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Finding the Best Forex Broker: Adding Value to Your Trading Experience

Finding the right forex broker is often overlooked by traders, because they are too focused on commission costs, while ignoring the larger important picture.

A Good Forex Broker is Always A Highly Liquid Broker!

Regardless if a forex broker is good or not, commission costs are hardly the issue! Low commission costs are often the tool of advertisers to promote not so good brokers. What really matters is the capability of the broker in question to handle fast trading, large size trading and generally foreign currency trading during hard to trade times. The global forex currency converter mechanism is peculiar, because it is easy to handle most of the time, and yet it may become fast moving, unpredictable and illiquid for brief periods of time. And these periods come without warning to the inexperienced trader, often sabotaging their otherwise successful methodology. Choosing a good broker can eliminate most of the issues that poor volatility creates. As long as it is a good broker, one which is well structured and can provide liquidity. This means that this broker can take your trade, no matter what the conditions of the market are. This is far more important than commission costs. Many penny wise – pound foolish traders think about commission costs all the time, but good liquidity is what enables the broker to take your trade at the best market price. This means enhanced profitability and smaller losses throughout the year.

Trading Smarter And without Excessive Stress

In order to learn how to trade forex not only profitably but also under low stress. Traders must focus on key factors such as liquidity, money management, and facing the fact that they are dealing with probabilities. Probability is an event of chance, and as the old adage goes chance favours the prepared minded. Probability as a chance cannot be predicted, but it can be handled properly, so as not to cause any serious problems. A good broker is like a good trader, one that has already handled tough market conditions well in the past, and is still around to do business. A good forex broker is not the one with the lowest commissions, nor the one having won magazine awards. And certainly not the one offering most deposit bonuses. A good broker is the right base upon which to base one’s trading and then look to improve trading as they see best. Each trader trades in a unique way, so generic advice and tips don;t have to be applied exactly as they taught. Through good trading conditions and the use of trading tools and tips, one can reduce trading related stress to a minimum. Stress is normal, as long as it doesn’t exceed the stress levels we all have for all things not related to trading. So that trading becomes second nature, an everyday thing that we have to worry about but not too much.

Trading through the Best Forex Trading Platform

Using the best forex trading platform offers risk control tools and embedded calculators. Which not only come in handy, but also help improve profitability!

What the Best Forex Trading Platform Can Do For Your Trading

Forex traders often struggle to maintain control and profitability in their trading. This is partly because of not using the best forex trading platform they deserve. They often find themselves trading CFD and other instruments while having the pressure of time against them. This is because various even simple trading tools such as a forex calculator may not be available on their platform, or because they are overwhelmed by a sense of risk. In order to gain the upper hand over market risk and stress, one has to have risk control tools available at their disposal. The most important are fast contingent order placing capability, which does require these calculators in order to avoid mistakes. LSS pivot calculators are also important from time to time, these make the task at hand much easier to handle, and avoid the risk of making a mistake. Calculators are embedded and all data are entered in parallel, as opposed to classic handheld calculators where usage is awkward and data is entered in serial mode. That is the best way to save time, and to be sure that the wrong number is entered, it can be corrected right way.

Trading is all about probability. Each trade comes with its own probability. And then it’s a matter of money management in order to combine all those individual probabilities together to make up a trading plan.

What is Forex Trading All about?

Forex trading is all about trading probabilities, no trade is guaranteed to be a winner! Therefore a trader’s total profitability at the end of each month boils down to overall probability of handling the individual probability of each trade. Using the best forex trading platform one can get, is a way to get the odds in their favour, and eliminate the chance of making many kinds of mistakes. As every trader should know, money management is important to achieving that monthly profitability. And yet many traders use poor money management, and generic methods for placing stop loss orders. Money management alone can improve a trading system beyond belief, as it can increase total profitability by orders of magnitude. This is because good money management methods use variable trading size, and through the power of compounding the effects become very significant. Traders need to be reminded that it’s a game of probabilities every day. And they should their best to figure out what factors to change, and what factors not to change at all. Finally, there has to be some discipline in trading, but not absolute discipline. The dynamic nature of the markets requires some fine tuning, some delicate balancing act between perfect discipline and no discipline at all. At some point in between one can trade in a somewhat rigid way and yet still be allowed to make minor adjustments.

Guide to Best Tools for Forex Charts

With the growth and development of foreign currency trading worldwide, largely through networks of forex brokers, the unique tool of forex charts has been authored and refined. Learning how to interpret forex charts is a basis for understanding what is forex trading, to maximize your trading experience. By maximizing this intuitive visual resource, you can make your foreign currency trading a more professional endeavor.

The Basics of Forex Charts

Up-to-date data — In order to be of value, forex charts must be current. The logic of charting is that past price movement has value in predicting future prices and that recent history is more significant than previous periods. So forex brokers have an incentive to provide their clients trying to understand “what is forex trading” with current forex charts.
Defining your forex charts timeframe — Market-determined prices, being freely determined by random stochastic processes, manifest behavior specific to them, apart from any larger secular trends and influences. Thus, the strategy for each trade will depend on the duration expectations held at its outset. And strategy is time-unit dependent: patterns and meaning in forex charts are functions of the units in which they are denominated. Whether the issue is a candlestick analysis or identifying in which forex charts pattern a price series is currently oscillating, the unit timeframe is of critical importance.
Practice your strategy — The essence of forex charts is identifying foreign currency trading price patterns with sufficient exactness and robustness that a profitable strategy can be devised. And while real-world conditions are unlikely to be exactly replicated by simulated or demonstration scenarios, practice sessions should precede any real trading attempts with a forex broker. To answer what is forex trading, you should practice on both past and present data to see if your understandings survive the reality test.
Learn new strategies and chart structures — The evolving nature of market movements requires that participants continually refine and reexamine their methodologies and understandings. The only constant is the presence of change. Still, no forex charts trading arsenal is complete without a mastery of the basic common tools:
- Candlestick representation — A bar on a candlestick chart shows the open, close, high and low prices for the selected period. The body of the candle shows the open and close prices where the wicks show the high and low prices.If the closing price is greater than the opening price of the previous candle, then the candlestick will be green. If otherwise, the closing price is less than the opening price of the previous candle, then the candlestick color will be red. Candlesticks simply make it easier to see if the trading period ended up or down and they also contain additional information.
- Fibonacci retracement indicators — These virtual thresholds are horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before market movements continue in the original direction.
- Utilize moving averages to gain longer term perspectives. Historical data is the essence of forex charts and employing averages is the single best use of data to understand what is forex trading.

Forex Training for CFD Traders

Forex traders must be skilled, disciplined, and sufficiently capitalized to survive and prosper in the world’s largest and most liquid marketplace. Similar traits are required to trade financial instruments profitably on Contracts for Difference (CFD) platforms.

CFD and Forex Currency Trading Similarities

Both have friendly web-based trade execution processes and are characterized by limitless liquidity. Markets never freeze-up and trades can be initiated whenever they are open, close to the last-price trade.
Analytic tools — Basic charting and technical factors are influence both. Forex news is of paramount importance also in understanding CFD price movements.
Account margin requirements — In both cases, margin balances are highly leveraged and small price movements in the underlying assets have extremely magnified effects on position balances, requiring close attention during market hours. Thus both cases are abstractions from underlying assets with no ownership features. Account balance changes are settled for cash
Market-maker spread-based revenue model — For CFDs, an overnight fee is assessed on open positions and for forex, depending on the channel and market participants, minimal transaction and financial fees are assessed. But in both, the primary source of income is the buy – sell spread (or premium) on each transaction. The spread is denominated in pips, usually thousandths of a unit. It can be variable or fixed and is often based on a number of factors, including the currency pair
Stability and Viability of Counter-Trade Offerer — In any financial relationship, a trader must concern himself with the opposing party financial stability, its: capitalization, length in business, management experience, network contacts, volume of business, safety of client capital, variety of offered trades and stop orders.

CFD and Forex Currency Trading Differences

For the forex trader, the key difference from trading in CFDs is the increased variety of instruments classes beyond the proprietary CFD platforms compared with the increased CFD instrument types. By this we mean that forex encompasses instruments which are both existing and future assets as well as real and wasting (options), whereas CFDs also relate to non-forex instruments, like shares, indices, and commodities. So, in general, CFD traders have a broader scope of interest beyond forex news. While any significant macro-economic development is part of the forex news cycle and therefore of concern to forex traders, the broad flow of information often affects other instrument classes more directly.

The essence of forex training

Managing risks and rewards is the major issue in forex training. The effort consists largely of using stops and limits wherever possible. Only in this manner can a trader hope to overcome the inherent bias against the small trader that institutions with unlimited computing and communication power possess.

Stop Loss — Limits the risk on an existing position, closing it when the price moves adversely.
Trailing Stop — Also limiting existing position risk, but it is set at a fixed distance, in pips, from the current market and “follows” the market as it moves in your favor
Entry Stop — Opening a position if the market moves in an anticipated direction; An Entry “Buy Stop” is an order to buy above the current market, and an Entry “Sell Stop” is an order to sell below the current market.
Take Profit Order — An order which will incur profits on an established position. It closes a position at a price set by you when the market moves to your benefit. If you have a long position, the Take Profit order is above the current price. If you have a short position, the Take Profit order will be below the current price.
Limit Order — Orders designed to open a new position at a better price than the existing one. An Buy Limit is an order to buy at less than the current price, and an Sell Limit is an order to sell at greater than current price.

Essentials of a Forex Trading Course

Every profession requires training to accomplish mastery of the material and in this industry, forex trading courses are also available. Students of the subject seek to answer: “what is forex trading?” and “what is cfd trading?”. Many approaches are offered with varied curricula, content, methodology, delivery means and price.

Forex trading course essentials include varying aspects and requirements:

Introduction and Basics: What is forex trading starts with terms and definitions. Understanding the lexicon and vocabulary is necessary to accurately interpret developments and commentary. You then need to understand the industry structure to appreciate who makes money, when and how. In addition to the facilitators and agents, various players profit from different market scenarios and actions. Timing is of the essence in fx trading and so the ability to read forex charts to understand market cycles and trends is or paramount importance. Forex charts can be denominated in varying units to help you gain insight on varying hours of the day and days of the week. The contemporary trading offerings require that traders understand what is cfd trading, a relatively new means by which proprietary platforms allow traders to interact directly with counter-party principals without brokers and market and which are settled for cash only based on opening-closing price cash difference.
Currency Pairs: Forex trading is a world of currency pairs. Information, strategy, framework and performance measurement. It is a pure binary world. Every loss is offset by a corresponding gain. Of course as actual physical instruments, the issue of liquidity is paramount as you cannot realize indicated gains or losses without an actual transaction and the ability to execute a transaction at the stated price depends on a transaction counter-party, so the popularity of a given pair trade is critical.For analytic purposes, currency pairs can also be thought of as belonging to groups. Among the groupings that lend themselves to profitable correlation analysis are: Commodity currencies, emerging markets, majors and (the largest volume) US dollar pairs.
Trading Styles: While individual traders lack the wherewithal to evolve into full-fledged algorithmisists, the era of Do-It-Yourself algorithms is upon us. So that while cloud-enabled big-data crunching is not within everyone’s capability, it is ever-present in the market and trader’s employing simplistic rules do so at their own peril as their intentions and actions can be aggregated and exploited. Nevertheless, empirical studies do confirm that trading with trends can be profitable. Markets do exhibit crowd behavior and the “trend is your friend” can be a winning strategy.So while the ability to “scalp” or “swing” trade grows increasingly difficult, the individual can still operate based on the random unfolding of events, in an analytic manner largely defined as “fundamental”, or price determination resulting from underlying real data. In the world of forex trading, the movers of foreign currency values are macro-economic determinants, starting with interest rates and extending to trade balances and currency flows.

Any forex trading course must cover all the basics, including “what is forex trading”, “what is cfd trading”, forex charts, and the like. It must also detail currency pairs and trading styles.

Day Trading Forex For Beginners

The allure of easy money draws many to the world of day trading forex. Before proceeding to the issues of what to do and what not to do to profit in this field, anyone seeking to consider entering this profession must first address some basic self-definition issues.

The first questions to be addressed are psychological:

Rational basis for actions: Are your actions based on objective causes? How much do you act out of unacknowledged fear or greed? How well can you interpret forex signals? How systematically can you research to find a forex broker? How disciplined and focused can you be in the face of disparate, diffuse and partial information? When you trade according to a valid setup and a loss results, can you discard this aberration and continue with a successful strategy? Can you envision tweaking trading rules to account for new circumstances?
Time horizon orientation: Can you orient yourself to the demands of intra-day decision horizon? Can you successfully formulate and stick with decisions in an environment requiring rapid execution? Can you prepare for future decisions by building on past activities?

No less important in the question of “what is forex trading?” are the financial questions to be addressed:

Market hours availability: Can you devote yourself to this profession full time? So that you can always receive forex signals and connect with your forex broker as necessary?
Adverse results: Can you afford to lose your trading capital? Can you accept losses as part of the results of a larger trading portfolio? Can you wait out interim results until they turn around?

What is forex trading

Only after successfully answering these self-defining issues can you begin to look at what is forex trading and how to successfully day trade. With ever-more calculating power and speedier execution characterizing the day trading forex market, the individual trader must be increasingly methodical and sophisticated. Strategies and rules must be constantly evolving.

The essential point for the individual trader is not that she is required to know everything and outsmart everyone, rather only that her trade is one step ahead of the thundering herd. And that she not read more into her analysis than is warranted by the circumstances.

Of paramount importance is that traders avail themselves of available technical and fundamental tools. Ours is an age of man-machine interface and optimization, with day trading forex at the forefront. The implications for our era of big data, where, in real time, powerful processors generate algorithms based on millions of data points is that— the challenge for an individual alone to consistently outsmart the market — is daunting.

Day trading forex

All these pressure points are multiplied and accentuated for traders who choose to operate totally within a single trading day. So it can be concluded that day trading forex is a profession that requires psychological acuity, nerves of steel, self-discipline, an analytic mindset and familiarity with fundamental and technical analysis. Additionally, day trading forex requires a sufficiently diverse trading portfolio that losses can be sustained without altering decision-making rules and procedures.