Murphy's Law And Forex Trading: Preparing For The Worst
It is a typical Monday morning and you are up early to trade your favorite currency pair as the financial markets open in New York
. But a few hours into your trading you notice that the price data on your trading platform seems to be delayed, and you realize that you cannot close any of your open positions or even see where the current market value is. You look over at your internet router and you see that the indicator light for a live internet connection is off, and it will not come back on.
There have been hundreds of these types of horror stories where someone who needs an active internet connection to monitor their open forex trades suffers from either a power outage or a disconnected communications signal that will not come back on, and suddenly they enter into a near panic because they cannot touch any of their open trades or see what the market is doing. This can be especially stressful if you do not normally trade with reasonable risk management and do not enter in a stop-loss level when you trade.
The best thing that you can do to make sure that this does not happen to you is to establish a good verbal relationship with your forex broker when you open your account. Usually when you open a new account you will get a call from someone at that company that will address any questions or concerns you might have, and it is good to try to form a personal relationship with someone at that company so that if the worst happens you have a number to dial and a name of someone who can help you.
Placing trades over the phone is not something that is very common today since it is much more efficient to use an online trading platform (and with some brokers you can even use a mobile version of their trading software), but it is always good to be able to verbally articulate an exchange rate quote in the event that you must trade over the phone. If you become confused when your broker starts reading off numbers to you about where your open trades have moved to in the market, you might end up unnecessarily losing money by prematurely exiting a position that could have been profitable if it remained open.
On a practical note, if you are trading at home then it is good to purchase a surge protector for your computer that also has a battery backup in case of a power outage. These can usually be had for under $100 at most electronics stores and can be very useful in the event of a power outage. It is also important to have a landline telephone with a cord that can still function if the electricty goes out, and to keep the phone number of your broker handy so that you know who to call.
by: Ricky Weber
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