Let's Trade Together - Forex, Crypto and Stocks

By Kathy Lien While investors are eagerly awaiting Janet Yellen’s testimony today before the Senate Banking Committee, the sell-off in currencies, equities and Treasury yields indicate that risk aversion is the overriding theme in the financial markets this morning.  A smaller decline in durable goods orders helped to ease the selling but with jobless claims rising, the relief rally in USD/JPY and other major currencies was limited.  Durable goods orders fell only 1% in the month of January compared to a forecast of -1.7% but what made the report positive for the greenback was that excluding transportation orders, durable goods rose 1.1%. After the sharp decline in December, investors were really hoping for a rebound in January and even though there was a large pullback in transportation orders, demand for other goods improved significantly – a sign that confidence could be improving in the economy. Meanwhile the 14k increase in jobless claims is discouraging but not overl...

Leverage is the ability to use something small to control something big. Specific to forex trading, it means you can have a small amount of capital in your account controlling a larger amount in the market. Stock traders  will call this trading on margin. In forex trading there is no interest charged on the margin used and it doesn't matter what kind of trader you are or what kind of credit you have. If you have an account and the broker offers margin, you can trade on it. The obvious advantage of using leverage is that you can make a considerable amount of money with only a limited amount of capital. The problem is, that you can also lose a considerable amount of money trading with leverage. It all depends on how wisely you use it and how conservative your risk management is. Leverage Amounts Leverage is usually given in a fixed amount that can vary with different brokers. Each broker gives out leverage based on their own rules and regulations. The amounts are typically 50:1, 100...