Forex Forum

after nfp, how long before spreads return to normal?

Factors That Affect Spread Normalization Broker type – ECN/STP brokers usually normalize faster than market makers. Pair liquidity – Major pairs stabilize quicker than crosses or exotics. Market conditions – If NFP triggers follow-up news or extreme reactions, spreads may stay wide longer. Time of day – US session liquidity can help spreads normalize faster during overlap with London session.

any dangers of trading nfp using pending orders?

NFP is one of the most volatile events in forex, and this affects pending orders significantly. During NFP, the market often moves extremely fast. Your pending order might be triggered, but the execution price could be worse than the price you set. Example: You place a buy stop at 1.1000. The NFP data causes the price to jump instantly from 1.0995 to 1.1010. Your order may be filled at 1.1010 or even worse. Implication: Your planned risk/reward and stop-loss levels could be thrown off. During extreme volatility, your order may only be partially filled. For example, you wanted 1 lot, but only 0.5 lot was executed at your price, leaving you with incomplete exposure. NFP often causes brokers to increase spreads temporarily. If you set a pending order without accounting for wider spreads, your stop-loss or take-profit may be reached instantly, or your order may trigger at an unexpected price.

what is a guaranteed stop loss, when should i use it?

A Guaranteed Stop Loss (GSL) is a special type of stop-loss order offered by some brokers, especially in CFDs and forex. It guarantees that your position will be closed at the exact price you specify, no matter how fast or volatile the market moves—even through gaps or slippage. When to Use a Guaranteed Stop Loss High-Volatility Markets During major news releases or thinly traded assets where price gaps are common. When Risk Must Be Fixed If you cannot afford to lose more than a certain amount, a GSL locks in your maximum loss. Overnight or Weekend Positions Protects against unexpected price jumps while you’re away from the market. Emotional or Inexperienced Traders Ensures that fear or hesitation doesn’t lead to bigger losses than planned.

trading with a higher leverage in cfd means?

Trading CFDs (Contracts for Difference) with higher leverage can be tempting because it allows you to control a larger position with a smaller amount of capital. But it comes with significant implications—both opportunities and risks: 1. Amplified Profits Upside: High leverage magnifies gains. For example, with 10:1 leverage, a 1% move in the underlying asset results in a 10% gain on your invested capital. Risk: This same magnification works in reverse for losses. 2. Amplified Losses Downside: A small unfavorable move can quickly wipe out your margin. Using 10:1 leverage, a 10% drop in the underlying asset could mean a 100% loss of your invested margin. Margin Calls & Liquidation: Brokers may automatically close your position if losses exceed your margin (this is called a margin call or liquidation), sometimes even before you can react.

why should i use low leverage when trading forex, any advantages?

High leverage is really for expert traders who are so sure that their strategy works because they have tested it in different market conditions for years. They can use high leverage to trade bigger lot sizes even when their account balance is low. But as a beginner who doesnt have a tested strategy if you try using high leverage on a low account balance, you are just going to be dashing the broker your money cos you will get stopped out over and over again. Remember, the market can remain irrational for longer than you can remain liquid.

is it bad to exit a trade before your stop loss is hit

Personally, i hate exiting a trade before hitting stoploss. I did in the past and the trade went in my favor the moment i closed it. Calculate your risk and accept the risk before entering a trade. It can hurt your growth if you do it for emotional reasons: 1. Exiting early out of fear If you constantly close trades just because price pulls back a little, you never let your strategy play out. 2. You’re not following your plan If your strategy says “hold until stop loss,” but you close early every time, you won’t get consistent results. 3. You don’t have a rule for early exits Random exits = random results. Professional traders exit early based on rules, not feelings.

Take partial profit or adjust SL: which is better?

Pls read what i wrote carefully. I told you how the trade are managed if I’m adjusting my stoploss instead of taking partial profit. Adjusting my stoploss helps me to secure more profit as revealed by my technical analysis. Note: Taking partial profit reduces the total money, you should make but adjusting stoploss still affords you the opportunity to make more cos you haven’t reduced the lotsize. Taking partial profit reduces your lotsize which invariably reduces the amount made.

is it good to keep shifting my stop loss as price nears it?

👍

win rate or risk to reward; which is more important?

Risk to reward is superior to win rate. For example, you executed 10trades and you won three out of the ten with risk to reward ratio of 3. Your win trades will be at 9rr . Remember you lost 7trades, that’s 7rr . Overall, you are still profitable with a 2rr. Hence, risk to reward is better than win rate.

how do I know when i am gambling during trading?

When you dont have specific/objective entry and exit parameters, you will definitely be gambling because anything goes for you. You will chase every trade and expose yourself to unnecessary risk.

what do you check for before you open a buy/sell trade?

I check the spread of the currency pair I am about to trade. If the spread is higher than what I was expecting, i will leave the pair. Strategy wise, I make sure the pair has presented my trade opportunity before I click a buy or a sell.

whats the best risk to reward ratio in forex?

The best risk to reward ratio is totally dependent on personality and strategy. Personally, based on my strategy my best risk to reward ratio is 1:3. I can always do more if the opportunity presents itself but the moment my trades gets to 1:3 , i secure at least 1:2 and let the rest ride .

is trading a game of probability?

When you study behavioural finance, you will learn that investors often take decisions based on emotions like fear even when the numbers are right in front of them. Because of this, even when the technicals show you that price is supposed to move in a certain direction, you can suddenly see a reversal and move in the opposite direction. So, nothing is guaranteed in trading, making it a game of chance.

what is FOMO in trading & how does it manifest?

4. Emotional Decisions Decisions are driven by fear rather than analysis. Can cause impulsive entry or exit from trades. 5. Chasing Trends Traders feel they must “ride the trend” after it’s already moving fast. This often results in buying high and selling low, which is the opposite of smart trading practice.

how to know when to exit a trade?

What do you mean by automating the process?

how will i know if i'm a profitable trader

To determine if you're a profitable trader, with good psychology and risk management, check for; - consistent profits, - disciplined and emotional control - low drawdowns - positive trading edge - confidence under pressure and ongoing improvement through analysis and adaptation and moreover less losses.

RISK MANAGEMENT

Risk management is not trading but trading is risk management

Wait for the market to act before you react

It all comes down to being patient. Back in the day when I started trading I was so impatient. Sometimes I would not even wait for a candle to finish forming and I would just assume it would closed a certain way and then I jump into the market. Goes without saying I paid dearly as I was always making losses. Sometimes I would see a bearish candle forming and I would just jump into the market assuming it will close bearish, only for it to close bullish.

No position is still a position

Welll said! But this is easier said than done, the urge to trade always wins lol

The smaller the candles, the bigger the lot size

Small or short looking candles are a sign of low volatility most times it is when the market is expecting a news release that you see short candles forming everywhere. For me i would not trade when I see short candles all over the place, but I agree with you- trading a bigger lot size will mean even with the short candles you can still make good money as price moves.