Forex Markets by Ron Schelling
- The Globalization of Currency Trading by Dar Wong
- What You Don’t Know Can Hurt You by Ed Ponsi
- The Foreign Exchange Market by Peter Pontikis
Published on Mon, Jan 21 2008, 11:00 GMT
DPR International Pte Ltd
| One Raffles Place, OUB Centre #18-01, Singapore 048616
http://www.tradersjournal.com | editor@traders-journal.com
Legal disclaimer and risk disclosure
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the authors and the publisher are not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. In commodity trading, as in stock, and mutual fund trading, there can be no assurance of profit. Losses can and do occur. As with any investment, you should carefully consider your suitability to trade and your ability to bear the financial risk of losing your entire investment. It should not be assured that the methods, techniques, or indicators presented in this magazine will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in this magazine are for educational purposes only. This is not a solicitation for any order to buy and sell. The information contained herein has been obtained from sources believed to be reliable, but cannot be guaranteed as to accuracy of completeness, and is subject to change without notice. The risk of using any trading method rests with the user.Related reports
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