Tuesday, October 13, 2009

Narrower width to the cost and the higher chance

The price movement of 10 points brings about 10,000 JPY on the profit or loss if the trading position is 0.1 million USD-JPY. In the same way, the one point difference in the width to the cost should have got one thousand JPY, and it will affect to the investors psychologically whether the commission fees could be fully covered or not. When your position gets in favor, you will encounter the break even point where your are free from any trading cost. This is just the first significant phase you may face after taking position. You will feel easy when the market goes beyond this break even point.

The most important thing starts from here. If you feel the market movement is somehow strange, you must be annoyed where to exit or cut your position safely just after taking position. Sound judgment and immediate action are indispensable to withdrawal from the forex market. It is possible to get out easily without damage if the commission fees have already been covered up. As you can see, the narrower width to the cost would make you easier to get out of the forex market. As is often the case, some beginners are seen to fail into the depth to hell because they cannot take the relevant action to cut their position when needed.

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