Don’t let yourself be misled by the use of the word “indicator”: market economy indicators are not the same analytical indicators utilized by traders, such as stochastics or moving averages, to plan their market entry and exit points and confirm their hunches, but rather, market economy indicators are bits of economic data and information released by governments and private sector interest groups which summarize various aspects and facets of a nation’s economy and as such, serve as a reflection of the given country’s economic health, wealth and prospects. The release of these indicators has a significant impact on the forex markets both in terms of substance as well as in terms of timing and in fact, play a major role not only in forex pricing but in forex forecasting, forward trading and the pricing of forward forex options as well.
If you ask 100 forex traders to provide you with some measure of insight into their trading strategies and secrets, it’s a given that you’ll receive an equal number of answers. Each may have their own preferred or “secret” strategy, or combination of strategies, in their arsenal of forex trading tools, yet forex traders are a surprisingly friendly, helpful and egalitarian lot and as such, most traders are happy to share their secrets in the hope of picking up a new trick or two, or of helping a fellow trader to improve his returns. Most of these strategies rely heavily on the use and interpretation of market indicators and thus are of a decidedly analytical bent, but we’ll try to break down a few of the most well-known trading “secrets” for you in a simple and straightforward manner.
Swapping currencies on the foreign exchange currency market (FOREX) represents a nearly $5 trillion dollar per day activity. That is roughly 10 times the entire capitalization of the New Zealand stock exchange on a daily basis.
The staggering amounts of money involved and the millions of participants provide some substantial benefits for the individual or retail trader.
Trades in any of the world’s major currencies can be a executed essentially instantaneously. The difference between the desired price and the actual price at which an order is filled, known as slippage, is negligible, unlike some other types of investments where an order may languish for some time, giving prices an opportunity to change to an extent where the trade is no longer desirable.
In order to be a successful forex trader, you have to have a head for numbers, a good set of organizational tools and a feel for the markets. People who keep up with current global events also tend to be good forex traders, as currency prices tend to be affected by the things happening in the world at large. Most of all, however, successful forex trading depends on practice, practice, practice. As with anything, you can’t become an expert overnight.
With markets becoming shaky and the American treasury note no longer seen as the pinnacle in safe investments, many investors big and small are turning to the Foreign Exchange or “Forex” market.This market allows for people to invest in the wealth of nations as a whole as opposed to various companies within a nation by investing in the currency itself. The Forex market works by having people make purchases of foreign currency in their native currency, in the hopes that, as certain nations improve and others decline, the exchange rate will produce a favorable profit. Forex markets have been most commonly used in developing nations to provide them with much needed foreign currency, resulting in significant gains as the company recovers from civil war, develops into the first-world, or otherwise advances itself socially and economically.
Foreign exchange trading takes place 24 hours a day, seven days a week and 365 days a year. Indeed, at any given moment, someone, somewhere, is buying or selling foreign exchange. Because of the sheer size of the forex market, which in terms of liquidity is far and away the world’s largest trading market, it’s natural that access to the currency markets for retail traders is readily available through utilizing the services of an online forex broker. In actuality, there are so many such online firms available that any retail investor wishing to get involved in forex can easily become an independent online forex trader. Here’s how it works:
The worldwide currency markets simply facilitate the exchange of currencies from one to another, and although sovereign governments and major international banks are the prime players in this market, individuals can also participate as retail investors by utilizing the services of an online forex trader, also alternatively known as a dealer or broker; these online traders give the retail forex investor access to the currency markets and a platform from which to execute their trades by providing their clients with online forex trading accounts.
The term day trading didn’t originate with the foreign exchange market. This term was created to describe trading activity in different conventional stock markets around the world. Day trading means that all trades that are made during a particular day are settled during that day. The traditional stock markets operate Monday through Friday until a certain hour in the afternoon. When the market closes, whatever the closing price of a stock is for that day is what is set for that day. Based on the activity on the stock market during the day, the price for a stock may change overnight and be revealed during the next open trading day.
Trading in the foreign exchange market can be very rewarding if you understand what you are getting yourself into. Being a successful trader in the foreign exchange market requires patience, time, and a thorough understanding of the market. No matter what you are investing in, you ought to take the time to figure out strategies for success. One of the best characteristics of a good foreign exchange trader is the ability to control yourself. This will help you to manage trades in an efficient and practical manner. When people trade emotionally or without a sound strategy, this is when investing can be a failure.
Forex swing trading is a method of trading where currencies are held for more than a day and traded on basis of the weekly or monthly oscillations between the highest value and the lowest. Basically, the trading period is longer than that of day trading and shorter than in trend trading. In swing trading, traders can hold the stock for a period ranging between two days and two or three weeks at most.
Beginners will find this trading style ideal, as it provides them with several opportunities to trade in a win, without the pressure of day trading or the unpredictability of trend trading. Advanced traders too can make good profit since they have more or less mastered the strategy and can make accurate judgments.