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    • Category: Investment Basics

    Enhancing your Account Balance with Proper Money Management

    Forex trading is a relatively easy activity to understand and perform. Despite this, it has caused countless financial losses over the years as a result of limited market knowledge, ill-executed trades, and poor money management.

    To become a long-term trader with a positive FX trading record you need to follow a certain number of steps to enhance your chances of augmenting your forex trading account balance. One of the first steps towards enhancing your forex trading account balance is to ensure that you select a reliable forex broker who upholds the strictest trading standards.

    Choosing the Right Forex Broker 

    Your chosen forex broker can help you enormously to enhance your account balance with proper money management. The first step in selecting a broker is to find someone who is reliable and have mostly positive reviews, as this ensures utmost protection of your funds under all circumstances.

    Another reason to carefully select a broker is to ensure that they offer superior trading tools and a complete range of forex trading services, including professional, around-the-clock support. With the right support, tools, and resources you will soon learn how to execute your trades in accordance with your level of risk and your goals as an online trader.

    Why trade forex with IMMFX?

    • Licensed broker
    • Low spreads
    • Full Hedging Capability
    • Swap Free Account
    • Deep liquidity
    • Safety of Funds

    Money Management Strategies

    Listed below are more forex trading money management strategies that should be followed to enhance your trading account balance…

    1. Use small lot size for greater flexibility and reduced risk
    2. Limit your use of leverage on the trading platform
    3. Use predetermined stop losses to control losses on a trade
    4.  Always follow your trading plan
    5. Seek forex trading opportunities where rewards go beyond risk

    Staying informed of the market 

    1. Attend conferences, seminars, and events, whether they are held locally or on the internet
    2. Network with other online traders
    3. Discuss ideas in forums and Forex blogs
    4. Read forex news, economic releases and financial reports
    5. Watch the latest forex news, market videos and headlines
    6. Teach a friend all about trading forex – it’s a great way to understand the market from a fresh perspective
    7. Test new FX trading strategies on a demo trading account to see which strategy generates the most profitable results

     

    What Factors Can Impact on the Forex Market?

    Forex markets typically deal with foreign exchange currencies. Like any other market, the currency market is also largely driven by and affected by the element of supply and demand. Many factors can have a strong impact on the Forex market. Some of the key factors are:

    Economic News

    This is one of the major economic factors that are capable of affecting the foreign exchange market. The impact of economic news is felt globally. If a country releases any important economic news at any time, it can have a positive or negative effect on the exchange rate of the country’s currency.

    Real Estate Information

    For any country, housing information is very important and can play a major role in the fluctuation of the foreign exchange rate. For instance, the US ministries release housing information of the country on a monthly basis that includes the information regarding houses that have been sold or those that are still under contract. The information regarding the increase in the inventory of houses can also be found on these releases. This information is extremely important as it indicates how the economy is currently performing. The growth and good performance of the real estate market act as an indication that the economy is performing well too. This plays a major part in determining the Forex rates.

    Investors

    Investors are strong players in the economy. Their beliefs and actions can swing the Forex market completely. If the investors are of the opinion that the dollar is performing well, the value of the dollar will grow positively in relation to other currencies while trading Forex. In case they are not very optimistic about the dollar, its value will dip in comparison to other currencies in the Forex market.

    Trade

    Importers in many nations import goods and services that they require from other countries. To pay them, they need to buy the currency of the country selling them the goods. This will keep the currency of the selling country in demand. Those countries that have a surplus of trade and can export their excess goods and services will always have a stronger currency in relation to those countries that have trade deficits.

    Level of Risk Acceptance

    People in different countries have a very distinct attitude towards risk. Some are risk-averse while others are very accommodating of risky situations. When countries are trapped in uncertain scenarios, people in risk-averse countries would move towards safer investment options like government bonds, etc. This creates great fluctuation in the currency rates of a country.

    Political Stability

    Political stability is yet another factor that can have a great impact on a country’s currency exchange rate. If a country is undergoing political turmoil or is facing political instability, the Forex market will be significantly affected by such events. For instance, if a country’s government changes, the currency of the country will be affected as well. Also, the currency of the neighboring countries, as well as the countries that are in business with the respective country, will be affected.