Read these 7 Forex Trading Sessions Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Forex tips and hundreds of other topics.
A forex trade strategy is different depending on the broker, state of the market, time you plan on investing and even the currency you are trading. Strategies are dependent on the conditions surrounding the situation. A person trading without a broker in GBP/USD will have a different strategy than a person trading with a broker in USD/JPY. A simple search on any search engine will yield thousands of forex trade strategy templates, articles and advice. There is no way to gauge which single trade strategy is better than another because the market is vast and has many variables that impact the forex trade strategy.
Therefore, it is recommended that a demo account be opened with a broker firm that offers free accounts without asking for bank and credit card information. Secondly, a good tip is to spend time reading information on currency value and national indicators from verifiable resources, like Bloomberg, Reuters or Hoover's. Third, spend time researching the different buy/sell strategies that other brokers and traders are initiating. Find one that fits your needs and level of experience.
A good forex trade strategy will take the following into consideration:
The forex market is large and volatile. It can and does result in loss, as much as it results in gain. Do not trade money you cannot afford to lose. Understand leverage, and the risks associated with using too much or too little leverage. Know the fundamental and technical states of the currency market. Have a timeframe for trading -- hourly, daily, weekly or monthly. This helps keep you on track. Time your trade based on market hours and price moves. Ask what the market sentiment is: are other traders overselling? Under-buying? Examining these aspects does not create an entire trade strategy, but will help get you on the right track to developing a forex trade strategy that works.
There are many choices when downloading a forex platform and the most recent ones work with a Windows-supporting PDA. Take a look at different sites to decide which platform you feel most comfortable with.
At first glance, a trading platform will be confusing. This is normal with any new software, and like any new software, you will have to take a bit of time learning the terminology and commands. Each program is different. A simple search on Forex trade platforms will give you tons of different platforms to use, each with different interfaces and commands. Take advantage of the free demo's to ‘get the hang' of forex trading platforms.
A forex trade platform is a live program that is installed onto your computer. It allows for quick analysis and price information. It allows you to choose to buy/sell and place bid/ask prices. It almost works like a live chat program does by sending and receiving live information.
You do need a fairly quick computer, most forex trade platforms will work on a 2.0 GHZ or higher processor. You want to have at least 512 MB of ram simply because this is a live program. Additional storage space is a good idea, but you probably don't need more than a 5 GB of open hard drive space. Operating systems can be Linux, Windows, Mac, or UNIX in most instances. You also want to have high speed Internet — dial up will simply not work as the connection is too slow.
Free forex trading means that the forex broker does not charge a commission. So yes, to a certain extent forex trading is relatively free. The question is, how do brokers receive payment for their services? Well, they gain a very small amount of money, calculated by the fourth decimal point (or pip) out. So, a broker that charges 4 pips gets 0.0004 take on the trade value.
Do you need to pay a broker? If you are a novice to trading and forex trading, or you do not have a wide and vast amount of resources that can be dedicated to finding the right buyer/seller or bid/ask price, then it is recommended that you find a free forex broker that is registered with a governing organization. Many tenured traders use brokers also, especially considering the hours that the market is open.
Some forex companies, such as FX Club, offer free online video learning for learning forex. Their video education tutorials walk you through the initial phases of starting a forex trading account. This includes when to trade forex in certain markets and the best times to trade when multiple nation markets overlap. FX Club also offers tutorials on chart analysis for beginners and advanced forex traders. This is important to learn because a lot of trading and prices are based on the trader's ability to interpret chart analysis.
FX Club has video training on indicators and understanding Japanese candlesticks. FX Club also offers live telephone assistance, and a trader's forum where you can get advice and help from other traders. The reason this is better than what others offer is you do not have to register a live trading account prior to using their information — you only have to register to be a member. That means that you do not pay or give bank account or credit card information to FX Club until you are ready to begin trading.
Another great information resource for forex trading is FX Street at www.fxstreet.com. This is an information based web page that gives live and up-to-the minute information regarding the current state of trade, value of currency pairs, how to trade and where to trade. Again, FX Street does not charge for their information.
FX Street offers forex trading session information. This includes strategy, market information, articles and broker information.
FX Club offers free forex trading session demonstrations, including the downloadable trade platforms that can be learned and sampled prior to actually opening a trading account. FX Club offers telephone, forum and chat support and has several tutorial videos that can be watched directly at their website.
If you are looking for more economic-related information, including forex trading sessions, the Federal Reserve Bank of New York has an excellent education book that is a free download “All About...The Foreign Exchange Market in the United States.” They have nearly any type of economic, monetary and global monetary governance information you are looking for. You do not have to register or pay for the information. Find it at www.newyorkfed.org/.
A forex strategy is a method employed by traders, dealers and brokers to enhance the opportunity and possibility of generating profits from forex trading sessions. This is close to the same types of strategies used in stock and bond trades. A forex strategy is based on analysis of current information regarding the state of the economy and history of the currency—the fundamental and technical information. For example, in stock trading you would take into account the corporate governance and ethical history, as well as the company's current and historic value. You would also consider the U.S. economy, where a failing real estate market (for instance) would result in the selling of real estate stocks. The same basic theory applies to forex strategy, only it is based on a global perspective and the state of a nation rather than a corporation. Forex strategy is based on the fundamentals -- governance, economy and consumerism -- and technical details -- historic trends, price volumes, trade volumes and actual value of an entire national currency. Another similiarity between forex strategy and stock trading strategy is that is still incorporates the amount of time of the investment. In stock trading, this is called long term and short term, where long term is over five years and short term is under five years, in general. In forex strategy there are daily, short term (weekly) and long term (monthly) trading strategies.
|Jennifer Mathes, Ph.D.|