Interesting Fact about India

Indian housewives hold 11% of the World’s gold. That is more than the reserves of USA, IMF, Switzerland and Germany put together.

Central Bank QUIZ 3: Looser Monetary Policy of a Central Bank = Dovish or Hawkish?

Looser Monetary Policy of a Central Bank = Dovish or Hawkish?

Quoting from a Bloomberg's Reader on The Lure of Forex: Conflict, Debt and Loss in a $400 Billion Market

I really like the following feedback from a reader on Bloomberg because this is like the perfect pitch as a FX sales.  haha. 

hk1035li" This is another case of journalist intentionally or unintentionally spreading half truth or fear. I am telling you what I learned from six years of FX trading with a winning record.

In reality, FX is safer than stock. Money never (or seldom) goes to zero but companies go bust everyday. What makes you lose your acct is not leverage but the incorrect use of leverage. You don't go all-in every hand in poker either. A new-comer at leveraged FX is analogous to a soccer-mom trying to drive an F-1 car. Trade your demo acct several years before putting in real money. If the argument in this article holds water, we should ban all the high-powered sports cars because it take less than 100 horsepower to drive at 65 mph!

I used to manage money in stocks and mutual funds for clients. I thought I knew how to judge the market until I got into Forex. Forex really humbled me because it made me realize that I did not know the first thing about trading, especially risk management.

The key is education. Do you really understand macro economics? Do you really understand how to correctly identify supply and demand zones. Do you understand indicators other than RSI and moving average? Do you follow economic calendar on a daily basis? One cannot blindly trade and expect to make money consistently. Once you spent the time in education, FX is lovely and simple. Besides, it makes you a better stock trader too.

One thing regular investors don't learn is risk management. They are taught to buy and hold. For those who are interested, they should really spend the time to learn about FX and do some independent thinking. Like stock investment, don't listen to those talking heads on TV. Everybody, I mean everybody, is there to sell you something!

Another trouble is even the "Pro's" make mistakes as well. Still remember the big whale in London lost a couple of billions? You can open the news and read Yahoo gain over 200 million in FX and Sony lose hundreds of millions in FX hedging. So even when you are right in your own analysis, the market can still make you lose money because the big guys got it wrong; therefore, nothing is more important than risk management.

FX offers great tools e.g. charting software and indicators (for free). These tools help me put a perspective into the market condition and the same knowledge is applicable to stock. Basically, it boils down to quantifying human behavior by applying statistical tools. The big banks can measure how much pain you can take before you close out your losing trade. The chaos system is in fact highly ordered but it takes an eye and the right tools to filter the noise.

You also have to fully understand BOTH technical and fundamental analysis to be successful in FX trading. Luck has little value in long-term success. And...FX should not be your only investment!"

Source: The Lure of Forex: Conflict, Debt and Loss in a $400 Billion Market  http://www.bloomberg.com/news/2014-11-12/leverage-as-high-as-50-1-lures-otc-forex-traders-who-mostly-lose.html