I had a very disturbing dream last night that felt more like a nightmare. I was relieved to wake up and realize it was only a dream.
In this dream I was watching the forex price movements on my computer screen. At first, the price was not moving very much. Then suddenly it shot straight up about 5 cents and stayed there for a few seconds and went right back down to where it was before. I thought, “Woe! What was that?”
I was alarmed, but also happy because in this dream I was holding a long position (I am not really holding a long position). It looked like I was going to make a lot of money.
Then after another minute or so it did the same thing again! It went up to about the same place as before. I was very happy to see this since I missed out on it the first time, but then this message popped up, “Your position has been closed due to zero funds available.”
What? Zero funds available? I thought no way!
What happened was right before the second spike up the price dropped way down then bounced right back up so fast I had not even seen it move. I saw the second spike up and thought I was doing great, until the message popped up. I was horrified. That was the end of the dream.
Forex brokers have automatic triggers to close accounts if the balance drops too low. The quick price drop automatically closed my position before the price bounced back up, so my loss was locked in and my account was wiped out. There was nothing I could do about it.
I believe this is a warning that we are soon entering into a time of very unusual extreme price volatility. In these conditions, it would be wise to hold a smaller position than what we are used to holding to allow for a larger cushion. Otherwise, this dream could become reality.
Forex trading offers great profit potential, especially when the prices are volatile, but we need to be cautious and defend our positions. If we get too greedy trying to hold a position larger than we can afford to hold it could be very costly.
Author: James Bailey
James Bailey is a blogger, business owner, husband and father of two grown children. In 1982, he surrendered his life to the Lord Jesus Christ. In 2012, he founded Z3news.com to broadcast the message of salvation by reporting end time news before it happens.
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