As we know, the forex market offers different traders different opportunities for trading at different levels. Some traders work their luck by making short but frequent investments while others make rare but huge capital investments. Overall, if you wish to become a full-time trader, then forex is a profitable and exciting way of trading at a global level. The spot market is present in the forex as the most prominent market. The reason it is called the spot market is that trades are settled immediately in it as they say “on the spot.” Needless to say, you need to know the fundamental and technical analysis to become a full-time trader. full-time is a skill honed by the best broker for forex trading.
The Positive and Negatives
Forex also comes with several risk factors. It is vitally crucial that you thoroughly understand the implications involved in margin trading and the particular pitfalls and opportunities offered by foreign currency exchange trades. As a coin as two phases, the forex also comes with a beneficial side as well. There are unique benefits associated like 24-hour trading, the global reach of forex and the vast number of traders to deal with. You need to understand how trade works and trends involved in the rates of currency pairs. This means that before you try entering into a trade, you need to keep calm and work your strategy with a patient yet sound mind. Being possessed by fear and greed will ultimately lead to your downfall in the market of currency exchange trading.
Fundamental and analysis of forex trading course
The spot makes you accomplish success. The first one is technical analysis that focuses on price patterns and uses charting to differentiate them from one another. It also focuses on price action and trends that are changing the behavior of the market. It offers several various indicators that help in recognizing and combining pattern reorganization using your desired indicator while making a trade. It should that that there is no need to use a large number of indicators. In normal cases, 2 or 3 indicators are adequate, more importantly when you are combining them price patterns accordingly.
Forex Trading Software and Indicators
Forex indicators are easily available with most trading software. Such software follows the patterns and carries out all required calculations automatically. The only issue with trading indicators is their lagging price ranges and the fact that when you look at your chart, you are able only the brighter side which makes you eager to witness further happenings in the trading market. The other side of the chart is left untouched. This side is, in fact, the bigger picture which helps you in making 65a proper analysis and strategizes risk management. A perfect chart is regarded as priceless if it aids in identifying a perfect opportunity.
Technical analysis of Forex Trading Training
Technical analysis also involves momentum analysis which is a measure of alteration in forex trading trends over a specific period of time. Certain momentum indicators are capable of identifying if a currency is sold too much or overbought. These tools are common but they prove to be highly useful in overall technical analysis.
Fundamental or Technical – Which one is better?
Talking of the second most important strategy, we will shift roads from technical analysis to fundamental analysis. Fundamental analysis recognizes price behaviors as a product of economic and political events. It involves the combination of economic data, critical political news and different social issues that can cause a change in currency prices. Furthermore, fundamental analysis keeps you aware of interest and employments as they are the major economic data factors that can decide the movement of the market substantially.
Trading by taking the help of fundamental analysis can be very useful and effective in forecasting economic conditions. However, no analysis can ensure the exactness of market prices. You can learn analysis by starting to learn about forex trading and investing.
After reading this information, it is not a necessity to fill your mind with too much information. Keep in mind the best way to trade is to keep it simple. It is very important to understand the basic importance of fundamental and technical analysis so that you can use them effectively while trading in forex. After doing this, you shall be a successful full-time trader for sure. You may also look for the trading courses for beginners to know more.
Whenever you try to enroll for a forex trading course for beginners, you might come across the term pips. To know about their importance and dwell deeper into the details, we have to know what they are.
So, Pips in forex are a unit of measurement that is used to explain the currency change in the world of trading. Lets, take an example- if USD moves from 3.512 to 3.513, the 0.001 USD rise is a value equaling to one PIP. It is the last decimal place when quoting a price.
The value of these tiny changes may vary. It usually depends on what your lot size is when you are trading either with a forex mentor, or yourself. Usually, the difference in the pips between the ask and bid is called the spread. This spread value is the value of how your broker makes money. Most of the best broker for forex trading refrain from collecting an official commission and use pips to gain it, hence justifying its value.
If you are trading in the forex market, you should always calculate your profit in terms of pips. If your trade is positive in pips, you are making a good profit. If the pips are negative, you might be going down the drain. Various forex brokers also do fractional pips progression trades.
The fractional pips use even tighter control over your losses and profits. These also offer flexibility on spreads.
Pip Value changes
The Pip value change usually is determined by the base value of your account. This applies to several currency pairs. Let’s say you open an account dominated by USD. Your currency pair is the U.S. dollar and is the quote currency in the account. The pip value will be $ 1 on the mini lot. You can easily see the changes in the pip value in the U.S. dollar as it shall change significantly by more than 10 percent, either way. If the U.S. dollar is not involved in the pair, for example, say EUR,
The base value will determine the pip value of many currency pairs. If you open a USD-denominated account then Forex currency pairs where the U.S. dollar is the second currency, the pip value will always be $1 on a mini lot. You would only see changes in the pip value if the USD changed significantly by more 10 percent up or down, and if the USD is the base currency or is not involved in the currency pair, such as in EUR/GBP.
PIP relevance during the hedging
Hedging is a position when you become free from risk as a widening spread eats in both positions. Or in simple words, you come in a win-win situation. Many traders or brokers have faith that they will be in a risk-free position when they are hedged.
However, when you face an aggressive event when there is a large change in a currency such as the Swiss National the CHF into the euro, the difference between the bid and ask can widen. And it can go up to more than 100 pups in liquid pairs. This is also possible in case of massive aftermath such as that of the EU referendum leading to Brexit.
As one can easily notice, pips have great value. Well, every aspect has value and importance in the Forex trading world. We can’t ignore even a single of them. And pips have a great value to justify them. Many forex trading training videos make it a point to explain the novice, the features, and the importance of these pips. If you master these tiny details, you can ensure your success rate in the volatile trading market.
Being the biggest trading market in the world, Forex is being affected by many factors. It is important to understand each one of the fundamental factors of Forex that cause fluctuations in foreign exchange from day today. These are also explained in the trading courses for beginners.
The Forex marketchanges depending on some economic factors that play a major role in the movement of currency. These economic factors and indicators are released by the government or by private firms that are capable of looking in-depth at the economic performance of a trade. They can be used to analyze economic performance from any major country. The economic reports are useful in measuring a country’s economic health along with government policies and current events.
Current events and state of the economy are major economic indicators that are used when analyzing forex. Factors such as unemployment numbers, housing statistics and the current state of the country government can lead to changes in forex. Whenever a nation is feeling positive about the current state of affairs in their country, prices of forex are going to reflect this positivity. Similarly, when the nation is experiencing political unrest, large amounts of unemployed workers and inflation, the rate of currency will again be reflected. This indicator serves as an important gauge in determining the fluctuations of the forex.
The next important factor in our list is gross domestic product or GDP. It is considered as the widest and broadest measure of the economy in a given country. The gross domestic product represents the total market value of all goods and services that are normally produced in a country. This is measured in an annual time frame, rather than measuring weekly or monthly. Using a larger time period gives better statistics of the products and services produced in the nation. It is important to note here there that GDP is never used solitarily for forecasting forex. It is an indicator of lag which denotes that the factor is a measurable value changing as soon as the economy as began to follow into a certain trend.
Industrial production report
Another economic indicator reliable in the world of the foreign currency exchange market is the industrial production report. This analytical report displays the fluctuation in productions among various industries such as factories, and utilities. The report throws light at real production in relation to the maximum production capacity potential over a given period of time. When a country is producing at a maximum capacity range, it positively influences the Forex and is that time is thus, considered ideal for traders.
The CPI or consumer price index is another very critical economic indicator in analyzing the Forex market and its trends. The CPI is the measure of the change in the prices of consumer goods in approx. 200 categories. This report tells us whether or not a country is making or losing money in the ongoing business of their products and services. The exports that a country possesses are very important when looking at this indicator because the number of exports can truly reflect a currency’s flaws or its power. This is also true when you are learning the forex mentorship by undergoing various forex trading training programs.
In the end, it should always be kept in mind that forex is influenced by many economic factors. These fundamental factors of Forex once understood, are simple to follow and apply. Most of them follow a certain trend and understanding the work of each factor is vitally important in understanding the trends of the foreign exchange market. Some are good indicators when used alone while others should be used in conjugation with some more indicators to carry out a successful and effective prediction of the forex market.
A Forex currency pair in Forex Market is the selection of the relative value of a particular currency unit against another currency unit. In other words, the value of a currency is determined by comparing its value to another currency. The first part of a currency pair is termed as “base currency” and the second pair is called “quote currency”. The Forex Currency Pairs determines the amount of money required to purchase one unit of the base currency. This is the reason why best broker for Forex trading considers Forex pair as the main aspect of their career.
Currency pairs in terms of trading
All Forex trades include the simultaneous buying of one currency and selling of another, but the currency pair itself can be considered as a single unit or an instrument that is bought or sold. If a trader buys a currency pair, he’s buying the base currency and is eligible to sell the quote currency. The bid prices determine how much of the quote currency is needed for you to get one unit of base currency. On the other hand, when you sell the currency pair, you sell the base pair and receive quote currency. The selling price for the currency determines how much you will get in the quote currency for selling one unit of base currency.
For instance, if the USD/EUR currency pair is quoted as being USD/EUR=1.5 and you purchase this pair, it means that for every 1.5 Euros that you sell, you are receiving US$1. If you sold the currency pair, you are going to receive 1.5 Euros for every US$1 you sell. The converse of the currency quote is EUR/USD, and the equivalent price would be EUR/USD =0.667, which means that US$0.667 would buy 1 Euro.
Most common currency pairs
There are only a handful of Forex Currency Pairs used in today’s trading market. These are ones most talked about in various Forex trading trainingcourses for beginners.
In the Forex world, only the most economically stable and liquid currencies are demanded in sufficient quantities. For example, due to the size of the potency of the United States Economy, the American currency i.e. dollar is the world’s most actively traded company.
In general trading market, there are 8 main currency pairs that are popularly used. These are:-
S. Dollar (USD)
Canadian Dollar (CAD)
British Pound (GBP)
Swiss franc (CHF)
New Zealand Dollar (NZD)
Australian Dollar (AUD)
Japanese yen (JPY)
Following a successful trading strategy, currencies must always be traded in pairs. There are 27 different currency pairs that can be derived from these 8 currencies alone. However, there are about 18 popular currency pairs that are conventionally quoted by Forex market makers or brokers as the result of their overall liquidity. The total amount of currency trading that involves these 18 pairs represents the majority of the trading volume in the Forex market. Such a manageable number of choices make trading, a lot less complicated compared to dealing with equities that have thousands of possibilities to choose from.
When to trade currency pairs
Generally speaking, the best time to trade a currency pair is when it forms a strong and sharp signal in the trading market. There are basically three sessions in the Forex market:-
London session- 8am to 4am GMT
New York session-8am to 4pm EST
Asian session-7pm to 3am EST
The Forex market has the maximum vitality during both London and New York session that is the time between 8am to 1pm EST. After 4 pm the Forex market slows down, but soon after a few hours, Australia and Japan come into the game and Forex market becomes volatile again. Summing up with the perfect time for trading currency pair question, the only answer lies in the fact that when the Forex market is active and volatile, all currency pairs are on the move no matter what session is going on. One can easily trade a currency pair when the market is moving and there is a Forex signal.
One can easily enroll for Forex scalping course or take help of trading courses for beginners to learn more about pairs.
As we all know, the benefits of Forex trading come several risk factors as well. Management of risk is one of the most important aspects of successful trading management. In reality, Forex involves a business making process; one needs to learn how to manage the business to prevent continuous loss. This is also visible in various Forex trading training and Forex videos revealed by Forex trainers. It is a fact that risk management is one of the most overlooked areas in the trading market. Many traders just concentrate on getting their trade in the right position with no regards to their total account size. They simply get into the trade after determining the amount they can lose in a single trade.
While trading in Forex, the investor has chances to multiply his money; however, he also risks his trade with the chance of losing future profit and invested capital. The extent of deviation from expected profit average determines investor’s risk factors in the financial market. Methods of risk management are applied earlier and after trading opening positions. Generally, risk management is incorporated to reduce losses and prevent future damages.
Controlling risks with stop loss
It is only fair to place a protective stop-loss for every open position in the Forex market. Stop-loss is pointed when the trader leaves the market to avoid unfavorable loss situations. When you plan to open a position, you should always make use of stop-loss to insure against extra losses. Every successful trading strategy involves a disciplined procedure for cutting losses. When a trader gets lowered down on a position, many emotions come into play, making it difficult to cut losses at the right level. Stop-losses helps a trader to control his high paced mindset after a loss and makes him decide his next step with a peace and sound mindset. The best practice is to decide where losses are going to cut before a trade session is even initiated. This assures the trader about the maximum amount he or she can expect to lose on the trade and make him or her mentally prepare to face financial loses.
Risking a tolerable amount for future crisis
To manage invested and earned funds well, you have to decide and keep in mind the total amount of money that you can afford to lose in the current opening positions. In other words, you should be ready with a reserved amount of money in case the trade goes negative from your projected direction. For example, you assumed that for every open position, you have risked your money 3%, 6%, or 8% with respect to the total fund. By doing, so you have kept in mind the price prior to the execution of the trade and the higher amount that can ever go out of your hand on singular trading position. Here, you have also taken care of surprises and uncommon emotions that you would have faced with immediate loss news.
Revaluating the risk management strategies
Another key element of the risk control process is an overall account of risk. This method includes the calculation of key factors like at what point you will stop trading if the market is going against you. In such times of crises, it is important that you re-evaluate your strategy. You should prepare yourself as to when and where you have to stop investing. Is it when you lose 30 % of your money off when you lose 50 %, or when you lose your entire invested money? One should access his market through perfect analytical methods and check if there is need for any further perfection or any alteration to be done for the betterment of your risk management plans. Another important thing to note here is that risk management goes in hand in hand with fund management. If you are able to manage your funds properly, you are equally reducing your risk factors. Similarly, if you control your risks well, you are equally able to protect your funds. You can also look for the Best Forex training courses 2019 and related websites to get more knowledge about risk management techniques in trading.
Forex or Forex currency exchange, as we know is a business term which involves traders and currencies of different countries. The general observation of a common man shows that in the foreign exchange market, every person involved in the business of trading of currency is a person who possesses a superb IQ and is exceptional in studies and academic knowledge about Forex. It is common fact that whenever we hear words and phrases like liquidity ratio, central bank intervention and inflationary demand, we feel like we are back in our college life and we start overthinking about loses and fixtures. However, keeping aside all these preconceived notions, Forex or currency trading is the domain that is exclusively built not for super-intelligent of nerds alone, but for everyone. And you should stop overthinking right now and start trading with confidence.
In earlier times, the Forex market and Forex trading course were not supposed to be open for individual investors. In order to initiate the processes of buying and selling currencies in Forex, you either had to be a big bank with lots of cash and assets under your belt or you had to be a big financial organization that carried out the business of trading in Forex as its primary and foremost activity. On the other hand, in today’s technology-driven world you actually don’t need a lot of capital to earn money in currency trading. A sum of a few thousand dollars is sufficient as the initial capital to get you started in this spectacular trading world of Forex.
There is no doubt that you need innovative ideas and sharp brains to get involved in Forex trading market. But this certainly doesn’t mean that only geeks can prosper in this trading market. There is not a single sphere of human activity that does not need the application of one’s mind. A bit of brain and a large amount of research can help you make a tidy sum in the process of currency trading.
The advantages of trading currency in Forex are manifold and this allows even a normal citizen to try his luck in this market. The biggest benefit is that the currency trading market remains open round the clock for 5 days a week. No other financial market stays operational twenty-four hours a day. This round the clock functioning has resulted in regular and immediate reproduction of economic, political and social events. Any investor or a Forex mentor with a sound mind can take advantage of the fluctuation to make huge profit gains in the Forex market. Furthermore, the Forex market works without any centralized exchange procedure. This means that there exists a direct interaction between the persons involved in currency trading over the telephonic or virtual electronic network.
It might seem quite easy to enter the currency trading market but it does not mean that it is easy to make a profit in this market. It is vital to hold the knowledge of the Forex market and its various aspects that revolve around your trading carrier. One needs to grasp and establish your command over basic concepts. A trader needs to understand the significance of the technical indicators of the functioning of the Forex market. By gathering a judicious combination of knowledge, susceptibilities and risks, a trader can make a huge amount of money in the foreign exchange market that too with the help of very less amount of initial investment. On the other hand, trying to gain complete knowledge of the currency market without actually entering into the field will be like trying to learn swimming without even entering into the water. The best practice is to stop searching for Forex Holy Grail that does not even exist and put your faith in a sensible Forex trading system. Stop overthinking and start trading. You might also look for various videos or courses offering various information on Forex trading for beginners. Good luck.
IC Markets True ECN trading environment allows you to trade online on institutional grade liquidity from the worlds leading investment banks and dark pool liquidity execution venues, allowing you to trade on spreads from 0.0 pips. You can now trade along side the worlds biggest banks and institutions with your order flowing straight into our true ECN environment.Trade in a true ECN environment with no dealing desk or price manipulation. IC Markets is the online forex broker of choice for high volume traders, scalpers and robots.
For USA & Canada clients i recommend FXChoice which is also a very good broker.