Forex encyclopedia

We always hear people saying to control our emotions and trade carefully but we never understand them until we realize what they mean in fact. Below we will discuss this issue in details. Consider an example where we know how emotions lead you to lose: Suppose you have $500 of capital and you are trading. You took a high risk and thus you have lost $200. What finally remained is $300, you get frustrated and open again with an even more risky trade. Again you lose and come to $100. By following the same pace, you will end with zero balance. Let's analyze. You started with capital of $500 and lost $200 with $300 remaining. Your intention is to recover losses immediately and this is what we call an emotion. You have only thought of recovering money and you do not even think whether that situation is suitable for opening a trade or not.
Financial Conditions index (IFC) is applied in the USA to define market liquidity and measure risk. Value is calculated on the basis of more than 100 various figures of financial activity in the country. Index with plus tells about tough financial conditions formed by that moment, whereas its negative value signalizes about a freer economic climate.  
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