About day trading

Various strategies are available to individuals involved in online currency trading, and one of the most popular in today’s vibrant currency markets is day trading.

Forex trading is carried on worldwide; because of the different time zones, currency is being traded somewhere on the planet 24-hours a day, seven days a week. As the name suggests, employing a day trading strategy means that the trader does not hold any positions overnight.

Because forex trading is performed online, traders are not restricted by geographical location or prevented from trading into the wee hours of the morning if they wish. Many traders take advantage of this, and with automated trading and forex robots they can literally trade around the clock, even while they are sleeping. The day trader, however, does not take advantage of this. Instead, any open positions are liquidated when his or her trading day is over.

The day trader works on the principle that the longer they leave a trade position open, the greater the chance of it becoming a losing one. The trader will typically open multiple trades during the day, which means that he or she can take advantage of relatively small currency fluctuations and still be able to make a profit – providing the right trades are executed.

Because the fluctuations during a particular day are often very small, the day trader will usually need to invest more capital compared with those employing other trading strategies during the course of their trading day to make more profit. This increases the day trader’s risk, but also serves to increase the profits from successful trades.

The use of leverage makes it possible to engage in forex day trading without an enormous initial capital outlay; however, it must be remembered that any losses incurred using leverage will need to be paid back. It is important that anyone engaging in currency day trading have the capital to hand to cover any shortfalls, and not take any unnecessary risks.

Despite the need for a higher amount of capital when engaging in online forex day trading, this strategy has proven to be popular with both novice and experienced traders alike.

The importance of forex signals

The part played by forex signals in successful currency trading cannot be overstated. Simply put, forex signals let those involved in online currency trading know when it is the best time to buy or sell particular currency pairs. The information forex signals provide indicate buy and sell points, price targets, and stop-loss levels. In short, forex signals give an indication of how the market is moving and eliminate the need to constantly monitor developments manually.

There are various ways the trader can receive forex signals. The trader can get them through email, instant messaging, smartphone or tablet apps, live currency trading systems, or via the trader’s own desktop metatrader. Once the forex signals have been received, the trader can then place their buy or sell orders.

Understanding and using forex signals can be particularly important for traders new to the foreign currency market, and in some cases can make all the difference between losing trades and gaining a profit. One thing the novice currency trader will need to pay particular attention to is where they receive forex signals from. There are a number of services providing forex signals and, as with any other service, it is important that the trader select one that has a good track record across a considerable period of time. Factors to be taken into account when choosing an FX signals provider should include the cost of the monthly subscription, and whether the trader keeps control of his account or it is done for him.

The type of service provided is also important. Some providers supply only one batch of forex signals during the day, while others provide continuous updates. Which type is chosen will be determined by the individual trader’s comfort level and proficiency, as well as their budget.

Facts about the latest forex scandal

Authorities have been investigating claims that some forex traders in the City of London have, for years been collaborating to fix foreign exchange rates. This latest investigation comes barely two years after the revelations that top banks were rigging the Libor interest rate.

So, what is this latest scandal?

Authorities are investigating at least 10 UK and foreign banks in relation to rigging currency rates in the foreign exchange market. This so-called Forex market has over £3 trillion traded on it each day and is used by banks and other financial institutes to buy and sell currencies to one another.

The investigation is looking into whether the banks have been collaborating to set the benchmark rates, which are released each day at 4pm. The benchmark rate was developed for corporate customers who wanted a simple and transparent rate set for them each day. Manipulating this rate could be very valuable for those who collaborated.

It is alleged that several forex traders have been colluding over a number of years via instant messaging services to discuss what would be the most favourable rate to set the day’s benchmark. Corporations who use this benchmark may actually end up losing money or not profiting as they should if the benchmark has been rigged.

The investigation is still ongoing, but a number of forex traders have been suspended until the investigation is concluded.

What to look for in Forex trading

Forex websites provide valuable resources for anyone who is interested in the exciting world of currency trades.  Much has been said about this form of trading in recent years, and interest in it is growing rapidly.  Potential investors are attracted by the relatively lower risk involved as well as the good earnings potential.

When choosing a provider for Forex trading services, there are several helpful things to look for.  One is a good price for the services provided.  Investors want the services they use to be affordable, yet also provide a lot for the price.  There should be maximum flexibility allowed in how you do your trade analysis.

Helpful tools should be available, as they make the entire trading process much easier.  There should be compatibility across different devices and operating systems.  Since many prefer to conduct their trades on the go, this is the best solution for keeping up with any developments.  A trader should be able to easily use a customised strategy from start to finish and have access to any tools that make the process easier.

Another important aspect of the trading process when choosing a provider is the information that is available.  All of the latest news should be readily available for better decision-making in trades.  Expert commentary is also helpful, because this sometimes provides a fresh perspective on key trading and financial issues.

One of the most important things to look for is the level of support available for customers.  There should be several ways of getting in touch with experts when you need the help.  The advice of a strategist always matters when making an important trade.  Even when these features aren’t used, it is always valuable to have them available.  You never know when help or advice may be needed.

Forex trading advantages

Forex trading sites are examples of how popular this form of trading has become in recent years.  Because it makes up one of the largest markets in the world, any wise investor will be doing well to take advantage of Forex.  In uncertain economic times, many prefer diverse portfolios.

One of the many reasons why so many investors prefer Forex is because insider trading is not an issue the way it is with stocks.  Everyone has access to relevant news about currency exchanges as soon as it becomes available.  Worldwide market conditions and money flows have a direct impact on prices.  Investors who have had difficulties with other types of trading in the past often decide to try Forex trading because of the more stable conditions it offers.

Another major advantage of trading with Forex is the fact that the market operates 24 hours a day, every day.  Because of the many different time zones in different regions of the world, there is always a currency market trading in one country or another.  There is no need to wait for the next market opening time to take advantage of an excellent trading deal.

This is a trading option that is very profitable indeed, with trading volumes numbering in the trillions.  Even traders who use a broker have major advantages, as currency trading is not subject to the same sorts of regulations as securities.  Overall, it is a winning situation for investors who want to receive good profits without running high risks.

Tradeforex and the risks

One thing that most investors are acutely aware of is that all trading carries some risks.  However, Tradeforex options present a much safer form of investment than many other options.  Utilising a form of effective risk management will help you get the very most out of your experience.

Traders often gain some of their experience by using demonstration accounts, which can be used to simulate high-risk investing.  The main problem with this approach is that it teaches the basic techniques but doesn’t generally correlate with one’s investing situation in real life.  In real life, you will probably be starting with a more modest amount of money and should keep this in mind.

A major advantage that Forex trading offers is the ability to take quicker action when there are changes in the market.  Because there is no need to wait for a certain opening or closing time, you may act on your latest information or instincts straight away.  It always helps to have a clear plan regarding how much you’re willing to risk. 

Many traders wonder if Forex trading is worth the investment if they lack the funding to put into it.  However, the good thing about Forex is that it is still quite workable with a smaller investment.  It is simply a matter of staying within a comfortable spending range.  The longer you trade, the more of an instinct you’ll develop for good and bad trading decisions.    

Ultimately, this is one of the better trading options because of the lower risk that is involved when compared with securities.  Good practises will generally ensure better results.

Improving your trading skills

No matter how long you’ve been trading, there are always times when you might benefit from some new skills and techniques.  Remember that better trading skills ultimately lead to much better profits from trades.

Good planning always counts for more than many realise.  Having a good strategy in place ensures that your techniques will return a good profit for you.  Choose any of the trading pairs that you intend to use wisely, because different pairings often lead to different results.  Your strategy should always include special targets that you set for your own success.  Make sure this strategy includes what you will do when you reach these targets.

Staying as informed as possible is the best way to make the right decisions about trades.  Follow regular news, especially the latest breaking news.  Commentators on Forex sites have the insights that you will need to better understand how different changes might affect you.  There are also charting applications available that may help you with making decisions.  While these methods are not totally foolproof, they do remove much of the guesswork from the trading process.

You will benefit from keeping some sort of log or diary of your activities.  This helps you get a better idea of how your strategy is working and what you can do to improve it, if need be.  Keeping a written record of all your Forex activities is also more organised than simply relying upon the information in your online account.

How to become a forex broker

Becoming a professional forex broker is not as easy as it may seem. This is because someone who intends to become a successful broker must possess specific skills and knowledge in order to perform the job competently. Although this may be quite challenging, the rewards that most forex brokers receive, such as high salaries and great personal satisfaction, are well worth the effort.

What it takes to become a currency broker

Anyone who wishes to work independently as a broker needs a spare room and a computer with a broadband connection. However, even before thinking about the material requirements, they should read as much as they can about forex. There are numerous online and offline publications that specialise in the subject, which are designed to help prospective brokers understand how the market works. 

Additionally, a potential broker must learn forex concepts. The best way to do this is to complete one of the many forex training courses available today. These courses enable prospective brokers to gain professional certification, together with advice on how to develop their level of expertise in the future. Once the individual has enough knowledge and has obtained a forex certificate, he or she is able to open his or her own business or pursue a job working for an existing brokerage. Arguably the best course of action is for a beginner to be hired by a large forex brokerage where he or she can take time to gain as much experience as possible in forex trading.

If the individual prefers not to become an official forex broker, he or she might instead choose one of the courses offered for trading service providers. These people earn commissions by simply referring clients to different brokerages.

Using Forex signals

Forex signals play an important role in currency trading.  Used in conjunction with forex charts, the signals tell FX traders when it is the best time to buy or sell.

These signals form an important of automated forex trading because by sending out these indicators they spare the trader the effort of having to monitor the market himself throughout the entire trading session.  They are particularly useful, therefore, for people who trade forex only on a part-time basis.

Professional FX traders can also use them, especially when trading with multiple currency pairings.

There are various types of forex signal available.  Stochastic signals appear as an oscillating line which appears on a forex chart.  They appear as a visual alert against a graph between zero and 100. The stochastic line oscillates according to price movements.  Broadly speaking, if the line moves above the 80 mark it serves as an indicator for the trader to sell.  Likewise if it dips below 20, the message is to buy.

Another form of forex signal is the Moving-Average Cross alert.  This involves two lines plotting across the forex chart, with one moving more slowly than the other.  Each line represents a period of days, often one will be for seven days, and the other for thirteen.  If the faster line crosses the slower one, that is a signal to buy.  When the slower one crosses the faster line, the signal then is to sell.

Using a similar principle are MACD and Breakout signals.  They also involve lines crossing the price area forex charts to indicate the best times to buy and sell.

Managed forex accounts – how do they work?

Managed forex accounts have been developed for investors who have little or no knowledge, experience or time to trade themselves. Typically, professional brokers manage these accounts in a very careful, yet competitive way. Thanks to these professionals, a managed forex account can provide a higher return on investment than other financial instruments, such as treasury bonds.

Opening a managed account 

Anyone can open a private, password-protected forex account under his or her name with a forex broker. The account owner has access to his or her account from anywhere in the world. An essential aspect that each investor should be aware of is that brokers have access to operate these accounts, but not to withdraw funds.

To ensure profitable results, the accounts are connected to each other under a forex trading platform. Brokers use specific forex systems to place orders simultaneously across the forex platform, giving registered users the opportunity to trade funds. The managed accounts are traded on investors’ behalf via a ‘power of attorney’ and usually ensure significant monthly returns. 

Top things to consider

Before opening a managed account, the prospective investor should check the professional he or she intends to hire. The broker should not only be experienced in managing foreign exchange accounts, but also a have good reputation. Only such a professional will be able to help the investor achieve consistently profitable results trading the forex market. The easiest way to locate a good broker is to check out the opinions of experienced investors on Forex Factory, a platform that is recognised as being the leading forex forum currently available.