Author Archives: chris

What Is the Best Type of Forex Platform?

Best Forex PlatformsThe determination of which forex trading platform is the “best” will of course be subjective. Depending on the type of trader that you are (short term scalping? going long with the trends? highly analytical? In need of the platform to provide your analytics?)  and the type of trading strategy that you use, what’s best for you might not necessarily be what’s best for someone else. It’s a personal choice that has everything to do not only with the platform itself, but also with the forex broker offering the platform in question, and as such, the best type of forex platform for you will be closely tied to the choice of the best broker for your needs.

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How Profitable Is Forex Trading

When considering the profits to be derived, forex trading is no different from any other investment activity which you may choose to undertake. In theory, the opportunity to enjoy profit from your activities is limitless; in practice, however, the net gain that you can achieve is simply a direct function of the investment of time you are willing to make. The more time that you are capable of devoting to research, to constructing your trading strategy and to implementing that strategy, the higher your profits most likely will be.

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How To Use Forex Charts To Forecast Financial Gain

The ability to analyze technical data and to incorporate technical analysis into a trader’s decision making process can be an integral component of the trader’s overall success, regardless of whether he trades in stocks, bonds, derivatives or forex.  In trading, technical data typically is presented in the form of charts, which are used as a means to provide a visual presentation of historical outcomes; understanding how to interpret these charts can give you a leg up in making your forex trading decisions, including the placement of your stop-loss and take profit points.
Many of the charts commonly used in forex will be familiar to most investors: line charts, for example, are utilized to chart either opening or closing prices for a specific currency during a specific time frame. While line charts can be stylized in any way utilizing any time frame that the trader prefers, most forex traders who utilize line charts choose to focus on charting closing prices, since closing prices are deemed to be the most significant. Line charts are an admittedly simplistic tool that when used, for example, to track closing prices, can help the long-term trader to spot trends. In addition to line charts, the well-known bar chart configuration is also used in connection with forex trading, in a manner that describes both opening and closing prices for a currency pair (in other words: the higher the bar, the greater the price movement between the currencies within the charted time period). The usage of bar charts to graph and track currency pairs is, therefore, somewhat more sophisticated than line charts, because it provides the trader with an additional level of information.
The most commonly-used and potentially helpful charting tool for forex trading is neither the line nor the bar configuration but is rather the so-called “candlestick”. Although a candlestick and a bar chart are similar in concept—in, for example, the height of the “candle” representing the currency pair’s opening and closing prices—the candlestick configuration adds extra dimension: the chart includes two “wicks”, protruding from both the base and the cap of the candlestick; the tip of the top wick represents the time frame’s high price, and the tip of the bottom wick indicates the corresponding period’s low price. As with a bar chart, the taller the candle, the greater the price movement during the time period charted. Further depth of information is displayed in the candlestick chart through the use of color: traditionally, if the body of the candle is colored or filled-in, then the currency pair in question closed lower during the charted period than during the previous period.
Candlestick charts are useful to the trader not only because of the multiple layers of information that they convey, but also because of their unique shapes and patterns. Becoming familiar with these patterns and developing the ability to interpret these charts based solely on the patterns displayed gives the trader an edge in making quick, market-driven decisions, particularly if the time period that the trader is mapping is short (for example, 15-minute increments or less); understanding the meanings of different chart patterns allows the trader to interpret historical data and to project future movements based on this interpretation. If you can come to understand the critical signals conveyed in candlestick charts, you can use these valuable analytical tools to help plot your financial gains.
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Autopilot Forex Trading

autopilot forex tradingTrading the Forex market can be done in many different ways. Some people use systems that they have learned out of a book. Some use trading signals sent out by a professional trader to determine when to place trades. Some traders even use a piece of software to put their trading on autopilot. With this strategy, it is possible to leave the trading decisions up to a piece of software so that you can do other things with your time. While this strategy can be beneficial, it also comes with a certain amount of risk.

How it Works

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How to Profit Off the Forex Market

how to profit off the forex marketThe foreign exchange market (Forex) is a high risk, high reward investment platform. It involves trading one currency for another. While there are a lot of advantages to Forex trading, there are some things that require caution. Here are a few tips that should help minimize the risks involved.

Tip 1: Stop-Loss Strategy

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Forex Hedging Strategies

forex hedging strategiesTrading in the Forex market can provide you with good returns, but it also comes with a fair amount of risk. If you are concerned about the amount of risk that you are taking on trading in the Forex market, there are some strategies that you can use to minimize the risk to your trades. One way to minimize risk is to get involved with hedging strategies.

Forex Hedging

Hedging is a strategy that involves taking a position in the opposite direction of a trade that you’re in. This minimizes the chances of a market reversal hurting you financially. In many cases, this can be done by using a pending order in your trading platform.

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How to Succeed in the Forex Market

how to succeed in the forex marketTrading forex is simple. You are simply speculating about the future exchange rates between two currencies, in what is known as a currency pair. For example, in the currency pair EUR/USD (euro versus dollar), if you think the euro will gain value against the dollar, you will buy the pair. If you think the euro will decline against the dollar, you will sell the pair.

When you decide to buy, you purchase a certain quantity of euros while simultaneously selling the same quantity of dollars. When you sell, the opposite takes place. There are only three potential outcomes, the euro can rise, it can decline, or it can remain unchanged. This limited number of outcomes is what makes forex trading simple.

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How to Trade Bullish Flag Patterns in Forex

how to trade bullish flag patterns in forexTechnical traders of all financial instruments like to identify recurring chart patterns that they feel will enhance the probability that they can correctly forecast the direction prices will take in the future. This belief that price patterns on a chart will repeat for any given time frame is what lies at the heart of technical analysis.

Forex traders definitely look for price patterns having such names as 1-2-3 Top or Bottom, Head and Shoulders Top or Bottom, Bear or Bull Flag, Double or Triple Top and Bottom and others that fall into three main classifications as far as whether they indicate whether prices will continue in their current direction, reverse their direction, or form a pattern where they could go either way.

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Interest Rate Parity and Forex Trading

interest rate parity and forex tradingThe subject of using interest rate parity for the purpose of forecasting currency pair prices definitely belongs in the category of fundamental analysis, which implies that its usefulness as a price indicator is primarily geared toward longer term trading. For technical traders, it could be used to provide a long term view of the market, that when combined with one or more technical analysis techniques, could provide insights into price direction that could be valuable to devising a forex trading strategy.

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Tricks of Successful Forex Traders

tricks of successful forex tradersNew, and even experienced Forex traders, are seemingly always on the lookout for shortcuts and tricks that will make them successful Forex traders. The reality is that Forex trading is hard work, so the first trick at which you will need to gain expertise, is persistence.

Persistence simply means discovering what tactics and strategies work best for you and then repeating them over and over. Persistence is good as long as repeated activity produces positive results. Repeating the same mistakes over and over is not persistence, it is stubbornness. Learn to recognize the difference.

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