Review Category : News

What do You Need to Know about Forex Charts?

forex charts

If you want to become a successful forex trader, you need to read and understand forex charts. You can make use of charts to predict the price movement of different pairs of currencies and take important investment decisions easily. Traders can make use of charting tools to determine trends and identify the best time to enter and exit the forex market.

Charts record several prices for a specified period and you can make use of this information to determine how the currency pair of your choice has performed in the past. This can enable you to make predictions on the future movement of the currency pairs.

Forex charts and continuation patterns

You may be able to see continuation patterns in forex charts when there is a change in the direction of the trend for a brief period before it returns to its original position. It is usually during a volatile period that you see the continuation patterns, and the major types include triangle and wedge.

The triangle patterns are common and they occur on short time frames. The different types of triangle patterns include ascending, descending and symmetrical triangles. When a currency pair is consolidating upwards, ascending triangles occur and they usually break through the resistance level.

Similarly, when a currency pair is consolidating downwards, descending triangles occur and they usually break through the support level. When the highs and lows come together to form a triangle, symmetrical triangles occur and they have a consolidation pattern.

Falling and rising wedge are the other two patterns that you need to be aware of when reading a chart. The falling wedge is an indication of the bullish pattern prevalent in the forex market and you may see the price break upwards. The rising wedge is a bearish pattern with the prices coming down. You may be able to determine the direction of the currency pair when you look at the chart patterns. The trends that you see on the charts may continue for a few days, weeks or even years in some cases.

Different types of forex charts

Bar, line and candlestick charts are the three most popular forex charts used by traders. The line chart is the simplest chart where the closing price of the currency pair at the end of the day is displayed. When you look at this chart, you may be able to understand the price of the currency pair over a period.

The bar chart consists of high, low, opening and closing price points. Candlestick charts are similar to bar charts where they also display the high, low, opening and closing price points. A period is represented by each candlestick and you can choose to use different colours for each one of them.

When you start learning to read and interpret charts you may be able to apply your knowledge for technical analysis. When you start analysing charts you may be able to understand support and resistance levels and this can help you time your trade in an effective manner and make consistent profits.

 

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What Does Having An FX Plan Mean?

FX

If you attend an FX trading course you will find out that forex trading requires traders to keep their eyes open on a lot of things. Ranging from analysing the market to dealing with your money in the account, you will have to not only keep a lot of things in mind while trading in currencies but also ensure that you are focused on all of them.

This is the prime reason why FX trading plans come so highly recommended. This is especially true for forex traders who are new to the field. However, what does it mean to have a forex trading plan on the ground level? Here are some answers.

It Means Structure

First of all, having and following an FX trading plan means that you would have a structure to your whole trading process. As mentioned earlier, keeping the various aspects of forex trading in mind can be a difficult task. Having a forex trading plan will make it easier for you to keep your eye on the ball at all times.

It Means Consistency

A major part of forex trading is related to consistency. Forex trading is not about highs and lows. Instead, it is about consistently churning in small profits to a point where you make handsome net profits at the end of the month.

This is not possible if you take big wins but incur huge losses. By getting smaller profits over an extended period of time, however, you can ensure long term profits.

It Means Stability

When you can incorporate both consistency and structure to your whole forex trading process, then you are essentially making your efforts and growth stable. Stability is the single most important thing you can look for in the FX market. Stability will allow you to be sure of your future in the forex market as well as have a rough idea of how much you will make every month.

It Means Improvement

With an FX trading plan, you will also be able to constantly improve your performance in the forex market. The reason for this is that because your actions in the market will be stable and consistent, you will be able to assess which tricks and techniques are helping you and which ones need to be removed from your trading process.

It Means Surety

The majority of forex traders are extremely uncertain about the forex market in the initial stages of their careers. They doubt their capabilities and their understanding of the market to a point where this doubt starts affecting their decision making process. If you create and use an FX trading plan then this doubt will fly away and you will be left with surety.

It Means Profits

In the end, the simple reason why you should be governing your trading process on the basis of your FX trading plan is that it will result in profits. Traders with trading plans are known to be more profitable than traders who make arbitrary decisions in the market.

 

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Criteria for Selecting FX Trading Software

fx trading

Traders can make use of fx trading software to analyse the market and execute the trades in a systematic manner. Irrespective of whether you are a new or experienced trader you can make use of the trading software to trade successfully in this volatile market.

Automated forex trading software is designed in such a way that they may be able to place a trade without the intervention of the trader. All that the trader has to do is to specify the parameters that need to be met for placing a trade and when these are met, the trade is placed automatically using the software.

Most important criteria when selecting fx trading software

Fx trading software may vary in performance, speed and ease of use and it is important that you make the choice as per your specific needs and requirements. You should avoid blindly choosing the software that other traders use. What works for them may not work for you and you may not be able to benefit from your choice.

The best trading software needs to be flexible and user friendly so that you are able to customise it as per your individual trading needs. It should be easy to set up and use. If the software that you choose is complicated, you may not be able to take advantage of the many trading opportunities available in the market. It should be simple to understand and use so that you may be able to execute a fast trade and earn good profits on your investments.

As there are hundreds of software systems that are provided by brokers, you need to be careful when making the choice. You can opt for a demo system so that you can test the features and functionalities of the system. This can help you become aware of the many functions of the software and you may be able to make an informed choice.

You should avoid choosing trading software that guarantees you profits in all your trades. Many fraudulent brokers make such unrealistic claims when marketing scam software. If you are not careful when making the choice, you may lose your valuable time and money. You may also miss the many trading opportunities available in the market.

It is best to read reviews about the trading software available in the forex market so that you are able to make a good choice. You can choose to read reviews from reputed websites, blogs and forums so that you are able to get a clear picture about the software you are choosing.

Advantages of using fx trading software

When you use fx trading software, you may be able to eliminate emotional and impulsive trading. You may be surprised to know that most of the trading decisions taken by traders are influenced by emotions and this can result in big losses. You may be able to manage multiple trading accounts easily when you use software to place a trade. This can help you maximise your profits.

 

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How to Use Risk Management in FX Trade

fx

Risk management is indispensible if you want to succeed in fx trade. If you do not have a proper risk management plan you may not be able to achieve success in this volatile market. Most traders lose money on their trades as they do not have a good risk management strategy.

As a trader you need to understand that it is not easy to make consistent profits in the foreign exchange or fx market. There are inherent risks associated with this market and if you are not careful you may lose big money within a few trades.

Tips to manage risks in fx trade

Irrespective of whether you are a beginner or experienced trader, you need to make a proper plan for every fx trade. A well made plan can enable you to take your first step into successful forex trading. After you have made a good trading plan it is important that you stick with it. If you keep making changes to the plan at regular intervals you may not be able to benefit from it.

Placing emotional and impulsive trades can also result in big losses. When you let emotions cloud your mind you may not be able to think in a rational manner and this can affect your investment decisions. Planning can help you trade in a disciplined manner and you may be able to avoid emotional and impulsive trades.

A good plan should include how much you can afford to lose in each trade. This can enable you to set stop loss orders in advance so that you are able to avoid big losses even if the market moves in the opposite direction of the trade you had placed. Placing a stop loss order is one of the best risk management strategies that traders can use to minimise losses.

Most traders do not have a clear idea about risk tolerance levels and trading targets. They also do not know when to enter and exit the market. All these factors can substantially increase the risks of trading. If you want to protect yourself from losses it is important that you determine your risk tolerance level before you place a trade.

Traders want to make big profits within a short period and this often results in overtrading. They also start placing big trades instead of small trades and this can increase the risk of accumulating big losses. It is best to place small trades so that you are able to minimise losses and maximise profits.

Using proper leverage in fx trade

Leverage is a wonderful tool that can be used by traders to make big profits from small trading accounts. However, you also need to remember that it can be a double-edged sword and if you are not careful you may accumulate big losses. Using proper leverage in fx trade is important if you want to manage the risks of trading in an effective manner. If you are a beginner it is best to avoid using leverage until you gain adequate knowledge and experience.

 

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Implementing Efficient Forex Trading

Forex trading

The biggest dilemma that most individuals face about entering the forex market is whether to do it on a full time basis or on a part time basis. This is a key dilemma in the growth of a forex trader because it shows that he or she is being objective and careful about entering the world of forex.

For instance, those individuals who just dive into forex trading after hearing about how much money they can make in it invariably end up surrendering their whole account equity to the market forces.

In contrast, those individuals who choose to gradually make their entry into the forex market tend to not only last longer but also profit much more than 90 percent of the traders in the market. The reason for this is simple.

Gradually easing yourself into forex trading would allow you to keep your learning curve stable and moderate. Thus, you will learn more in the long term and retain more when it comes to applying what you have learned. Here is how you can stagger your forex trading efforts.

Maintain Your Current Job

The first thing you need to do to stagger your forex trading entry is to ensure that you have an alternate source of income. This means that you need to keep your day job and trade in forex on the side.

Such a decision would give you the added benefit of not relying on the forex market for your daily upkeep. In fact, your proceeds from the foreign exchange will become your supplementary income as opposed to your primary income.

Focus on Higher Time Frames

If you are going to be forex trading on a part time basis then you will need to tailor your efforts to suit your situation. This means focusing on higher time frames. Working on smaller time frames implies reliance on the number of trades as opposed to the quality of trades.

Limit Your Time in the Market

Forex trading on a part time basis means that there would be solid logistical constraints on you. In other words, there would only be a certain amount of time that you would be able to devote to trading on the forex market.

Moreover, you should proactively limit the time you spend being in the market. This would allow what you learn to properly sink into your psyche.

Avoid Thinking about It All the Time

Intermittently trading in the forex market would give you breaks from the market which are important for you to properly understand what you learn. Furthermore, forex trading can be highly addictive, which is the reason why so many traders end up overtrading and losing a lot of money.

Implement Efficient Trading

You will essentially be focusing on ensuring that you win with the limited number of trades you place in the market as opposed to using the trial and error method. This is crucial for sustainable forex trading because the trial and error method often results in success rates going down and accounts getting blown.

 

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Why Learn Forex Trading Glossaries?

forex trading

The first thing that traders need to know before they start forex trading is forex glossaries. The foreign exchange market is the largest financial trading market in the world, and you need to understand that it has its own language. Unless you learn this language, you may not be able to make regular returns on your investments.

You need to understand the various forex terminologies so that you are able to trade in an effective manner. If you do not understand the trading glossaries, you may not be able to trade successfully as it can prevent you from interpreting the market conditions correctly.

Basic forex trading glossaries

Forex trading is done in pairs of currencies and it is important that you are aware of what a base currency and quote currency is. Apart from this, you should also gain knowledge about the major pairs of currencies that are traded in the market. This can help you choose the currency pair you want to trade easily. You need to understand that each currency pair has its own characteristics and you need to make the choice carefully.

The base currency is the first currency in the pair of currencies and the quote currency is the second currency in the pair. For example if you are trading AUD/USD then AUD is the base currency and USD is the quote currency.

The eight most popular and actively traded currencies in the forex market include AUD, USD, GBP, EUR, CAD, JPY, CHF and NZD. When the USD is traded with the other seven currencies, they are known as major currencies. Cross currency pairs are different from major currency pairs, as they do not include USD. For example these could include AUD/EUR or AUD/CAD or AUD/JPY.

The other important forex glossaries you need to know include pip, bid price and ask price. The smallest unit price for any currency is known as pip. When you start gaining pips you may be able to make profits from your trade. A single pip is the change you see in the fourth decimal place. For example if the currency pair that you are trading has a pip of 0.0001 – 0.0002 then the difference is your gain.

The price at which the market is prepared to buy a currency pair is known as bid price and the price at which the forex market is prepared to sell the currency is known as ask price. When you become aware of the bid and ask price you may be able to determine the spread easily.

Why it is important to learn forex trading glossaries

When traders start understanding the meaning of forex trading glossaries it can help them grab more trading opportunities in the foreign exchange market and this can enable them to earn more money. When you gain knowledge trading becomes less complicated as you are in control of what is happening in the forex market. This can enable you to minimise risks and maximise profits. You can make use of the many online and offline resources to gain knowledge about the trading glossaries.

 

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How to Use Forex Signals in Trading

Forex signals

Forex signals can help traders take important investment decisions in buying and selling currency pairs. Although there are hundreds of trading opportunities available in the foreign exchange market, most traders are not able to take advantage of them due to lack of knowledge of when to enter and exit the market. You may be able to grab the trading chances when you use signals for trading.

The popularity of the foreign exchange market in Australia has ensured that there are hundreds of signal providers offering their services to traders. Before you make the choice, it is important that you do adequate research and choose only those providers who are reputed and reliable.

Different types of forex signals

There are different types of signals available and these are created either automatically or manually. Professional traders create manual signals by sitting in front of the computer and interpret when to buy and sell looking at the prevailing market conditions. Signal software is used to create automated signals.

If you want to use the forex signals created by professional traders you may have to pay monthly subscription fees to them. You may have to buy the robot when you opt for the automated signals. There are hundreds of automated robots available and you can make the choice depending on your specific needs and requirements and budget.

Irrespective of how good the professional trader is they may not be able to remove the influence of emotions from their decisions. When you choose automated software, you may be able to avoid the influence of emotions and this can enable you to take forex trading decisions in an objective manner.

Tips to identify forex signals

Moving averages can be used to identify forex signals. You may be able to determine whether there is an uptrend or downtrend in the foreign exchange market by looking at where the short-term moving average crosses the long-term moving average.

You can also make use of average directional index (ADX) and moving average convergence divergence (MACD) to spot the signals. Most traders combine several indicators to see if the trend is moving in the same direction. The strength of the trend can be determined using these indicators and this can help you take good trading decisions.

Apart from this Fibonacci analysis is also used to identify the signals in the foreign exchange market. Traders can check daily pivot points and draw trendlines so that they are able to identify the support and resistance levels. This can help in determining profitable entry and exit points. When you are able to determine the best entry and exit points you may be able to minimise the losses and maximise the profits easily. Fundamental analysis and economic news and events are also used by traders to spot the signals.

When you choose a good forex signal provider you may be able to save time and effort in understanding the prevailing market conditions. You may also be able to time your trade in an effective manner and this can help you make consistent profits.

 

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Importance of a Currency Trading Plan

Currency trading

Currency trading is not easy and if you are serious about becoming a successful trader, you need to have a good functional plan so that you are able to navigate the many complexities of this market easily. Most traders do not realise the importance of a good trading plan until they start losing money in this volatile market. You may be able to safeguard your investments in the forex market easily with planning.

You may be surprised to know that most traders do not have a plan before they start trading in the forex market. Some traders may blindly copy the trading plan of other successful traders but this may not yield them the desired results. The plan that you create should suit your individual trading style.

Steps to build a successful currency trading plan

Before you start building your currency trading plan you need to do your homework. You need to decide on the currency pairs you wish to trade so that you can choose the trading strategies based on this choice. You need to understand that the strategies you choose to use may vary depending on your choice of currency pairs.

The next step involves determining a realistic trading goal. The minimum risk reward that you may be willing to accept can also be decided. You can set weekly, monthly, quarterly and annual goals so that you are able to analyse them and make changes if necessary.

You should also decide on how much risk you are willing to take on each trade. This can help in choosing the lot size to trade. The trading plan can also include exit rules so that you may be able to limit your losses if any. Apart from exit rules the plan should include entry rules too so that you can choose the right time to place a trade.

You need to ensure that you cover all aspects of forex trade in your plan. One of the important things that you need to understand is that although a trading plan does not guarantee you success you may be able to minimise the risk of trading significantly.

Why is a currency trading plan important?

A currency trading plan acts as a guide and helps the trader trade in a disciplined manner. When you try trading without a plan, you may not be able to place a trade in a confident manner. Planning gives you the confidence to handle the inherent risks of this volatile market in an effective manner.

One of the biggest advantages of having a good trading plan is that you may be able to avoid emotional and impulsive trading. Traders lose big money when they indulge in impulsive trades and planning can help avoid it easily.

A good plan will not just involve all aspects of placing a trade but also includes things after the trade is placed. Irrespective of whether you have a winning or losing trade the plan should involve maintaining a journal of all trades so that you are able to analyse them and take better investment decisions.

 

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Forex News on COP and VEB

Forex News

In forex beginners are often told to focus solely on one currency pair like the EUR/USD. Yet, there are hundreds of pairs one could think about trading. When traders think about South America they typically look at Brazil for forex news because it is about the only currency with strength traded on the public market. Most of the other currencies including the Colombian peso are not available for forex market trades, although it can be traded physically. Physical trades are what are happening right now and it is offsetting the entire foreign exchange market. Even though currencies may not be on the investor platform it does not mean the currency has no impact to the market. It is quite the opposite since countries still need to trade goods for money. The only difference in a non-publically traded currency is corporations, banks, and central banks are responsible for the largest moves in the currency.

Forex News Shows Citizens Adjusting Rates

Although it is typical for international corporations, central banks, and banks to be the biggest players in the forex market on currencies like VEB and COP forex news shows something worrisome happening. Colombia borders Venezuela and current foreign exchange policy in Venezuela is affecting the border area according to local business owners. The VEB or Venezuelan Bolivar and Colombian Peso have hit a very high differential for the year. It is higher than it has ever been in terms of the foreign exchange rate.

Forex operators are seeing a huge supply of VEBs at the border, which is lowering the value of the Venezuelan Bolivar. It is a result of Venezuelan citizens not wishing to buy COP and USD, as a means of protecting their savings. Both currencies have a higher value than the Bolivar. Forex news sources revealed that one Bolivar was 2.43 pesos in 1998. In 2001 the rate of 1 Bolivar was at 3 pesos. Now, 1 Bolivar is .045 cents in pesos. There has been a complete reversal of strength for the two currencies.

What many are seeing is Colombians exchange pesos for Bolivars, and buy goods at the border towns of Urena and San Antonio. It has put pressure on the exchange rate. Prices are increasing for Colombian visitors, but they are still inexpensive and retailers are definitely gaining a profit. Venezuelans are getting hit with the worst because the prices are increased, which further hurts the VEB. Forex news has not indicated how Venezuela is going to react to this news since even inflation is gaining ground.

Forex News on Recent S. American History

Venezuela used to export goods and have a trade surplus. Now this is all changing because there is no incentive. Consumers are going to the products. Many believe that the neighbours are gaining great benefits, but it is not going to Venezuelans as it should. It is also creating discord in foreign exchange rates. Even things like this forex news can have an effect on an economy and thus the forex market as a whole.

 

 

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Foreign Exchange Melbourne Deal or No Deal

Foreign Exchange Melbourne

No one should tell you what type of broker to choose. No one knows better than you what type of trader you will be. You might enjoy tight spreads or want to pay a commission. On the other hand you might prefer a wider spread that has no commissions and comes directly from a source you trust for foreign exchange Melbourne. Any day trader or scalper will do better with tighter spreads because of the quick and small profits to be made. Paying less with more transactions is a good idea. For someone trading on a longer term a wider spread may be better or no worse than tighter spreads. To help traders understand the differences they will be compared here.

Foreign Exchange Melbourne Comparison of Desks

A dealing desk has the following attributes:
• Fixed spreads (typically)
• Will take the opposite side of any trade you make
• Create artificial quotes
• Brokers fill orders, but do so with discretion

STPs in foreign exchange Melbourne provide these attributes:
• Variable spreads (typically)
• Offer a bridge between clients and liquidity company
• Prices are from the financial institution
• Execution is automatic and no re-quotes happen

ECNs also have features to compare:
• Commissions or variable spreads
• Act as a bridge
• Prices are from providers, with more than one provider being shown
• No re-quotes, but automatic filling for orders
• DOM or depth of market is displayed

The above shows you a clear explanation of the features for each type of dealing/no dealing desk you can choose from. Some things are similar across the board, while others vary greatly. It provides you with a choice of what might fit your style best. Forex brokers are there to help you because they too want to make money in foreign exchange Melbourne. Brokers’ aims are to keep you coming back, thus they have to make a competitive advantage you will be able to accept and enjoy.

Many brokers like to see their clients break even since this means profit for the broker, but without having to pay out on the winning transaction. Since losses mean the client might stop trading it is in the best interest of the broker that a positive reward or breaking even happens. It might seem horrible to read it that way, but forex is a business. If you do more than break even a broker is not going to stop you from trading because they still make money. They want you to keep trading even if you do more than break even.

Foreign Exchange Melbourne Broker Type

Now that you understand the differences it is time to consider what your choice might be. Stock markets deal with commissions that are unchanged between transactions. They can be higher than the pip spread, but not always. A pip spread of 2 on the USD is equal to $2 or $20 depending on the lot size. A 10,000 lot size is $1 USD per pip for the value, but 100,000 lot size is $10 USD pip value. Keep that in mind too.

 

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