Forex trading is one of the most active and volatile markets, which makes it ideal for traders. Forex Trading Guide provides a starting point for beginners. Tips, strategies and training for experienced investors are also provided. We examine forex trading hours, explain how to compare online trading platforms, how to manage risk, and where to find the best forex demo accounts.
So start your journey into the world of forex and join a market that trades over $5 billion every day…
The best forex broker in Africa
Forex definition
Forex (Forex) is the exchange of one currency for another. Companies, governments and vacationers all over the world need to exchange currencies at different times (although the scale of the transactions is almost different). The forex market can do that. The forces of supply and demand in general will affect the movement of these exchange rates – forex trading is the active speculation of these exchange rates.
Forex trading is focused on ‘pairs’. It represents two currencies being exchanged. The exchange rate is expressed as the number of second currencies required to purchase one of the first currencies. If the EUR/USD pair is ‘1.1811’, it means you need 1.18 US Dollars to buy 1 Euro. Exchange rates are often quoted to six decimal places. The online forex platform allows retail investors to speculate on the fluctuations in this exchange rate.
How to start Forex Trading
Retail investors can start trading forex using the online platform and software of numerous forex brokers. However, choosing the broker is a problem. One big problem is that the broker that is best suited for one trader may not be suitable for another trader.
When looking at Forex brokers, there are many different comparison factors. Many people will look at available assets such as gold or bitcoin, or available assets such as leverage or margin, gold or bitcoin required for trading and offers, even if the broker is in a well-regulated jurisdiction such as the United Kingdom or Switzerland. a.
We cover all of these popular elements in the review, but we want to include comparison elements that may be overlooked, such as the minimum deposit and transaction size, spread type (fixed or variable), and deposit and withdrawal methods. With Paypal or Skrill. Some of these factors are important to some traders but not to others. This makes it difficult to suggest a ‘best’ broker for everyone, but still every broker gives a rating.
Demo Account
In addition to our comparison list, potential new traders can use a demo account to test other brokers and see which they prefer. Usability or look and feel is important. Opinions about other online trading platforms can often vary. The best way to determine a particular platform is to use it. You can also check if new clients regularly have assets available, and if spreads are competitive.
In summary, the following is a list of comparison factors that you should consider when evaluating other forex brokers.
- Proposal / distribution (trading costs)
- Margin or flexibility of use
- Minimum deposit
- Software integration – e.g. MT4 (MetaTrader4)
- Assets (markets you want to trade, such as oil, GBP / JPY or Bitcoin)
- regulation
- Demo Account
- bonus
- App for mobile commerce
Could there also be other important considerations, such as does the broker accept traders in a specific country? Some regions, such as Australia and the United States, have different regulatory bodies, and many brokers may not provide services in that region. Our brokerage table usually only shows relevant brands based on IP.
Advantages of Forex Market Trading
One of the biggest advantages of options in the forex market is that brokers can trade flexibly and flexibly. It also predicts price changes in currency pairs, allowing you to achieve a high return of more than 80% in minutes.
Make the most of forex trading
Common trades include choosing a currency pair. For example, you choose EUR / USD and decide whether it ends above or below the current price in an hour. If you expect the price to rise, then choose the ‘currency’ option, or if you think the price will be lower than the current price, then choose the ‘Put’ option. If the closing price is higher than the price purchased with the ‘currency’ option, it becomes ‘money’ at expiration. If you choose the ‘Put’ option and the closing price is lower than the price you bought, you make more than 60-80% of the ‘earn money’ trade. Even the smallest portion of the pipe above or below the strike price can profit within an hour. But in traditional forex trading you need at least 81 pips in $1000 x 100 leveraged trading.
Powerful Hedging Tools
With a short expiration period, you can take advantage of news events that can cause market disruptions without interruption. One of the most interesting applications of Forex Binary Options is that it can be used as a powerful hedging tool. This allows traders to transfer risks above and below the buy point. If you take a traditional long position EUR/USD with a stop/loss and buy a binary option ‘Put’, then you compensate the losses or profits from failed long position trading. The risk moves from below stop/loss. If the rally continues in the right direction, it could end in a successful deal. This makes investing in binary options more fun, interesting and less stressful for novice traders. Read this great article from Mifune to learn more about hedging .
Fundamentals of Forex Binary Options Trading
One of our professional traders and founder of a fund management and trading advisory business shares his thoughts on the fundamentals of binary options trading and the system he personally uses.
The strategy I want to talk about is no secret. But this is not unusual. The reason for success is simplicity.
The currency pair I mostly trade (90%) is the Euro-Dollar pair. This is because it is the most volatile and predictable pair. Euro-dollar is the most traded pair, and the daily trading volume has increased significantly since the Forex market was opened to retail investors. Euro-dollar is also a common pair used by financial firms to prepare their clients’ income against market fluctuations.
The main problems you see every day while reading the Binary Options Forum are different strategies. Traders believe that the more complicated the system, the better the profit. Then if it fails, you blame the system you are using and the problem is actually behind the scenes. No system can adapt to changing market conditions. The trader must adapt the approach.
I would argue that it won’t work in this or that market situation, but they forget that the market itself is binary. The price may go up or down. There is no such thing as a fluctuating market. And the heart of every trading system is the same. The task of the system is to locate the best entry and exit points for traders.
Seasoned traders quickly spot support and resistance levels on a chart. Rookie doesn’t. The newbie will use probability, MACD and RSI to implement the strategy.
For binary options, knowledge of finding the best entry point and predictions for the next price change is important. In binary options every 10-th picture-in-picture count.
Disclaimer: This section represents personal opinions and strategies for personal use. Before you fully understand how your strategy works, you should read everything carefully and avoid using high-risk strategies. Trade before going live using a demo account. This strategy is the Holy Grail because it is not that greedy. If you don’t experience the deal, I simply pass and wait for the next one.
Forex Fundamentals
It is important to understand the definition of foreign exchange and what are its main uses. Currency exchange is governed by procurement legislation.
Simple hypothetical example: Apple sells a million iPhones in Europe in September in euros, with a base currency of 500 euros. Trading through HSBC. In other words, the receiving account belongs to HSBC. But Apple reports in dollars and the managed account is in the BOA.
So Apple has now invested 500 million euros in the HSBC account in Luxembourg. This amount should now be transferred to your BOA account and converted to USD.
Now that’s nice. Transfer orders are available on Tuesdays at 16:00 GMT. It will not be sent immediately. The bank collects all dollar orders during the night. Orders can be ordered from yesterday or a month ago. Banks send work orders to partners (like us) and commission structures and deadlines.
Euro-dollar traded at 1.27000 at 6 GMT on Wednesday. BOA’s Apple account receives $665 million in EST (08:00). The order is set at 1.27000. How can we and the two banks best benefit from the order?
BOA receives a fee from Apple, but what about HSBC?
At 08:00 London opens, the liquidity is €380 million and the price is 1.27010. So 500 million euros corresponds to 635,050,000 dollars. There is not enough money in the market yet, it is not enough and cannot run.
The outlook for the euro is bullish, the Asian market rose overnight, and the US fiscal cliff is unraveling. Millions of retail investors and outlets take BUY orders and drop 10 pips at current prices. The liquidity market is €300 million and the current liquidity €380 million. Therefore, the total equivalent liquidity of the USD currently in the market (1.27010) is 482,638,000 USD and 381,030,000 USD pending (same as suspension).
According to the data, the stop is 1.26910, so at 8:15 GMT the order reaches 2.8 times the available liquidity (orders for the sale of 840 million euros). This results in a price of 1.26905. The order is initiated and the retail investor makes a new order to cover the loss. The price rises to 1.27099, it’s time to gradually exit the BUY position, and people buy orders because the trend still looks strong. If you have run well on the chart, you can see that the green candle is getting smaller.
So the market liquidity rose to 380 + 300 = 660 million, up 9.9 pips (from 1.27000) to 1.27099. Not much to say, but we provided Barclays leverage 10 in our position for a commission of 0.1 points. So the leveraged market value of 500 million euros is 5 billion euros, that is, 5 billion / 100 million = 500 million lots X 10 USD = $ 5 million pips X 9.9 pips = $ 49.5 million or 36.1 million euros. This is shared between HSBC, us and Barclays.
The number above is just one example. In reality, the volume is huge (4 billion dollars daily) and many players, but this example is intended to show how FX works and is needed when analyzing SR levels and trends.
SR levels are defined by big players (Smart Money), and they are also held by retail investors. Smart money cycles occur in three price cycles, with short-term channels showing a strong cumulative price (USDUSD last week during the US session).
Forex system – Fibonacci
These price cycles do not occur randomly, they are in order, and in fact every candle or price movement has an internal cycle and order. This sequence is defined by a series of numbers called Fibonacci numbers.
Fibonacci numbers were not developed for trading, and occur everywhere in the natural world that can describe many biological systems in a short-like sequence.
Major players do not use statistics like RSI, CCI or MACD, and the algorithm is based on Fibonacci numbers.
Combining Fibonacci knowledge and information on highly accurate price channel calculators and other trading methods can give you a formula to dominate all other systems and strategies.
Now why are you interested in binary options trading? Unlike Spot FX, it has to be right every time. You basically need to be able to predict whether a candle is red or green.
During weekly trades that don’t include smart money orders, you want to wrap the pipes easily, so you need to use something that defines price cycle shifts and reverse journals. For binary and spot fx day trading we use 3 indicators with very accurate functions.
Forex Correlation
Forex correlation is an important trading tool. If you don’t know what they are, they can hurt your deal without you even knowing it. From correlation it can be seen which forex moves together, which forex moves in opposite directions, and which forex trades have little to do with each other. This information can determine which trades we should take, control the risk, and provide additional trading opportunities that are not easily visible on the price list.
Forex correlations are usually displayed in the table with values between -100 and 100. A value of -100 (negative is called inverse correlation) means that two currency pairs are moving in exactly opposite directions. One falls and the other rises. A value of 100 causes two forex pairs to move simultaneously. One goes up, the other falls, the other falls. It is very rare to find an asset that has a correlation of 100 or -100 with another asset. As you can see in Figure 1, there are many forex pairs that have a very high positive or negative correlation with each other.
Figure 1. Daily Forex Correlations (July 25, 2013)
Consider a significant correlation above / + 70 and a strong correlation above / + 80. Use the chart above to find GBP/USD on the left, then find EUR/USD on the top, then scroll to the box where the rows and columns meet. The correlation between GBP/USD and EUR/USD is 89.6. That is, in most cases they are synchronized with each other every day. It is important to know why you are discussing in the next section.
Now find USD/CHF on the left, then find EUR/USD on the top. If you find a box where the rows and columns meet, the correlation between these two pairs is -95.4. This means that they have a very strong inverse correlation. If EUR/USD rises, USD/CHF falls, and vice versa.
Sometimes not relevant. If a pair has a correlation value of less than 60 (positive or negative), the correlation is not very strong and there is no correlation between pairs as they approach zero. For example, NZD/USD and EUR/USD. The correlation between these pairs is -1.7, and there is not an observable correlation between these pairs every day. In other words, if NZD/USD goes up and down, you have no idea what EUR/USD can do.
Correlation tables are typically provided based on hourly, daily and weekly periods. All these periods contain useful information based on the duration of the transaction. For short-term trading, hourly and daily correlations are most important.
It should be noted that the correlation is always changing. Currently, it is possible that pairs with a very strong correlation do not undergo the path. Therefore, it is important to monitor correlations regularly to be aware of the changing relationships between pairs.
Why Forex Correlations Matter
There are many reasons to consider forex correlation. The main reason I monitor is to control risk. For example, you can think of yourself as ‘diversifying’ by executing several trades at once. But it may not.
If you sell (buy) USD/CHF in EUR/USD, GBP/USD for a long time, you will essentially be taking three very similar positions. If one is against you, they will all be against you. Diversification did not reduce the risk. You have actually tripled your risk!
Another reason why forex correlation is important is because it can provide an agreement that they may not have seen. For example, I think that EUR will rally against USD (eg EUR / USD will rise), but I don’t see the big trade setup by looking at the chart. I know that GBP/USD usually goes with EUR/USD (according to the current correlation), so you can check GBP/USD to see if you have a better trade setup. In addition, USD/CHF moves in the opposite direction of EUR/USD, so you can also check for shorter (buy) trades. High correlation (positive to negative) offers alternative trading. Choose the one with the best settings for trading.
I also want to use forex correlation to confirm the transaction. If you find a strongly correlated forex pair, use one pair to check the other side of the trade. For example, if EUR/USD is rising and you want to hold the currency long, you also want GBP/USD to rise. Since these pairs are related, they must move together. If it doesn’t, I’ll have to take a closer look at my trade. This does not mean that the correlation will change and that the two pairs will not trade because they are not in perfect harmony. It just means you have a reason to trade.
Correlation can be a complicated statistical topic, but with this introduction you can also master the concepts and do your own homework. Check the correlation study regularly to find out the relationship between forex pairs that can influence the trade. Use correlation data to control risk, find opportunities and filter deals. If you are having trouble seeing how the correlation works, look at the numbers in the correlation table and get a price chart of the two forex pairs involved. Notice how the pair move in relation to each other. This helps a general understanding of correlation.
Forex signal
Forex is a rich hunting ground for signal and alarm services. Volatility is high because there is no central market and there are many drivers. Forex pairs are traded 24 hours a day, five and a half days a week. The volume of currency traded is enormous. All these factors mean that the opportunity is huge, and the signal service offers regular trading suggestions.
As a more established way of trading, forex signal providers are more established than binary platforms. Many of the best services have been operating for ten years. Thus, potential customers can check the performance of a large amount of past performances to see how good the service is.
Service providers also have high confidence in their systems, given their long-term performance. For merchants, this means a free trial or membership discount for new customers. Signal services know that traders can only be impressed by the results, so they are encouraged to trade without risk.
Best provider of forex signals?
We have seen many forex signal services and related advertisements. Results are important to us. For this purpose, we suggest that Signal Hive offers the best forex signals. The reasons for this are as follows:
Check out these monthly performance figures since 2004.
The service, called Master T-2000 v2, generates nearly 14% annual revenue. Signal Hive is the marketplace for other systems, but the most consistent. 14 years of performance cannot be ignored.
Most importantly, you don’t have to take our word for it. The system is available for free trials offered by the company. Therefore, you can get this signal for free without any risk.
Some major brokers allow you to automate your software. With MetaTrader 4 integration and real-time indicators, the software is as good as we’ve seen. After using the free trial, the full pro service costs $50 per month. However, if you are not satisfied after the trial period, then transfer first.
Drill with signal detail
Apart from the number of headers, the system is very consistent. The data can be analyzed hourly or by day of the week, and in the long run all periods are profitable. So software and algorithms simply choose a good match.
Signal Hive, as the name suggests, delivers a variety of signals. In addition to the Master T-2000 v2, there is a system call Multi-Entry Logic Investment And Savings Algorithm (MELISA). This algorithm works well in times of turmoil in more traditional markets. Again, it has benefited every year for the past 14 years. With investors looking for a safer haven, this system can currently offer an element of diversity.