Review Category : Trading Platforms

Choosing A Foreign Exchange Trading Platform

foreign exchange

The foreign exchange trading platform is the most important thing that you need to trade successfully in this volatile market. The best platform should allow you to perform all the tasks that you want easily. You may be surprised to know that your ability to survive and succeed in the largest financial trading market of the world is largely dependent on your choice of platform.

It is best to do adequate research about the trading platform so that you are able to make an informed choice. You should avoid making a random choice as it can affect your ability to trade successfully and make consistent profits.

Tips for beginners to choose foreign exchange trading platforms

The best foreign exchange trading platform for beginner should be simple and easy to use. As beginners lack knowledge and experience, they should avoid choosing a complicated system as it can affect their ability to trade successfully. Traders should be able to use it for order execution, money management and receiving news. They should also be able to customise it as per their specific requirements.

Irrespective of your experience, you should be able to execute an easy trade so that you are able to grab any favourable trading opportunities available in the market. The trading platform should be able to improve your trading skills so that you are able to handle the complexities of the forex market in an effective manner. The platform should have a user-friendly interface so that you are able to navigate it easily and enable you to place trades without any problem.

The platform that you choose should have strong security measures so that the financial information is safeguarded from hackers at all times. The basic security features that need to be included in the trading platform are encryption codes and firewalls so that you may be able to trade in a safe and secure environment. You may be able to concentrate on your trading when you do not have to worry about the safety of your financial information.

The platform should also have good analytical tools so that you are able to perform technical analysis and choose the best time to place a trade. You should also be able to get real time price information so that you are able to take good investment decisions easily.

Using a demo account to choose a foreign exchange trading platform

Beginners can make use of a demo or practise account to choose the best foreign exchange trading platform as per their specific needs and requirements. It is the best way to test the features and functionalities of the platform that you intend to use for trading. You can also choose to read reviews about the trading platform so that you are able to make an informed choice.

You should also ensure that the broker who provides you the platform is licensed and regulated by the Australian Securities and Investments Commission (ASIC). This ensures that you get the best customer service and support from the brokers.

 

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Choosing the Right Forex Trading Platform

Forex

If you’re new to Forex trading, then one of the first things that you’ll need to choose is your trading platform. Foreign exchange traders will use one of the online platforms offered commercially and often log on several times a day to check the latest market indices, trading results, spread bets and industry news.

Essentially, a trading platform is a software platform that provides real time information between the broker and trader. The forex platform will provide a range of essential information such as charts and quotes and it will provide an interface for entering orders. These will then be carried out by the broker.

The forex platform software can be installed onto the trader’s laptop, computer or even mobile phone for a mobile application. Most can be used with a variety of operating systems, including Windows, Linus and Macs. Each broker will offer a different range of options. Others will offer web-based software, which usually run with Java, which is a dynamical web code.

Web-based forex trading platforms have the advantage of being highly accessible by any device with internet access. The majority of basic level trading platforms are free, but some brokers will offer additional functionalities for a cost. Others will offer different platform levels depending on activity.

Online trading

Online forex trading will use similar security protocols as other online systems. They provide a go-between for the trader and broker. Platforms will provide historical data to traders, as well as real-time data. Access will also be provided to the full range of forex orders available to trade.

A common type of trading software is third-party, thanks to application progamme interface software (APIs), which allow traders to integrate proprietary or third-party add-ons into their platforms.

Questions to consider when choosing your Platform

Find out if the platform is free, or whether there are charges. If there are charges, what extra features do these buy?
What technical indicators are provided in the charts of the system? Can you trade from the charts?

Is the platform based on Windows, internet, Mac or Linux? Make sure the operating system is compatible with your own and that your firewalls and other security settings allow it to run.

Can you access historical data? This is important to establish trends and long-term patterns.

Can you back-test trading strategies? This is an important strategy for new traders looking to develop more sophisticated approaches.

Can you get on with the graphical user interface? Everyone will have their own preferred interface, but generally you want something clean, simple and easy to navigate.

Is there a demo account that you can get to grips with before making a buy decision? Most providers will offer a free demo of their forex trading account so that potential users can explore the features before committing to a sign-up.

Another good approach is to read trading forums and find out which platforms are recommended by more experienced users. It is well worth taking some time to make the right decision with regards to the best platform for your particular needs, as, once you are trading, it will become more difficult to switch at a later date.

 

 

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What is Forex Other Crosses?

What is Forex?

Certain major currency crosses do not fit in the list, so they become other crosses. What is forex here is going to explain this concept to you. Learn what crosses are and why you might care to trade them. Also find out why there are four crosses that fit into an “other” category instead of being listed with USD, Yen, Euro, and Sterling crosses.

What is Forex: Cross Definition

Other crosses are still major currency pairs. These crosses do not involve the USD. You have major USD currency pairs and then major crosses. Major crosses also include Euro, Yen, and Sterling pairings. It leaves four crosses that do not appear in the USD, Yen, Euro, and GBP crosses. As you explore what is forex along different avenues keep in mind that these other crosses might be worthy of trading. These crosses are as follows:
· AUD/CHF
· AUD/NZD
· AUD/CAD
· CAD/CHF

Note that three of these crosses could have been considered Australian crosses, but with so few it was just put into an “other” category. The Australian dollar is often more valuable than the other three currencies, or at least it was historically.

The AUD/CHF might be the safe haven you have chosen when the market turns nasty. The Swiss Franc has a large gold reserve that makes it feel safe. Currency traders tend to hop out of the AUD and into the CHF when the market starts turning for the worse such as no profits on other pairs.

The AUD/NZD pair can seem rather predictable since Australia tends to have better economic stability. However, you should not depend on this and should always study the charts as you learn what is forex.

The AUD/CAD tend to battle for who is more worthy. At times the CAD loses against the AUD making it higher than 1.000, but in the past it has also been worth more than the AUD by being below 1.000. Remember the 1.000 is the base rate in a currency pair, so any quote is always equal to the base’s 1.00.

The CAD/CHF likes to play this game of who can be more valuable too. If you look at the last five years there is a lot of consolidation right around the 1.00 mark.

What is Forex: Other Crosses worth Trading

Rather than explain other currency crosses and what they might be, just note there are some pairs you may want to trade. What is forex is all about the profit you can find by trading money. Certain minor crosses can be extremely volatile, but give way to giant profits.

Still, there are other currencies on the public market that you want to run from. Perception can be a part of your decision. Another way to decide what to trade is based on the market sentiment. Other crosses might be doing quite well because the world is growing without threat of recessions and trouble. More often recession, wars, natural events, and other turmoil is happening thus investor confidence in certain crosses is lower.

 

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Online or Individual Forex Trading Course

Forex Trading Course

If you are thinking about entering the world of forex trading it will be in your best interest to take a forex trading course. There are many nuances that must be understood so that your capital is protected as much as possible. You must ask yourself if you are disciplined enough to learn through an online trading course. Individual forex trading courses might be a little too advanced if you have no knowledge to work from.

Forex Trading Course Two Categories

Trading courses come in a couple of different varieties, but the main distinction is online or individual. You want to be wary of what you choose as it could lead to issues later on. Only the most disciplined of learners can truly handle a forex trading course on their own, which is what most online courses are all about. Online courses are a lot like distance education for college students. You often have seminar style teachings like PowerPoint, demo accounts, and eBooks. For someone with a limited funding source online training might be the best option. You can usually unlock tutorials and articles for free. For a more structured course you might need to pay a small fee. Never pay for a course unless you are certain of its legitimacy. Paying for something that is free does not make sense. What you want to pay for is someone’s time and energy spent on making complicated easier to understand.

Individual training is often geared towards you by the host. It means you pay for the forex trading course that has been designed around your learning capabilities. In some parts of the world these courses can be upwards of $10,000. You even get help on placing actual trades to ensure fewer losses.

Legitimate Forex Trading Course

By now you have the idea that not all courses are going to be legitimate. Add in the fact that you can find a lot of forex details for free from trusted sources or through inexpensive books, and you should be concerned about paying hefty fees. To help you find some legitimate courses there are a few tips shared here.

Look for reputation of the forex trading course. Usually online forums, discussion pages, Twitter, Facebook, and other online communities are quick to tell you about the scams and what not to believe. If you are looking at local courses you still need to conduct due diligence as scams do breed in the seminar circuit. Get to know the host of the trading course by any means necessary.

Certification is also given for proper financial institutions and certain courses. You could look at the regulatory boards like the SEC, Chicago Board of Trade of CME to find a broker that also offers trading courses for your study.

The last caution for how to get the right course is to consider the time and money being spent on the training. Courses asking for a lot of money can also be offering data you already read. The only reason to accept such a thing is if you get hands on training for several weeks.

 

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What is Forex: Buying Money

What is Forex

What is forex has very few definitions. In fact there is only one that makes the most sense. It is the buying of money, in which you trade one currency for another. Greenbacks, Swiss Francs, Kiwis, Rands, Krones, and dozens of other currency names exist. It all comes down to the basic definition that it is something that spends in order for us to buy goods. With the foreign exchange market the goods we are purchasing are just more money at a different value and in a different country. Foreign exchange has evolved from a straight trade of one for the other to an electronic form. We no longer put our hands on the physical money when we trade. Instead, we hold, for a short time, another currency before exchanging it back for the closing of the transaction. Presumably the exchange back is done so with profit.

What is Forex in Terms of Profit

Before you can truly understand what is forex, you have to wrap your mind around the buying and selling of currency which happens at the same time. Unlike the stock market, you buy and sell. Stocks you just trade money for an investment in a company for a certain period of time. When you buy you need to know which currency is going to lead to the profit. To understand this best let us consider a currency pair, for you will always see currencies in pairs as you trade.

DKK/THB is a currency pair. You have the Danish Krone and the Thai Baht. The positions of the currencies in the format DKK/THB tell you two things:
· DKK is the base currency, while the THB is the quote currency
· The DKK is considered the stronger currency

The base pair is always first in the standard format, as well as the strongest. Ages ago when the standard was set by the ISO it was determined that the base currency should be the strongest and first in the pairing name. If you learn nothing from what is forex other than the standard format then at least you are armed to trade with slight success.

The base pair is not always the strongest and it could be the THB in our example is trending for a gain in value.

What is Forex Gain in Value

The gain in value for any pairing is determined by the quote value. The base currency is always 1.00. So, for DKK/THB you have DKK= 1. If the quote is more than 1.00 for the THB such as 4.09, the THB is weaker than the DKK. If the quote is less than 1.00 such as .9999, the THB is stronger than the DKK. What is forex would be remise not to mention that some currencies are always weaker than the base, but they can trend for a gain in value. If the quote was 4.09 for the THB and it went to 3.999 this would be a gain in value. It now takes less THB to make DKK, although you still get fewer DKK when you trade sell THB.

 

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Why Revenge Forex Trading is So Bad

Avoid Revenge Forex Trading

When you trade on the forex market you have to accept that there will be times when you lose on a trade.  There are many traders who do not accept this loss and they fall into revenge trading.  This kind of trading is actually very dangerous because of the mentality behind it.  It is important that you know what revenge trading is and why you should avoid it.  When you understand this you will be able to healthy accept losses that you face on the forex market.

What is Revenge Forex Trading?

There are a lot of traders that do not know what revenge forex trading is.  Revenge forex trading is when you try to get revenge on the market for a loss you have suffered.  This is a very unhealthy way of dealing with a loss on the market.  Traders who complete this kind of trading feel that the forex market has cheated them and they want revenge.  One major problem with this thought pattern is that the market is not actually out to get you.

There are many reasons why a trader may lose money on a trade.  If the trade was done correctly and there were no errors on the trader’s part then it could have been a sudden market change.  There are times when the forex market moves unexpectedly.  At these times the market is not out to get you and there is nothing you could have done to stop the loss.

Why Is This Trading Bad

The main reason why revenge trading is so bad is because you are making an emotional trade.  Any trade that has a motive of getting back at someone is emotion in nature.  This means that you are not thinking clearly when you open the position and you could be taking extra risks that you would not usually use.  These risks generally manifest as excess leverage.

When traders complete revenge traders they are looking to make back all the money the market ‘stole’ from them.  This means that they have to risk more to make up this amount.  A typical revenge trade can risk around half a traders account because of the leverage they are using.  This is something that most traders avoid normally, but as you are emotionally driven you may not think about it.

Another problem that comes about when you revenge trade is that you do not wait for the right time.  When you are worked up you will open a trade on the current market conditions whether they suit you trading or not.  This is bad because you have to wait for the right conditions in order to be profitable.  Trading at the wrong time generally leads to greater losses.

How to Avoid this Trading

It is important that you avoid revenge trading at all costs.  The best way to avoid this is to develop a healthy way of coping with your trading losses.  Most traders will take some time away from the market to calm down after a loss.  This ensures that they are not making emotional trades and they have time to analyse what their next step will be.

 

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Forex Strategies that Scale In or Add to Losses

Forex Strategies That Add To Losses

When you are looking to increase your profits from a single trade you may want to use scaling in forex strategies.  However, when you use these forex strategies you have to consider whether you are simply adding to the loss.  When the price moves against your trade you may consider scaling in to make a profit.  When you do this you are waiting for the market to turn back so you can make a profit.  However, the reasoning behind this trade could now be emotional and this is not a good type of trade.  You have to consider if what you are doing is really scaling in or just adding to your losses and revenge trading.

Using the Scaling in Forex Strategies

Before you can consider if you are adding to your losses you have to know what scaling in forex strategies are.  Scaling in uses a scale order which includes a number of limit orders that incrementally decrease or increase the prices.  If you are working with a buy order then the limit orders are going to decrease the price.  If you are working with a sell order then the limit order increases the price.  This allows the trader to take further advantage of the prices and make a greater profit.  This strategy works well when you have a winning trade, but it can cause a margin order if you attempt to use it on a losing trade.

Are You Going to Add to Your Losses?

The turning point of scaling in to adding to your losses is very fine and you need to know this.  If you use the scaling in strategy on a losing trade then you are adding to your losses.  While the identification of this error is easy stopping yourself from doing it may not be.  This is where trader discipline is needed as adding to your loss is a form of revenge trading where you try to make the money you have lost back.

Some new traders may see other more experienced traders talking about scaling in and making a profit on a losing trade.  This is a form of the scaling in strategy but has to be very carefully done.  There is also a large risk involved with this strategy that new traders should stay away from.

Understanding the Entry and Exit Points

It is important that you have very clear entry and exit points when you open your position.  When these points are reached you need to stick to them.  This is the only foolproof way that you could avoid adding to your losses.  Of course, if you are using the scaling in strategy then you should also have clear entry and exit points.  All scaling strategies do have an ultimate stop point that the trader sticks to.

Scaling is a popular strategy used by traders who are buying into the retracement of the broad currency trend and they are unsure how deep the trough will be.  These traders will scale down the position to get the best average price possible.  The difference between this and adding to the loss is that these traders do have a clear stop point.  Traders adding to the loss do not have a clear stop point and often only stop when a margin call is placed on their account.

 

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Getting Forex Signals from Technical Patterns

Forex Signals Patterns

When you trade on the forex market you will be able to use a number of different methods to analyse the market.  You need to analyse the market to ensure that you get the forex signals you need to trade with.  If you do not have the right forex signals to trade with you are not going to be profitable on the market.  One of the analysis methods that you are able to use is forex chart patterns which are also known as forex price patterns.

The Pattern You Are Looking For

When you look for forex signals you have to consider which of the chart patterns you are looking for.  There are a lot of different patterns that you can use.  All of the patterns that you have will fall into one of two categories and they are reversal or continuation.  There are also a number of patterns that are more common than others and you should consider using these patterns.

What Forex Signals Do You Get?

Looking at the patterns on the charts will offer you a number of different forex signals.  The signals that you get will depend on the type of patterns you are going to be using.  If you are looking at a reversal pattern then you are going to look for signals that break the trend that is already on the market.  If you are looking at a continuation pattern then you are looking for a signal that tells you the trend you are looking at will continue.

The Duration of the Pattern

When you analyse forex chart patterns for signals you have to consider what their duration is.  Some of the chart pattern you find will only cover a handful of the bars in the charts.  However, there are others that take a while to fully develop.  This will depend on the pattern you are looking at and what you are looking for in the formation.

There are many traders who feel that long-term chart patterns will be more reliable than the short-term forex chart patterns.  This is due to the depth of the pattern and the movement.  When you look at the long-term chart patterns you are more likely to get a larger movement on the market.

Interpreting the Pattern

When you look at using patterns in the chart for analysis you should know about the 3 steps to interpreting the patterns.  The first step is to identify the chart pattern.  There are a lot of traders who feel that this should be easy, but there are times when the patterns are not very easy to determine.

The second stop is to evaluate the pattern.  When you evaluate the pattern you have to consider the duration, volume and volatility of the price action in the market.  By evaluating all of this you will be able to determine whether or not you should be trading on this pattern.

The last step in interpreting the forex chart patterns is to forecast what is going to happen in the future.  A lot of traders will combine this analysis with technical indicators at this point.

 

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Forex Trading Without Time

Forex Trading Chart

Many people who look at forex trading, but feel they do not have the time required to do this correctly.  While this is generally true there are a number of ways that you can trade the forex market with limited time.  To do this you have to consider how much time you have to trade, if you have the time to trade and the forex trading strategies you can use.

Finding time for forex trading

When you first consider forex trading you should think about when you have time to trade.  There are a lot of people who want to trade, but work a full-time job.  These people often think that they cannot trade because of their job.  However, they often have enough time to trade that they do not realise.  If you are working a full day you will have some free time from 7 in the evening in most cases.  This means that you have a number of hours available for trading.

If you do not want to spend your entire evening trading then you can consider some alternatives.  There are trading strategies that require five minutes throughout the day.  There are also other strategies where you only need 1 hour a day to trade.  Finding this time is often easier than a large block of free time.

Forex trading on limited time

Once you have determined when you have the free time to trade you have to consider what the market is doing.  As the forex market is open 24 hours during the week you have a lot of time available to trade in.  Of course, you have to consider what market session you are trading in and the currency pairs that you can use.  The currency pairs that you use when trading with limited time should be confined to the most commonly traded pairs.  These pairs are good for new traders and do not require as much work to trade with.

There are four market sessions that you can trade in.  You have to determine which session your trading hours fall into.  This can affect which commonly traded currency pair you use.  If your trading time is in the Sydney sessions then you should look at common currency pairs with the Australian dollar.

Limited time forex trading strategies

There are a number of strategies that you can use when you trade with limited time.  There are two timeframes that you can trade in and they are short and long. With long-term trades you do not have to spend a lot of time each day on them.  Once you have opened one or two long-term positions you simply have to check each day that they are still going well.

There are a few short-term strategies that you can try.  Scalping throughout the day is one strategy that you can use.  Of course, you will need to have access to the forex market during the day and know a couple of chart patterns to look for.  You can also use short-term trends to trade with for an hour during the day if this is the time you have available.

 

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How Foreign Exchange Rates Can Change To Your Benefit

Before you start trading foreign exchange rates, spend as much time as you can studying technical analysis. Technical analysis is the art of translating pricing patterns into meaningful lines, bands and channels that can help you see where a profit might pop up and tell you where to enter (and exit) a trade. The most popular technical tools are moving averages, particularly 10-period and 20-period configurations. Simple averages are not that time sensitive; smoothed averages are more so; and, exponential averages are the most. For analysing trends longer than 1 hour, simple or smoothed averages will do. For shorter time frames – such as the kind that “day traders” use – you need to deploy exponential averages.
Finding a trend isn’t that hard to do, particularly if you deploy a “Zig Zag” indictor on a monthly or weekly chart first. Then, check the volatility inherent in any trend by placing a pair of “Bollinger Bands® “ or “Keltner Channels” or “Donchian Channels” on a daily or 4-hour chart.

Going Long or Short Means You Can Profit From Foreign Exchange Rates

One of the biggest mistakes that newbies make is not correctly identifying long-term currency pair trends before trading. Always check the monthly and weekly chart of any currency pair – before you trade. Use a Zig Zag indicator. It’s great for seeing reality clearly (and can work, reasonably accurately, all the way down to the 4-hour chart level). Some traders also use Bollinger Bands®, Keltner Channels or Donchian Channels to see ongoing trends. Of the 3, a Keltner Channel indicator may be the most useful, as its math formula is extremely sensitive to volatility patterns and it does not “lag” as much as the other two. A “Know Sure Thing” indicator, for confirming any trade signal, is a powerful tool.

Foreign Exchange Rates Markets Can Increase In Value

When a very positive economic event occurs or a significant change in central bank monetary policy increases interest rates, the price of a currency pair can increase dramatically. For instance, if you look at the monthly chart of the AUD/USD, you can see that, starting in 2001and ending in 2011, the pair doubled in value. This was due – in part – to a giant Chinese industrial vacuum cleaner sucking up Australia’s natural resources at unprecedented rates (and prices). Small wonder, then, that the nation’s interest rates went 3% (in 2001) to almost 5% (in 2011), providing a wonderful “carry trade” for many an international investor. Could it happen again? Yes – around 2020 – when Australia becomes the world’s largest LNG exporter.

Foreign Exchange Rates Markets Can Decrease In Value

Events can also go against currencies, as the last 5 years of EUR/USD history sadly indicate. One would think that a currency drop from EUR/USD 1.6000 to EUR/USD 1.2000 would inspire a surge of export activity. However, with the possible exception of Germany, that doesn’t appear to be the case. In fact, the last 5 years have been rather horrible. According to EuroStat, GDP (“Gross Domestic Product”) for all 28 countries in the European Union in 2007 was 3.2% per annum, but by the end of 2012, it had decelerated down to a rate of -0.4% per annum. Viewed in this light, one cannot help but wonder if the European Central Bank’s monetary policies, of late, are not somewhat misguided.

 

 

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