- The Hardship of Using a Complex Strategy
Many people try to follow a complex strategy and fail to make a profit. The profit can be easily made if the people know how to use the strategy at the right time and at the right moment. Most of the investors follow the professionals who are skilled in the industry. These people have a lot of experience and know what they are doing. When the hard tactic is used, a novice person may not understand but a professional can easily use to make the money. This article will tell about the problems that a trader may face when trading with a hard game plan. Keep in mind, not every person will have the same conditions- they will depend on the skill and knowledge a person has, the results will vary.
Creating false signals
New Singaporean traders are always fascinated with the complex trading strategy. They are trying their best to make things complex with the hope that it will generate more profit for them. When it comes to real life trading, they start losing money on a regular basis. They simply find a way to blame themselves for not following their complex trading system.
But do you really think the problem lies within the system? The simple answer is NO. The biggest problem a trader can have is lack of knowledge. You don’t need to super hard trading system to make a consistent profit. All you need is access to the best Forex trading account in Singapore and a balanced trading strategy. Many traders at Saxo is making millions of dollars just by using a simple support and resistance level trading strategy. So stop making things complex in trading business.
Not understanding the concept properly
The first problem is that people are unable to understand the idea of the trading strategy. The industry is changing and what it needs to become successful is a trading plot that can adapt to the volatility. The old plans may not work and that is why the people are looking for a complex formula. Using this technique, first, make sure you have understood how to use the blueprint. A person can be given much advice but only follows what he thinks is best. A renowned concept can have many followers but without knowing the idea behind the strategy and understanding it properly, there is no way to improve the profit. A simple system can be easily used when a complex technique needs experience and skill.
The result can be unexpected
Most traders say the result is not what was expected in the trade. The goal was to make a profit but the planning has turned the result. It is for the lack of understanding of the concept. The sector is volatile and there are uncertainties. Even the best people cannot predict successfully future movements. It is best to stick to the common way and avoid the risks. We have seen many wonderful traders started off well in the beginning. These people used simple methods but achieved an amazing result. As they grow older and professional, the plans begin to change and the result was not as good as it was before. It did not take them a long time to understand where the fault was and returned to the first method.
The chances of mistakes are high
With a simple solution, any beginner can follow the advice. However, the hard method can confuse the investors and the flaws can be high. Imagine you have only started the career. The broker will only give the simplest platform to get you started. If a professional looking platform was provided at the beginning, it would take years to understand how to use the different options in Forex. Slowly a person needs to adapt to the industry. A simple way can also be successful if it helps to make a profit. What is important in Forex is to make the money, not to follow a hard plan.
Naira Maintains Stability at Official Fx Window
The Naira maintained its streak on Monday, settling to close at N415.07 per dollar. This is the same price at which the Nigerian currency has closed for the last few days, according to the Investors and Exporters window where the Naira is traded officially.
While there have been very marginal differences in the opening prices over the last days, in the end the currency has come around to settle down at the same price (N415.07 per dollar) at the close of each day.
On Friday, the Naira opened at N413.71 per dollar which represented a 0.03% change from the previous day, according to the Investors and Exporters window. On Monday, the currency opened at a similar price, starting the day off at N413.75 per dollar.
Although there have been minimal changes in the opening prices, generally the currency opens at similar prices, with backgrounds of N413 per dollar and changes of only a few kobo.
While the general opening and closing prices didn’t witness much change, the same cannot be said for the Spot and Forward rates. On Friday, the Spot rate was between N404 per dollar and N444 per dollar. However, Monday saw a significant change in the Spot rate. Across all transactions that occurred on Monday, the naira reached a high of only N405 per dollar (N1 lower than Friday’s high), and went on to reach a low of N456.97 per dollar (N12 lower than the previous day).
The Forward rate – for future transactions that were agreed upon on Monday – saw a more significant change. Friday’s Forward rate high was recorded at N411 per dollar, but on Monday that fell greatly to N452 per dollar. However, Monday’s Forward rate lowest was N453 per dollar, about N2 better than the N455 per dollar at which it traded on Friday.
The total turnover of the dollar recorded on Monday sat at $256.69 million. This was considerably higher than the turnover of $215 million that was recorded on Friday.
At the parallel market on Monday, the Naira fell to close at N569 per dollar from the N560 per dollar at which it traded the previous day. After that exponential rise to about N535 per dollar, the parallel market is seeing the Naira return even closer to the N575 per dollar price at which it had sat for a while.
Naira Stays Flat at Official Market
After closing at N415.07 per dollar on Thursday, the Naira maintained a flat rate and went on to close at the exact same price on Friday. This is according to the data released by the FMDQ group, on the group’s official website.
This connotes a certain stability around the currency, as the recent rates at which the currency has been closing at in recent days and weeks have hovered around this particular price range. It further strengthens the idea that the festive period will see the Nigerian currency trade at that range.
The FMDQ group as usual also updated the Forward rate and the Spot trade of the Naira’s trades on Friday. The prices appeared to have returned to some of the usual, standard rates which they consistently traded for a while.
The Spot rate returned to its usual price range, falling as low as N444 per dollar and rising up to N404 per dollar. What this means is that throughout the entire day, the Naira traded at different prices at different times, trading between N404 per dollar and N444 per dollar.
For the Forward rate, a high of N411 per dollar was reached while a low of N455.97 per dollar was gotten. The Forward rate, which is used for future transactions generally trades at lower prices than the Spot rate.
On Friday, the total turnover of the dollar sat at $215.47 million. Turnover refers to the amount of the currency that is involved in the trade throughout the entire day. Everything that was traded on Friday amounts to 215 million dollars. This was a huge increase from the turnover of the previous day, which sat at $98 million.
It has been reported that in a bid to save the naira, the Central Bank of Nigeria threw a little over $2 billion into the Investors & Exporters window in the seven months to July this year (2021). In the corresponding period last year, the apex bank only injected $628 million into the window.
Haven Currencies Gained Across the Board as Investors Assesses New COVID Variant
Investors are moving their funds to known safe-haven currencies to curb risk exposure while they evaluate the effect of the new covid variant on global financial markets.
Two cases of the new Covid variant called B.1.1.529 that emanated from South Africa were reported in Hong Kong on Friday, increasing concerns it could hurt global economic recovery and compel nations to start closing their borders going into the new year.
Leading safe-haven currency, the Japanese Yen gained against the United States Dollar to 113.151 at 8:40 pm Nigerian time, down from 115.450 it attained on Thursday as shown below.
Similarly, the Swiss Franc outperformed other currencies as its attractiveness surged among global investors looking to avert catastrophe amid rising global uncertainties.
Swiss Franc rose against the United States Dollar to 0.92187 from 0.93604 it peaked on Thursday before news that the United Kingdom and other nations were considering shutting their borders.
The Euro rebounded against the United States Dollar after plunging from 1.18905 it traded in August to 1.12039 before paring losses to 1.13129 when the news of new covid variant became a concern.
Surprisingly, gold, a known haven asset, failed to sustain its earlier gain and pulled back from $1815.46 to $1788.10 at the time of writing. Another indication of rising global uncertainty.
Even experts like Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA, had earlier predicted that gold will shine given its characteristics as a haven asset.
He said “Times like this are when gold shines and we’re seeing investors flock back to an old reliable friend today. It has pulled a little off its highs after hitting $1,815 earlier in the session but it remains above $1,800 at the time of writing. It’s an interesting one for gold and bonds, as the situation now is very different from last year.”
Investors however seems to be dumping the tradition risk aversion commodity for something more stable, especially with bitcoin and other cryptocurrencies now doing better number in terms of gain in a period like this.
Crude oil has dropped more than 5 percent or $10 today as energy traders aggressively closed the positions to better assess the situation.
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