The Forex or FX market is a short form of the Foreign Exchange market. This is the world’s largest financial market, and the average daily turnover was $6.6 trillion in April 2019. That is larger than the combination of all US equity and Treasury markets.

The worldwide Forex market has no central location like other financial markets that operate at a centralized location such as a stock exchange. It is a globally spread electronic network of financial institutions, banks, and individual traders, all involved in the buying and selling of national currencies. One of the major features of the Forex market is that it operates 24 hours on weekdays, according to the working hours of financial centers in countries all over the world. There are 4 main financial centers in the world. and they are Sydney, Tokyo, London, and New York. All the time, in any location, there are buyers and sellers. The Forex market is the most liquid in the world.

In the past, access to the Forex market has been made available only to banks and other large financial organizations. With advances in technology over the years, however, the Forex market is now available to everyone who wishes to enroll in the forex market. The time to get involved in the Forex market, the global market has never been better than the present. Open an account and become an active Trader in the biggest market in the world.

The Forex Market is a lot easier than trading stocks or commodities and very different than trading currencies on the futures market. You already play a role in the Forex market, whether you are aware of it or not. The simple fact that you have money with you, makes you an investor in currency, particularly in the US Dollar. By holding US Dollars, you have elected not to hold the currencies of other countries. When you’re investing in bonds, stocks, or any kind of other investments, along with money deposited in your bank account, represent investments that rely heavily on the integrity of the value of their denominated currency the USD. Due to the changing value of the US Dollar and the resulting changes in exchange rates, your investments may change in value, hitting your overall financial status. With this in mind, it should be no surprise that many traders and investors have taken advantage of the fluctuation in Exchange Rates, using the volatility of the FX market as a way to increase their investment.

For example, you had $2000 and bought Euros when the exchange rate was 1.50 Euros to the dollar. You would then have 3000 Euros. If the price of Euros against the US dollar increased then you would exchange your Euros for dollars and have more dollars than you started with.

Example : You might see the following

EUR/USD last trade 1.5000 means
One Euro is worth $1.50 US dollars.

EUR else, the first currency in the pair is called the base currency and the second else, USD as the counter or quote currency.

The FOREX plays a vital role in the world economy and there will always be an enormous need for the exchange of currencies. Worldwide trade increases as an improvement in technology and communication increases. As long as there is global trade, definitely there will be a FOREX market. The FX market has to exist so a country like Italy can sell products in the United States and be able to receive Euros in exchange for US dollars.

What Is FOREX or FX MARKET

Why is FOREX trading so popular?

Because you can trade from anywhere if you have a device (laptop, desktop, or mobile ) and internet connection. From your bedroom, office, or the nearest Starbucks coffeehouse. If you have or like to travel, take your mobile or laptop with you and you can trade the FOREX anywhere in the world where you have an Internet connection.

When you are starting trade in the Forex Market nobody will not ask you for any kind of diploma, a formal license, or proof of how many hours you have spent studying the FX Market and or Banking Industry. FOREX trading is economical and start-up costs are very low. You can open an account with as little as US$ 200 in order to trade in Forex at most brokerage firms. I personally do recommend ICC Markets and eToro which offers the best customer satisfaction, advanced trading tools, and features that allows you to place orders directly. Especially on eToro, you can copy trade from the best traders. Please visit our main page to discover all the advanced features of the above brokers.

The Main Benefits of Trading the Forex Spot Market are.

It is very important for every trader to know the differences between Forex and currency futures.

Stock / Future Market Forex Market
The contract size is predetermined in currency futures.
With Forex, you may trade electronically any desired amount as per your wish.

Dealers in every major Forex trading center ensure a smooth transaction as liquidity migrates from a one-time zone to the next.

Furthermore, Futures trade in non-USD denominated currency amounts only.

In Forex, an investor can trade in almost any currency denomination or the more conventionally quoted USD amounts.

The currency futures pit, even during Regular International Money Market (IMM) hours suffers from uncommon lulls in liquidity and constant price gaps.
The Forex market offers constant liquidity and market depth much more consistently than Futures.
With IMM futures one is limited in the currency pairs traders can trade. Most of the currency futures are traded only versus the USD.
With Forex, you may trade major pairs and even the cross pair such as EUR/JPY, GBP/JPY, CHF/JPY, EUR/GBP, and AUD/NZD.
What Is FOREX or FX MARKET

10 REASONS TO START TRADING FOREX

More and more entrepreneurs and well-informed investors are diversifying their conventional investments like bonds, commodities & stocks with Forex because of the following reasons:

1. FOREX is the most comprehensive financial market in the world.

With over $6.6 trillion a daily trading volume, the spot FOREX market can absorb trading sizes that dwarf the size of any other market. When compared with the equities or futures market, it becomes quickly apparent this gives you, and millions and millions of other FX traders, almost infinite trading liquidity and flexibility.

2. FOREX is a True 24 X 5 market.

The FOREX Market never sleeps during the weekdays. Trading positions can be entered and exited at any time around the clock, 5 days a week. There is no waiting for an opening buzz as in the case of the stocks market. It is a 24H, continuous electronic currency exchange that never closes. This is very desirable for a trader if he wants to trade on a part time basis because the trader can choose when you want to trade whenever he likes.

3. There is never a Bear Market in FOREX.

You can have access to a seamless exchange of currencies. Currencies trade in “pairs”, one side of every currency pair is constantly moving in relation to the other. Thus, when you buy a distinct currency, it means you are simultaneously selling the other end, if not other currency in that particular pair. As the market moves, one of the currencies will increase in value versus the other currency. Of course, you can choose the correct currency to be long or short accordingly.

4. High Leverage

You are allowed to trade foreign currencies on a highly leveraged basis – up to 500 times your investment. (it depends on brokers. Some are up to 400, some are 500, some are further.)

If the broker allowed 400:1 leverage, Standard 100,000- US$ currency lots can be traded with as little as 0.25% margin, or $250.

Mini Forex accounts are permitted to trade with a 0.25% margin, meaning, just $25 allows you to control a 10,000-unit currency position.

Futures traders, who are accustomed to margin requirements usually equal to 5%-8% of the contract value, will instantly recognize that the FOREX market provides much higher leverage. Stock traders must post at least a 50% margin, there’s no comparison. If you’re looking for efficient use of trading, trade the FX Market.

5. Movements of the prices might be Highly Predictable.

Currency prices in the foreign currency market frequently repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant benefit for traders who use technical analysts and strategies.

 Not like stocks, currencies tend to develop strongly. Over 75% of the volume is risky and, as a result, the market frequently exceeds and then corrects itself. As a mature trader, you can easily identify new trends, breakouts, and falls breakouts to enter and exit positions.

6. You don't need to pay commissions or fees to trade FOREX

When you trade FOREX, through many reputed forex brokers, you can do it totally FREE of commissions and fees, regardless of your account size. That’s why you must be careful and wise when you are choosing your broker. As I mentioned earlier visit our main page to find our recommended brokers and their advantages and benefits.

7. You no need to pay any kind of trading fees or exchange fees.

There are no usual fees, which equity traders and futures are accustomed to paying:

No clearing or exchange fees. 

No SEC or NFA fees.

Because currencies trade OTC (over-the-counter) via a global electronic system. In FOREX, what you can see on your trading platform is what you get, allowing you to make smart decisions on your trades without having to worry or account for fees that may affect your profit/loss. 

In the commodity and equity markets, you need to pay a commission and exchange fees. The OTC structure of the FX market eliminates clearing and exchange fees, which are profitable for traders.

8. How Forex brokers make money if they don't charge fees or commissions?

Like all kinds of traded financial instruments, OTC currency trading involves a spread, which represents the rates at which your counterpart is willing to trade. Your broker will receive a part of this spread.

Because the foreign currency market allows round-the-clock liquidity, you receive tight, competitive spreads both day and night. Stock traders can be more vulnerable to liquidity risk and normally receive wider trading spreads, especially during after-hours trading.

9. Market Transparency.

Transparency is highly desired in any kind of trading environment. The greater the market transparency, the more efficient the market becomes. Not like other financial markets where transparency is compromised, the FOREX market is highly transparent. 

Because of this transparency, as a Forex trader, you will have the ability to apply risk management strategies in accordance with your technical and fundamental analysis.

10. Instantaneous Order Execution

Not like all the financial markets, the Forex market offers the highest level of market transparency. Because of this, order execution and fill confirmation usually happen in just one to two seconds. 

In Forex, order execution is all-electronic and because you’ll be trading via an online platform, instantaneous execution is routine.

There are no traditional open-outcry pits, no exchanges, no floor brokers, and consequently, no delays.

What Is FOREX or FX MARKET

How Currencies are quoted and what moves individual currencies?

One of the best advantages of Foreign currency trading is only the margin is all that can be lost. You have to know that despite the super-high leverage offered by some Forex brokers up to 500:1. It means if you invest $ 1000 then the broker will allow you to trade up to $500.000.

Forex trading is less risky than Futures or Stock trading, where you might lose more than you have deposited. leverage also does not exist in the futures or equities market. Most of the time the Futures or Equities markets, sudden and dramatic moves occur, against which you can’t protect yourself at all, even by having placed your protective stops. Your trade may be liquidated at a loss, and you’ll be subject to any resulting deficit in the account.

But because of the Foreign currency market’s deep liquidity and 24 X 5, continuous trading, uncertain trading gaps are almost eliminated. Orders are executed instantly, without any kind of slippage or partial fills. For your protection, the broker will automatically close out some or all of your open trades if your account equity falls below the required level to hold the positions.

Think of this as a final, stop loss, always working on your behalf to minimize the losses. Forex markets trades units called “ LOTS”. In Forex trading, with most Brokers, you have to choose different lot sizes. Standard Lots, Mini, and Micro Lots. Some brokers offer Nano Lots also. The standard lot is equal to 100,000 in currency. The margin requirements, using a 500:1 Leverage, would be US$ 200, in other words, you manage $100,000 worth of currency for only $200.

It means, investing $200 with a broker, I could trade $100,000 ???

NO, be aware, that your account size has to be more than the required margin of US 200. For instance, if you place an order to buy 1 Standard lot ( @100,000) of USD/JPY and USD/JPY is quoted as 123.10/123.13, you buy USD/JPY at 123.13. Your account balance would be $170 because you paid 3 pips or $ 30 for this trade. If you would close this trade immediately, you have to sell it at 123.10 (as the bid price), for a loss of $ 30.

In fact, you could not get executed on this position, as the brokers’ trading platform would be rejected, due to having insufficient funds in your account. So, your account balance has to be a minimum amount of $230. $200 for margin and $30 for the trade. But, if, after you have opened the trade to buy USD/JPY at 123.13, and the USD/JPY falls the next second 1 pip, your position would be closed automatically, due to margin deficit. I will explain this concept later in detail.

Currencies are always represented as pairs in the FX Market. The pairs have a unique symbol that expresses what currencies are being traded. The notation for a currency pair will always be in the form ABC/XYZ. In this example, ABC is the symbol for the currency of one nation and XYZ is the symbol for the currency of another nation.

The most commonly used symbols in Forex are:

USD – The US Dollar
EUR – EURO
GBP – The British Pound or cable
JPY – The Japanese Yen
CHF – The Swiss Franc
AUD – The Australian Dollar
CAD – The Canadian Dollar

These are the most common uses and there are symbols for other currencies as well. A single currency can never be traded by itself. Every trade should have 2 currencies. Always you need to long (buy) one currency and short (sell) another currency to make a trade. 

Most commonly traded currency pairs are

EUR/USD – Euro against US Dollar
USD/JPY – US Dollar against the Japanese Yen
GBP/USD – British Pound against US Dollar
USD/CAD – US Dollar against the Canadian Dollar
AUD/USD – Australian Dollar against US Dollar
USD/CHF – US Dollar against Swiss Franc
EUR/JPY – Euro against Japanese Yen

The currency left of the is called the base currency. 

The currency right of the is called the quote currency.

For example, when you buy (long) the EUR/USD,  you are actually buying the EUR and selling the USD.  If you were to sell the pair it happens opposite, you are selling the EUR and buying the USD. The best way to remember this concept is, by just thinking of the entire currency pair as one item. 

If you buy it…you buy the base (first) currency and sell the quote (second) currency.

If you sell it…you sell the base (first) currency and buy the quote (second) currency. 

That means you would be able to sell (short) with no restrictions so you are able to make money even when the market drops as well as when it rises. The problem with the traditional commodity trading or stock market is that when the market rises you can make money. With FX trading you can make money without having any trouble.

What is PIPS?

Currencies are traded on a pip system. Every and each currency pair has its own pip value. When you see an FX price quote, you might see something like 

EUR/USD 1.2210/13

Explanation

If you are going to BUY EUR/USD, then you BUY 100,000 Euros and you SELL 122,130 USD. In other words, you get 122,130 USD for 100,000 Euros.

If you want to SELL the EUR/USD, you BUY 122,100 US$ and sell 100,000 Euros, in other words, you get 100,000 Euros for 122,100 USD.

The difference between the bid and the asking price is called the spread. In the example above, the spread is 3pips. Since the USD is the king of the FOREX market, it is normally deemed as the ‘base’ currency for quotes. In the Majors pairs, such as USD/JPY, USD/CHF, and USD/CAD. For these currencies and many others, quotes are shown as a unit of one USD per the second currency quoted in the pair. 

For instance USD/CHF 1.3000 means that for 1 USD you will get 1.30 Swiss Francs. else, you receive 1.30 Swiss Franc for each 1 US$.

When the USD is the base currency and the quote currency goes up, it means the USD value becomes strong and the other currency has become weakened. If the USD/CHF increases up to 1.3050 the dollar is getting stronger because it will now buy more Swiss Franc than before.

There are some exceptions to this rule such as GBP (British pound), AUD ( Australian dollar), and  EUR (Euro). In these cases, you can see a quote such as EUR/USD 1.2080, meaning that for Euro, you receive 1.2080 USD.

In these kinds of currency pairs, where the USD is not in the base, a rising quote means a weakening of the dollar. As it now takes more USD to one EUR, BGP, or AUD. In other words, if a currency quote goes higher, it means that base currency value is increasing. A lower quote expresses the weakening of the base currency.

Currency pairs that USD are not involved called cross currencies. But considering the same calculation. For instance, a quote of EUR/JPY 134.50 means that one EUR is equal to 134.50 JPY.

How to go LONG (BUY) and SHORT (SELL) in the Forex Market?

These 2 important rules keep in mind. It is very important.

01 Let your winning trades keep running, while cutting losing trades. 

Every trader has lost trade. Nobody can win continuously. The secret is, that a consistent, disciplined trader, scores more winning trades than losing trades at the end of the day. When you examine your charts, without any doubt, if you are in a losing trade, don’t keep losing money. Most of the amateur are lowering their stop loss just to “prove they are right” or “hoping that the next couple of seconds market will reverse”. 99% of these kinds of trades are ending up with more and more losses. Most of the smart trades are usually “right” immediately. Smart traders are smart. Remember, they know there are many other opportunities. Cut your losses and increase those winning trades.

02  You know Forex Trading is also highly risky, so never ever trade without placing a Stop Loss. Place a stop loss along with your entry point, to prevent potential losses. Before initiating any trade, you have to figure out at what price you would be wrong, because the market changed direction, and would want to cut your losses. 

To earn profits, in the FX market, a trader can enter the market with a long or short position. As an instance let’s imagine you have been studying the EUR. The EURO is paired first with the USD. Your trading strategies and rules, tell you that the EUR will rice in the next couple of weeks. So you go long position with the EUR/USD pair meaning you will simultaneously buy EUR, and sell USD.

You see that the EUR/USD pair is trading at 1.2010/1.2013. As your analysis, you believe the market price for the EUR/USD pair will go higher, you will enter a long position. As an instance, let’s assume you bought one lot of EUR/USD at 1.2013. When you sell back the pair at a higher price, then you make money.

To explain a typical Forex short trade, consider this scenario involving the USD/JPY currency pair. Keep in mind, going short if not selling the currency pair implies selling the first base currency, and buying the following quote currency. You sell the currency pair if you believe the base currency, as per the example USD will go down relative to the JPY (the quote currency) or equivalently, that the JPY (the quote currency) will go up relative to the USD (base currency).

How to calculate profit or loss in Forex Trade?

Calculations of the profit on the sell (short) order as below. It may be somewhat complicated if you have never been to the FX market before.  But this process is regularly calculated through your broker trading platform automatically. But it’s important to know how the calculation is happening.  I will show you this process. So you can see how a profit might occur.

The market bid & ask price for USD/JPY is 107.50/107.54. It means you can buy 1 USD for 107.54 YEN, else sell 1 USD for 107.50 YEN. Got It? Suppose you think that the USD is overrated against the JPY. To perform this strategy, you would sell USD unless buying YEN, and then wait for the exchange rate to rise.

You sell 1 lot USD (USD 100,000) and buy 1 lot JPY (YEN 10,754,000 YEN). (If leverage 400:1, Remember, your initial margin deposit for this trade would be $ 250)

As you assumed, USD/JPY falls down to 106.50/106.54, meaning you can now buy 1 USD for $106.54 YEN or sell 1 USD for 106.50. Since you sell dollars (and buy YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy the USD 100,000 at the current price of 106.54 and receive YEN 10,654,000. In the beginning, you bought YEN 10,754,000 and your profit was 100,000 YEN. In order to calculate your Profit/Loss in terms of US dollars, divide 100,000 YEN by the current USD/JPY rate of 106.54. So,

Total profit = USD 938.61

What Is FOREX or FX MARKET

HOW TO READ FOREX CHARTS?

Forex Charts, how to use them, and what do they mean? 

Important numerous facts such as money management,  follow your strategy, discipline, and not being greedy, etc. Learning to read the chart and identify the market behavior is also one of the most important things for a trader.  I realize that reading charts, and interpreting chart patterns, are more an art than a skill. Base and apply your entry and exit decisions on your own combined methods of fundamental and technical analysis.  FX  charts are easier to understand and to use. They indicate a slower moving, stable economy of a country, compared to the stock exchange, with its daily drama of Wall Street Analysts, company reports, and shareholder demands.

Forex with its 8 Major currencies is easier to analyze and predict than tens of thousands of stocks. Major currencies are 

(1.) United State Dollar
(2.) Euro (used by European Union member countries)
(3.) Great Britain Pound
(4.) Japanese Yen
(5.) Switzerland Franc
(6.) Canadian Dollar
(7.) Australian Dollar
(8.) New Zealand Dollar

The complimentary FREE live charting software, provided by the brokers will be absolutely sufficient for you to watch and anyone currency pair. Understanding just a few basic circumstances about the technical analysis of a currency chart can lead to increased profit potential.

Pricing – Price reflects the perceptions and actions taken by the traders in the market. It is the dealing among buyers and sellers in the OTC (Over The Counter)  or Interbank market that creates price changing. Therefore, all kinds of fundamental factors are quickly discounted in price. By examining the price charts, you are indirectly seeing the fundamental and market psychology all at once. After all, the market is fed by two emotions Greed and Fear, and once you understand that, then you begin to understand the psychology of the market and how it correlates to the chart patterns.

Data Window Chart – Most online charting platform such as CTRADER, MT4, and MT5 when you click on a candlestick, it will display a small box of data usually called a display window which will contain the following items:

H = Highest Price
L = Lowest Price
O = Opening Price
C = Close Price (or Last Price)
V = Volume

What Is FOREX or FX MARKET 01

The most common types of charts, used in FOREX trading, are the Bar Chart and the Candlestick chart.

Bars Charts

Price bars are a linear design (a line) of a period of time. This enables the viewer to see a graphic representation reviewing the movement of a specific time frame. As an instance, I use 1 hour and daily time intervals for my charts. Each bar has similar characteristics and tells the viewer some important pieces of information. 

What Is FOREX or FX MARKET

First, the highest point of the bar represents the highest price that was performed during that time period. The lowest point of the bar indicates the lowest price. 

Regular bars display a small point on the left side of the bar which represents the opening figure of the period and the small dot on the other side (right side) represents the closing price of the same period.

What Is FOREX or FX MARKET

Candlesticks

Japanese Candlesticks are used to represent the same information as Price bars. The only difference is the open and close price from the body of a box which is displayed with a color inside. A red color means that the close was lower than the open, and the green color represents that the close was higher than the open. Anyway, you can customize the color as you wish.

What Is FOREX or FX MARKET

If the box has a line going upwards or downwards from the box, it represents the high and low is called the tail or wick.  Many interpretations can be made from these “candlesticks” and many books have been written on candlestick and its Pattons. 

You can download one of the best books written on  Japanese Candlestick for free. “Japanese Candlestick Charting Techniques” written by Stevie Nison. This book will help you to master Japanese Candlestick and Chart Patton. Visit the link you will find lots of learning material for free.

Chart Intervals & Time Frames:

A chart Time Period, or time frame, basically refers to the duration of time that passes between the start and the end time duration of a bar or candlestick.  For example, with your broker platform, you will be able to view a currency pair, in a 1-minute time frame up to a 30 day period. You can select any time frame according to your trading system and strategy.

How do Economic Events impact Global Currencies

When I discuss with several traders, about their ideas about using fundamental analysis as a part of their trading decisions, I have received two opposite answers.

The response of Trader A

Fundamentals that they read about are typically worthless as the market has already discounted the price. they are looking at 

The long term trend, 

The current chart pattern, and 

Identifying a good entry point to buy or to sell.

The response of Trader B

I almost always trade with the market calendar. I never do trade simply alone with technical information. I use technical analysis and it is terrific, but I can’t open or hold a trade unless I understand why the market should move. There is a big deal of hype attached to technical analysis by some professionals who claim that it predicts the future. Technical analysis tracks history. It does not predict the future. You have to use your own skill to draw judgments about what the past activities of some traders say about the future activity of other traders.

In my way, technical analysis is like a thermometer.  Fundamentalists who say they are not going to pay any consideration to the charts are like a doctor who says he’s not going to take a patient’s temperature. If you need to be a successful trader in the Forex market, you always want to know where the market is. Up, down, trending or choppy. You want to understand everything you can about the market to give you an edge.

The technical analysis shows the vote of the whole marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new movement is something unusual. It is important to study the details of price action to watch and observe. Reading the charts is absolutely important, and alerts to existing disequilibrium and potential changes.

For FX traders, the fundamentals are everything that makes a country tick. The release of economic events such as consumer spending, government spending, employment cost index,  producer price index, political actors, government policy, or an individual event can set the market in a frenzy. These are very important when traders make the decision to trade or not to trade.

Technical analysis is a way of using historical data in various ways to predict the future value of a currency pair. Fundamental analysis is a very efficient way to forecast economic situations, but not necessarily exact market prices, and you must trade-in agreement with the supporting technical analysis. FX traders put the most weight on technical analysis because traders around the world use similar charts and tools in predicting market movement

The reason the Foreign exchange market can be so predictable sometimes is that if most of the traders are using the same graph for determining trends and patterns, then it is highly likely that they will act in a similar way. So thousand of traders who have all charted the same resistance line, will most likely either set their trades and direction conform to that line.

When economical data is made available to the public there is a reaction from Investors, Traders, and Speculators. Information in the form of news and economic events is vaguer than that of technical data. There is a lot of gray area in this type of data. The market will ultimately react to how people think the economic event compares to the present market situation.

When economical data is made available to the public there is a reaction from Investors, Traders, and Speculators. Information in the form of news and economic events is vaguer than that of technical data. There is a lot of gray area in this type of data. The market will ultimately react to how people think the economic event compares to the present market situation.

Economic data usually reveal information that “Should” cause a currency to go down in price or “may” cause a currency to go up. The words “SHOULD” & “MAY” in the quotes above reveal the uncertainty of the fundamental data. Here is an instance of what analyzing fundamental data is like. Let’s assume there are six economic indicators. Let’s consider our six indicators 1, 2, 3, 4, 5, and 6. Now we wait for the economic data released. We get the readings for our economic data for the EURO as following:

Indicator 1: indicates the Euro may go up

Indicator 2: indicates  the Euro should go up

Indicator 3: indicates  the Euro could go down

Indicator 4: indicates  the Euro usually goes down

Indicator 5: indicates  the Euro could go up

Indicator 6: indicates  the Euro may go down

By studying at the above indicators, you don’t know what the Euro is going to do. Besides, currencies are not traded along and it’s always trading as pairs. So you would have to get the fundamental analysis for another currency pair and compare it with the EUR. I think you can imagine that this is a big task for you.

I do not want to scare you away from fundamentals. It will be better to learn about one piece of economic data at a time for your convenience. Finally, you will build a puzzle from all of the technical and fundamental data and make more versed trading decisions.

What Is FOREX or FX MARKET

How to predict the future in the Forex Market?

by studying the past Technical Analysis.

FOREX PRICES MOVE IN TRENDS

The traders who don’t consider this obviously have no need to implement a trading methodology on technical data. But, research has shown that those who trade with the trend, considerably improve their chances of making a winning trade.

Identifying the current trend will help you become aware of the overall market direction and offer you better clarity, especially when shorter-term movements tend to clutter the market picture. How does technical data help to decide what the trend is and how to trade with then trend versus against it?

Even though you learn you how to use and read various technical indicators to recognize a long- term trend, spot predictable chart patterns and use specific rules to enter and exit a high winning probability trade, and even though all this involves sound logic, methods, formulas, parameters, data, and research, these technical indicators, by themselves, are not the holy grail of FX trading.

It needs discipline and emotional control to hold with trading following through the inevitable market up and down. Normally, expert technical traders look for ups and downs.

Which technical indicators are the best?

None. Technical indicators are not a stand-alone system. It is simply components of your overall customized, personalized trading system. The objectives as an FX Technical Traders are:

1. To figure out and identify the price action of the currency pair. Price is the main thing. If the EUR/USD is at 1.2224 and goes to 1.2030, 1.1990, 1.1950- the market is in a downtrend. Despite what every technical data might predict. If the trend is down, keep in touch. Indicators pointing out where the price will go next or what it should be doing are worthless. A trader should only be concerned with what is happening in the market, not what the market might do. The price will tell you what the market is doing.

2. Always remember that technical indicators are only giving you confirmation based on what the FX market is telling. So listen to it and let it tell you which strategy, method or techniques you should use.

If you are interested in learning Forex, visit the following link to find hundreds of free material for free.

Find the free educational materials here.

If you wish to open a Forex account visit our homepage to find out our recommended brokers. We wish you a happy trading journey!

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RISK WARNING:
Risks of currency trading
Currency trading in the forex market is an extremely risky form of investment and is only suitable for institutions, organizations, and individuals capable of handling the potential losses it involves. A trading account with a broker or institution allows you to trade foreign currencies on a highly leveraged basis. It would be 500 times or more your account equity. It depends on your broker. The funds in an account that is trading at maximum leverage may be entirely lost if the positions held in the account experience even a small percent swing in value. Given the possibility of losing one’s whole investment, speculation in the Forex market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors’ financial well-being.

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