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5 Reasons Why You Should tread carefully on DEC 16 Interest Rate Trade! - Investment - Nairaland

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5 Reasons Why You Should tread carefully on DEC 16 Interest Rate Trade! by astfi: 10:28am On Dec 10, 2015
1- There is no Stop Loss Point!: Now this is the single most important aspect of the whole thing..

I always try as much as possible to stress the importance of stop loss points to both New and Developing investors, the importance of Stop loss can not be over emphasized, it is so important in financial investment to the extent that no one and I repeat this, no one can be a successful trader without understanding the concept behind stop losses.(that's a topic for another time). It is the only thing in financial market trading that is meant to protect your portfolio exposure. Back to the topic, trading the interest rate is fundamental and as with all high impact news,high volatility is expected and with high volatility you are putting your portfolio to an enormous amount of risk without a stop loss point. Don't get carried away mental stop loss point won't work here it's just not possible.

2- There is no specific direction. The speculation is that the US central bank might increase the interest rates, notice the word MIGHT! It's not even sure, now ask your self what would you do if you decided to buy the USD only to now realize that the status quo was maintained? You would be shocked beyond anything to see that within a few minutes all your years hard work profit has been wiped away.

3- It caught your brokers attention. Remember the saying that the sole aim of all business is to make profit? Now picture this, why would your broker start dishing out unreasonable bonus at this time imploring you to deposit before 15th to be eligible? What's in it for them. Well many years of experience with varying brokerage companies has thought me that whether they are ECN, STP or Dealing desk brokerage, irrespective of how regulated they are, they still have a lot to gain if you lose your investment. All these brokers irrespective of what they advertise do hedge some of your trades as not all are passed to inter banks, the thing is they match as much strafe as they can and then forward the rest that they can't match to the interbanks. And that's the truth. So at this kind of period, they get set to match(hedge)as much trades as they can because they know that the probability of you profiting from this is very low, hence they bring out juicy offers so as to make you deposit.

4- There will be Re-quotes. Yes you heard me well... There will definitely be re-quotes irrespective of how regulated your broker is or how fast your internet connection is or how highly specified your laptop is. There will be re-quotes and this is not because they want to cheat you or because you broker is incompetent NO! It's because there would be a whole lot of speeding differences in price changes due to high volatility across all pairs that has USD either as the base or counter currency that even your broker would find it hard keeping to pace with the changes,so when you think you have a good price at hand and decide to click buy or sell... Prepare yourself for alternative pricing and yes the difference I between is going to be high. I know you must be thinking...I'll use pending orders or set deviations for my executions, am saying you would be shocked. As for pending orders yes your orders would be executed but with a large price difference maybe with 20pips difference or more which brings us back to square one, you can't control the trade. And as regards deviation, as yourself how many pips deviation can you allow? Forget about the 2-5pips difference here, what we are talking about here is something around 20-30 pip difference! Now ask yourself can you manage that? That's like 20-30% of you capital on the wrong side at Execution! Which now brings us to the fifth reason

5- What's your take profit point? How much do you want to make how far are you willing to go how far do you think it can go? Do you even know?

Many financial trader calculate their profit and give little attendance to their risk, a good investor would consider his/her risk first before thinking about the profit, the trader would consider the effect of the loss on his portfolio and weigh if he is comfortable with it or not. In this case you don't hold any of the important aces! Many adviser would say the only emotional things you need to conquer are greed and fear but I put this to you, anybody and everybody can be fearless when you are winning, but after 10 consecutive losses is there one investor that would still want to place a new trade fearlessly? Hence fear is a consequence of our greed. Understanding when the market is willing to give and when it's willing to take is the most important aspect in financial market trading it's called (Market Timing). Putting more attention to what you are supposed to make before making it and not considering what you might lose is a bad way to manage your portfolio.

Conclusion: Stay away! You don't have to be in a buy or sell position, being on the sideline is also a position in the financial market,atleast you get to keep what you have! grin wink

Astute Financials.
http://www.astutefinancials.com/cnews.php?=fnwid&109&5%20Reasons%20why%20you%20should%20tread%20carefully%20on%20Dec%2016!

Re: 5 Reasons Why You Should tread carefully on DEC 16 Interest Rate Trade! by osaki(m): 5:37am On Dec 12, 2015
for wats app 08037074358
Re: 5 Reasons Why You Should tread carefully on DEC 16 Interest Rate Trade! by Nobody: 11:28am On Dec 12, 2015
Hey 08038729194.

Please contact.
Re: 5 Reasons Why You Should tread carefully on DEC 16 Interest Rate Trade! by Karlebolu(m): 5:36pm On Dec 12, 2015
The best thing to do is to wait for atleast 5 minutes after the news, then follow the market.
Re: 5 Reasons Why You Should tread carefully on DEC 16 Interest Rate Trade! by astfi: 2:12pm On Dec 13, 2015
Karlebolu:
The best thing to do is to wait for atleast 5 minutes after the news, then follow the market.


Yes sir, Its a common saying, but then believe me when i say that the quote was started by the brokerage companies, Its a way to get you involved in more uncertainties anyway and heres why

- When you wait for 5 minutes before entering a high impact news update 2 things happen
- High Mark-up : By that time, the volatility is in full effect hence there is no way you can guaranty the amount you would be charged as Spread.
- 5 minutes or not does not necessarily determine the direction of a news impact, unless you have a technical perspective to back it up and the effect of the news happens to conform with the direction the market is expected to move initially If not, after the initial impact the market goes back to the normal direction it is expected to go normally. Come to think of it sir, Why do you thing fundamental traders paces buy and sell limits simultaneously? you think they dont know to wait for 5 minutes?

Be Advised sir.


Karlebolu:
The best thing to do is to wait for atleast 5 minutes after the news, then follow the market.

oohrhiifx:
Hey 08038729194.
Please contact.

You would be contacted Sirs.

Astute Financials

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