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Forex Trading Tips
The Forex Trading Tips
Forex trading is a highly complicated task, these are some trading tips from FxPros.net
Forex Trading Tip 1:
“Know what you are trading”
The behavior of all Forex pairs is not the same. Some currency pairs are much more volatile, and trend very aggressively, compared to other pairs. Furthermore, currency pairs trade in seasonal patterns. For example, during April, the British Pound against the US Dollar tends to appreciate more than 80% of all times.
Table: Forex Currency Pairs & Volatility
|
HIGH VOLATILITY |
MEDIUM VOLATILITY |
LOW VOLATILITY |
|
EUR/AUD, EUR/CAD, AUD/USD, NZD/USD, USD/JPY, USD/CAD, EUR/JPY, CAD/JPY |
EUR/USD, GBP/USD, AUD/JPY, USD/CHF, |
EUR/GBP, EUR/CHF |
» FxPros Research on Forex Market Volatility during 2000-20013
Knowing the special features of each currency pair can really make the difference. That is why it is better to trade a couple of Forex pairs than 8-10 Forex pairs. Knowledge is power when trading Forex.
Find the most complete Forex Trading Guide in the web: » Forex Trading Guide at FxPros.net
Read more: Forex Trading Tips
Forex FAQ for Traders
Forex FAQ
What is the Foreign Exchange Market?
The Forex (Foreign exchange) market is a giant and a highly liquid financial market operating 24/5. The Forex market is a 100% decentralized market that is based on the Electronic Network of the banks (ECN). World currencies are traded within Forex in pairs and it is estimated that the daily volume activity in Forex today is reaching 4 trillion USD.
What is a Currency Pair?
A currency pair includes two currencies that indicate an exchange rate. For example the currency pair EUR/USD. The first quote of the two pairs (EUR in the example) is called the Base Currency. The second quote in the pair (USD in the example) is called the counter pair. All currencies are indicated with specific symbols, here are the most popular symbols:
- USD is the Forex symbol of US Dollar
- EUR is the Forex symbol of Euro
- GBP is the Forex symbol of British Pound
- JPY is the Forex symbol of Japanese Yen
- CHF is the Forex symbol of Swiss Franc
- AUD is the Forex symbol of Australian Dollar
- CAD is the Forex symbol of Canadian Dollar
- NZD is the Forex symbol of New Zealand Dollar
The most popular currency pairs are EUR/USD, USDJPY, and GBP/USD. Why popular pairs are important for traders? Because popularity means liquidity, and liquidity means narrower spreads. The magnitude of the spread defines in a high extend the profitability potential of any Forex trader.
Read more: Forex FAQ for Traders
Forex Market Statistics
The Forex Market General Statistics
The Forex Market is a decentralized OTC (Over-the-Counter) financial market. Forex is running 24 hours per day using the electronic network of banks (ECN). It is estimated that the Forex turnover today may exceed 4 trillion dollars per day. Forex volumes are generated mainly from speculators. It is estimated that 90% of the Forex trading volumes are generated by speculators (day-traders).
Forex Market Structure
The global free-floating Forex currency system started in 1971 as the Bretton Woods agreement ended. The online Forex trading market started in the late 1990s. Forex is an open 24-hours market {Sunday 5pm (EST) - Friday 4pm (EST)}. Forex Trading starts in the Asia-Pacific and continues in the Middle East, in Europe, and in the US.
The Most Traded Currencies
The US Dollar is traditionally the most traded Forex currency in the world (85% of all Forex transactions). The Euro is the second most traded Forex currency (39% of all transactions and the Japanese Yen is the third most traded Forex currency (19% of all Forex Transactions). Each Forex transaction involves 2 pairs so the grand total of all transactions equals 200% and not 100% as in every other financial market.
Read more: Forex Market Statistics
Choosing Professional Forex Brokers
These are some very important factors that every trader should consider before opening a new Real Forex Trading Account.
Here are the 5 factors at a glance:
(1) Suitability of the available trading accounts (lot sizes, minimum deposit, etc.)
(2) Cost of Trading (trading spreads & commissions)
(3) Margin Policy & Rollover Rates
(4) Execution Efficiency & Technology
(5) Safety of Funds & Regulation
Each of these 5 crucial factors is divided into a number of sub-factors, as follows. Here is an Analysis:
(1) Suitability of the Trading Account
1.1 What is the minimum deposit required to open an account?
Usually, the minimum deposit for opening a simple trading account is from $10 to $250. ECN accounts require a higher initial deposit, usually $250 to $2,000.
1.2 What are the available Deposit / Withdrawal Methods?
All brokers support Bank Wire and Credit Cards. Some brokers support also internet wallets such as Paypal, Skrill, Neteller, etc). Another issue is if the Forex Broker allows you to withdraw money using the same method only as of the one you have selected when deposited funds.
Read more: Choosing Professional Forex Brokers
Forex Trading Guide
Forex Traders Guide -Forex Trading Briefly Explained
They say that beauty lies in simplicity but unfortunately this is not true when Trading Forex. If you are seeking for something simple to trade you are probably in the wrong place. Online Forex trading looks easy but actually is the most complex type of trading in the world. There are hundreds of fundamental and technical variables, changing 24hour per day. So Forex is certainly not a toy, although it is advertised by brokers as one.
Forex Trading Preface
Forex is the place to trade global currencies. Currencies are basically exchange mechanisms used for the global trading of goods and services. Importers and exporters, large corporations, investors, and banks are only some of the participants in the Forex Market. The Forex market operates like the internet, it is not centralized, and it exists in the electronic network of banks. Forex is a huge market with a daily activity turnover worth more than 3 trillion USD. The Rules of the game in Forex are different from those in stock-trading or of those of any other classic form of trading, but many similarities can be found too.
This article aims to uncover all major Forex fundamental aspects in order to achieve a successful long-term trading experience.
Read more: Forex Trading Guide
Forex Trading Glossary
FxPros.net -Forex Trading Glossary (A-Z)
A
ADX is a technical analysis indicator measuring the strength of a trend.
A currency is appreciated when it earns value against another currency. This may be due to fiscal or monetary developments or simply due to market psychology. A monetary policy aiming for domestic currency appreciation is called a “Hard-Currency Policy”. The opposite situation is called a currency depreciation.
Arbitrage is a short-term trading type that aims to take advantage of market inefficiencies. That means buying an asset in a particular market and at the same time selling the same asset in another market.
Ask means the price that you may buy a financially traded asset and bid means the price that you may sell it. ■ Example: Buying at 80.00 (bid) and Selling at 80.02 (ask)
Aussie is a slang name that is used for the Australian dollar (AUD).
B
Bank of Canada is the Central Bank of Canada responsible for the Canadian monetary policy.
Bank of England is the Central Bank of England responsible for the UK monetary policy.
Bank of Japan is the Central Bank of Japan responsible for the Japanese monetary policy.
Balance of Trade measures the difference between the value of imports and exports of a country for a particular time frame (usually monthly or annually). When the outcome is negative Trade Deficit is created and when it is positive Trade Surplus is achieved.
A Bank rate is the interest rate charged by the central bank of a particular country when it lends capital to the domestic commercial bank institutions. It is used by central banks as a tool to control money supply in the economy.
A Bar Chart is a very popular chart type where prices are indicated as bars and lines.
In a currency pair, the base currency corresponds to the first quote.
Bear or the Bearish market is a market that is expected to trend downwards.
The Beige Book is a collection of US FED (Federal Reserve) reports containing important reviews regarding the US economy.
Breakout is a technical analysis term describing the breakdown of a trend below support levels or above resistance price level. When a breakout occurs usually traders react nervously and the result is high volatility and high liquidity.
A broker is the market participant who operates as the middleman between traders and commercial institutions. A broker may execute buy and sell orders on behalf of his clients charging a predefined commission. » Compare Forex Brokers using the Rating Formula v4.0
Brokerage is the act of buying and selling financial assets on behalf of third parties.
Bull Market or Bullish Market is a market that is expected to trend upwards. The opposite is a bearish market.
Bundesbank is the Central Bank of Germany. As Germany is a member of the eurozone, Bundesbank is coordinated with the policies of the European Central Bank (ECB).
"The Best Fx Professionals around the Net.. at FxPros.net"
Joining a Forex Trading Rebate means earning money from trading volumes.
Rebates are considered better incentives than bonuses as they incur a long-term benefit for traders. More at Forex-Rebates.com
Forex Robots Web-Sites
They say that beauty lies in simplicity but this is not true when Trading Forex..
Learn more...
Review Trading Systems:
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Forex Historical Statistics:
Important Forex Trading Tips
1: Trade Forex at the Right Broker (best ECN / STP)
2. Know What you are Trading
3: Lean about Important Upcoming News
4. Identify and Respect Support & Resistance Levels
5. Use always a Stop-Loss and Respect Support Levels
6: Follow the Trend or Trade the Range (Choose Wisely)
7. Adjust your Leverage according to the Current Market Volatility & Liquidity Conditions
8: Execute only Trades Worth the Risk (High Profit / Loss Ratio)
9. Choose Trading at Times When the Trading Cost is Minimized (Tight Spreads)
10. Run your Profits and Cut your Losses (Statistically the best Trading Strategy)
