logo
logo
Sign in

Don’t be overconfident - Regal Core Markets

avatar
Regal Core Markets
Don’t be overconfident - Regal Core Markets

Many traders can easily be attracted to the high leverages or margins that some forex platforms offer. This leveraging feature allows a trader to magnify their capital as they make trades, but what they always forget to account for is high risk. One thing that traders should remember is that forex trading is not a gamble. This is the worst strategy that any trader can apply. Successful traders use reasonable leverages that don’t cut into their pockets deep enough to hurt.

According to the Geneva Association’s research, “Theoretical models predict that overconfident investors will trade more than rational investors. This means that if an investor is confident in leverages presented to them, they turn out to increase their trading volume. This can sometimes lead to unexpected risks and losses.”

One way to avoid being overconfident in leverages offered by different trading platforms is by applying the right strategy, such as range study. Range study allows traders to understand how the prices of the currencies fluctuate.

From the same report by Regal Core Markets, “During a range study, traders closely monitor the Upper and Lower Limit of a specific currency, capitalizing on the said fluctuations. The said currency is purchased during its Lower Limit and sold during its Upper Limit. The point, however, is to analyze the parameters of the said fluctuations. The timeframe of the low points (low price), as well as the high points (high cost) of a particular currency, are significant factors for effective trade.”

collect
0
avatar
Regal Core Markets
guide
Zupyak is the world’s largest content marketing community, with over 400 000 members and 3 million articles. Explore and get your content discovered.
Read more