Tag: dollar

The Popular Stop-Loss Strategy

Stop-loss strategy will make it so that you won’t lose more than the amount that was previously decided, and they will do this for you. Increasing your knowledge of these stop-loss tactics can help you trade in a more effective manner.

The market is subject to rapid fluctuations in both directions. You can have a day in which you make a significant profit, but then you might have a day in which you suffer a loss. Everyone enjoys making a profit, even if it’s only a few dollars here and there. Losses, on the other hand, are something that should be avoided at all costs. Because incurring losses is an inherent aspect of trading the markets, it is possible to use certain strategy in order to limit the extent of those losses and shield oneself from suffering catastrophic losses.

On the orders, stop-loss points are positioned, and these points serve as the deciding point of departure. There are many different kinds of stop-loss orders, and each one may be customized to meet the requirements of a particular strategy. These orders are known as Market orders with stop losses, stop limits, stop markets, and trailing stops respectively.

When placing a market order, the best available price at the time of the order is used. This order is one of the most classic types of stop-loss orders, and it is executed immediately with a stop-loss price that has been specified in advance. When it comes to orders of this kind, the element of time pressure is quite important.

An order to purchase or sell a currency pair is referred to as a stop-limit order when the characteristics of a stop order and those of a limit order are combined. An order with a stop price and a limit price automatically converts into a limit order once the stop price is achieved and will be executed at the stated price (or better).

A stop market order is a specific kind of stop-loss order that puts a cap on the total amount of cash that a trader may stand to lose on any one transaction. It may be either an order to buy or sell, and it will not take effect until the price of that currency on the market reaches the level that was set. If the market is unpredictable, this may be a very good choice for you to make.

In day trading, a trailing stop loss is a form of order that enables you to limit the maximum dollar amount or percentage of loss that you can sustain from a particular transaction. If the price of the underlying asset changes in your desired direction, the stop price will adjust accordingly.

The stop will remain in effect even if the price of the security moves in the opposite direction of what you had anticipated. Traders often use the Moving Average stop strategy and the Average True Range stop strategy because they are the two most effective methods for trailing stop losses and because they are quite popular.

The Average True Range (ATR) stop loss strategy is well-known for its flexibility in an environment characterized by high levels of volatility as well as its ability to provide the greatest outcomes. When putting the approach into action, different values of ATRs are used based on the period of the chart that is being monitored. Because this method is automated, it is not necessary for you to always keep an eye on the trade chart.

Moving averages are somewhat comparable to ATR; the primary distinction between the two lies in the fact that moving averages do not display numerous values on the trading chart. Using this trading strategy, the trader will be able to position two stops, one above and one below the moving average. Moving averages may be broken down into a variety of subcategories, each of which is characterized by a unique level of operational complexity. It would be helpful for the traders to have a comprehensive grasp of the tactics and practice using them using a demo account. This would help to limit the losses that are incurred.

October 7, 2021
McConnell offers to raise the debt ceiling

The upliftment of the debt ceiling has been a major concern in the past few days in the financial markets all over the world. The arguments between the democrats and republicans were being stretched and on Wednesday, McConnell offered that the country can extend the debt limit instead of demolishing it.

President Joe Biden had previously asked the republicans to move out of the way of the progress of the country and to let them do their job by saving the country from defaulting. As indicated by Janet Yellen, the US is going to exhaust all its emergency funds by the 18th of October and a quick measure needs to be taken to pay the bills on time. This could create havoc across the globe and the US is the most influencing economy of the world.

The republicans did not want to lift the debt ceiling and suggested budget reconciliation as a measure to fight the problem. They had made a major impact on the decision with their voting majority in the senate. The bill has not been passed yet as there is no formal deal signed by both parties. As Joe Biden pressurized and insisted the republicans see the problem through the point of view of democrats and come to a solution rather than negotiating for a very long time, a middle ground was achieved.

In the recent meeting, McConnell has made an offer that the debt ceiling should not be abolished, instead, it should be stretched by a certain amount. This arrangement will save the country from defaulting on the 18th of October. The republicans do not want to come in the way of the democrats as they want to protect the country and the world’s economy from a catastrophe.

This will take the blame off from them that they are obstructing the path towards the betterment of the nation. McConnell stated that the ceiling will be lifted for a short interval of time and by the end of the year some other way needs to be figured out to deal with the problem. Budget reconciliation is an option suggested by them and by the end of the year there would be enough time for the officials to look into it.

The debt limit will be raised by fixing the number of dollars that are required to cater to the needs for the current scenario only. This is a step that will be taken considering it an emergency and the conditions will get back to normal once the emergency is tackled.

Viewing this from the democrats’ side, the issue will stand on its previous position if no alternative is decided in the coming months. Raising the debt ceiling will fulfill the current requirement. This is the key difference between raising it and demolishing it.

No formal agreement has been signed on this offer but it is expected soon in the coming days. The decision will be made by at least 60 favorable votes in the cabinet. 50 members of the senate are republicans so at least 10 republicans have to agree with the arrangement made by the democrats.

Ted Cruz, a member of the Republican Party in the senate remarked that the country isn’t going to default and the democrats know that. The issue is becoming more of a political playground.
The democrats however negated his comments and said that the republicans are trying to combine the economic and political issues and create confusion amongst the public. The country does need an immediate solution to the problem.

Jen Psaki, White House Press Secretary commented on the offer made by Mitch by saying that this offer has complicated the matter even more as it is not a full-proof solution. He says since the details are derived from a press release rather than a formal agreement, the ambiguity on the matter persists. From the details that have been drawn, it appears that this would create a long cumbersome process for the country involving many risks. The issue is being delayed rather than resolving it once and for all.

The response of Chuck Schumer, the leader of the majority, or Nancy Pelosi will give a further update on the issue. A final decision is still awaited as this will have a major impact on the global economy and currencies all over the globe as well.

October 7, 2021
US Debt Ceiling And The Global Market

The US president, Joe Biden is facing a lot of resistance in his decision of raising the debt ceiling to pay all the bills the country is liable to pay by next month. Whether to increase the debt limit of the country or not has become a point of argument between the democrats and the republicans.

Treasury secretary Janet Yellen predicted that the country is going to exhaust all the borrowing capacities by October 18th. After this date, the country will no more be able to use any kind of credit as the debt ceiling will be touched and can’t be crossed.

The impact of the finishing off of the debt limit will be experienced in terms of unemployment, declined economic activities, loss of stocks, and will lose the household wealth as well. If the limit is not lifted the country may have to cut off its other expenses that are carried out by the treasury. They will majorly include the healthcare facilities given to the citizens and the privileges being given to the military families for their essential contribution. The country will face many adverse effects that will majorly change the economic conditions of the country.

The republicans are opposing the proposal of raising the debt limit. They are of the view that a budget reconciliation can be done to fight the current problems rather than increasing the debt limit. Mitch McConnell, the leader of the Senate Republicans, is putting forth the idea of budget reconciliation over the limit extension. Republicans believe that this step will increase the problems for the country as the debt is increasing more and more.

As a follow-up, Joe Biden remarks that the Senate has raised the debt ceiling several times in the past and doesn’t understand why the Republicans are obstructing the path of the same move now. He even stated that if the republicans don’t want to save the country in any way, they should not act as an obstacle either.

McConnell has whereas stated that if the democrats believe that lifting the debt ceiling would do wonders for the country, the democrats do not need the approval of the republicans and can move forward with their decision.

Schumer, the Senate majority leader has whereas approved of the disposal of the debt limit and has brought the quarrel to an end. He has taken the matter to be solved with the help of voting in the senate. The Senate is supposed to settle the issue on Wednesday and pass the bill that has been proposed to lift the ceiling of debt by the process of voting.

If the debt ceiling is not lifted, the budget reconciliation is the option for the US government to tackle the dues. Whereas it may take a lot of time and discussion and the deadline is the 18th of October. Another alternative for the US government to deal with the situation is to issue a $1 trillion platinum coin and deposit it in the treasury. This has been quite controversial since the past days as the lawmakers and the treasury secretary consider this to be quite unusual and think that raising the debt limit will be more beneficial.

The officials believe that they want the country to settle its bills as soon as it incurs them and set it as an example for the financial markets and the public as well.

The US economy is one of the largest and the strongest economies of the world and if the situation continues to worsen, the whole world will feel the after-effects of the debt ceiling crisis.

The tension is impacting the stock market and the forex as well. The US dollar is expected to jump higher in rate as the country will be facing a country-wide crisis and will try to get back on its feet as early as possible. This can create havoc in the forex market as all the currencies will see major changes as the US dollar is used universally and is a very crucial part of the forex market.

October 5, 2021
Basics of Trading Psychology

Whether it is forex trading or any other form of trading which involves highs and lows, the trader’s mindset plays a vital role in his moves. Abrupt and instinctive decisions may not be fruitful in the long run as it is not a lottery. Proper analysis and strategy are required to become a successful trader.

Every move in the forex market will either benefit you or prove to be a loss for you. It can be quite stressful to handle all ups and downs but if you are really into trading and want to make it work, you should set up your mind in that way.

Trading psychology involves all the emotions that a trader experiences when he is either about to make a crucial decision or when he has gained or lost in the market. The most prevalent emotions that every person dealing in trading will experience are fear, anxiety, nervousness, and greed.

Fear is a constant feeling when you are trading either in forex or in shares. You don’t know what the coming time is going to bring you. You may make a decision and would be frightened about the results. This may keep you away from making the right decisions and giving all that you have learned a try. So, it is important to overcome your fears and make stable and sensible decisions. In our perspective, a person fears something he is not good at or something he is not completely aware of.

We suggest you completely know about all the basics, the tools of technical analysis, and the various strategies that can be deployed in the forex market. Once you are aware of all the possibilities of your moves in the market, you will automatically observe that the fear recedes away.

There are times in the trading market when you have to decide in a very short time. You don’t get to think for some hours, it is a matter of some minutes. In that case, you encounter feelings of nervousness and anxiety. When we have to make decisions in a very short duration of time, it is possible that we make decisions without thinking properly or maybe very instinctive decisions. We cannot completely avoid this situation and we need to get used to it.

A trader should keep an eye on the market and the trends even when he is not placing an order. If you know what has been going on in the market before and you are already predicting some things for the near future, it becomes easier to make decisions in a short interval of time.

Greed and excitement are the two emotions that will arise when you think things are going well and will continue to go on a high note for some time. You may want to make the most of the time and exceed your limits. This is a situation in which you need to handle your emotions and stop yourself from incurring huge losses. A trader tries to buy more and more in such a situation and forgets about the counter effects that can have on his account.

To handle this emotion, a trader should put a limit on the number of pips he can afford to lose and stick to it. Whatever comes up, always stick to the strategy you have formed for the long run. Making huge profits at once is not a viable expectation and one should believe in shorter steps and consistent profit rather than abrupt and huge profits.

Awareness of the pros and cons is very important for a good trader. Even an experienced trader loses money at some time or the other, these outcomes should not have an impact on the confidence of the trader. Uncertainty is an unavoidable part of the forex market. A good trader should be mentally ready to incur any loss.

While you place an order, do the analysis and look at both sides of the coin. Estimate the amount of profit you may get and then estimate the amount of loss you may have to incur. Do not make instinctive decisions hoping that the things will turn in your favor only, the reverse can happen as well. So, it is better to prepare yourself for the loss and then make a move. Profits and losses are like the two sides of the coin in trading. A good trader remains mentally stable regardless of the outcomes of his trade.

A trader who is new to the forex market is most likely to incur huge losses if they are not proceeding with caution. Prevention is always better than cure. Most of the people move into the trading area with the thinking that they will convert their $1000 into $1000000 anytime soon. Some may make the mistake of investing all the input they have at once. All this happens due to a lack of experience and ambiguity of the basics of forex trading. Blowing up all your account balance just to make one trade is a big no. Look for a reasonable and sensible strategy and its yields before you starting making purchases in the market.

Along with the basics and trend analysis of the forex market, a trader should learn risk management as well. There are many risk management moves and strategies that one should know about and follow. Using stops and limits and familiarizing yourself with the concept of leverage may be a good start.

If you are new to the forex market, we suggest you set up a demo account for a while and get a good grasp of the market before you start risking money. Stay updated about the news and events to make wise and informed decisions.

October 1, 2021

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