CurrenciesFx is a Forex Trading website developed by Qexpert.com. The website consists of several sections including learning, research, and reviews. CurrenciesFx partners with a lot of regulated Forex brokers to provide traders with the best trading deals in the industry. You will be informed about trading promotions such as Forex bonuses, trading rebates, and trading contests:
Introduction to Currency Trading
Trading Forex currencies is very popular nowadays. The long-term profitability of any trader is determined by effective macroeconomic analysis, good information, and the right trading strategy to take advantage of any opportunity.
(1) The first thing a currency trader must do is select a strategy that is suitable to his profile. This profile should reflect risk tolerance, growth expectations, and special needs.
There are scalping, intraday, swing, long-term, and carry-trade strategies
(2) After the right strategy is selected, the next step is the creation of a trading plan. This trading plan must include (a) detailed trading setups, (b) entry/exit conditions, and (c) a money management (MM) system.
□ Create money management rules and follow them with extreme discipline
□ Never change your setups to catch the market, let the market come to your trading setup by using pending orders
(3) Last but not least, the trader must select the right Forex Broker. A good Forex broker should provide safety of funds, low trading cost, good customer service, and effective technology
- Prefer ECN/STP brokers and avoid dealing desks (CFD brokers, etc,)
- Open an account with a regulated broker that (1) has been operating for more than 3 years in the market, (b) offers segregated bank accounts, and (c) offers a compensation scheme in case of insolvency
- Start trading on a demo account before depositing any real money
The History of the Foreign Exchange Market
Currency names vary from country to country based on domestic culture and linguistic factors. Many monetary units got their name by the domestic word for ‘weight’ or the word for ‘golden’. This was happening probably because these domestic currencies had an equal value of their weight in gold.
Monetary Empires and Historical Patterns
The legendary hedge fund manager Ray Dalio offers an insight into the dynamics that he saw when studying the rises and declines of the last three reserve currency empires (the Dutch, the British, and the American) and the six other significant empires (Germany, France, Russia, India, Japan, and China) over the last 500 years.
The exchange rate models seek the identification of an equilibrium between two economies to calculate the fair value of the exchange rate. Equilibrium is based on the relative valuation of an identical commodity, relative inflation, the relative level of real interest rates, etc.
Four (4) Trading Lessons
Four currency trading lessons by CurrenciesFx:
(1) Market Analysis
Market analysis refers to the process of studying market fundamental data and measuring the dynamics of future demand and supply to identify risks and spot trading opportunities. » More on Market Analysis
(2) Market Sentiment
Market sentiment refers to the prevailing attitude of investors in a particular market. » More on Market sentiment
(3) Trading Rules
Trading is a zero-sum game, and as a few people are making a lot of money, there must be a lot of others who lose. That means that basically, you should trade against the crowd. » More on Key Trading Rules
(4) Money Management
Money management refers to a set of rules and techniques aiming to minimize portfolio losses in the short term and maximize profits in the long term. » More on Money Management
Forex Trading and Timing
The Forex market includes 3 trading sessions: the US Session, the Tokyo Session, and the London Session. Between each of these 3 sessions, there is a period when two sessions are opened simultaneously. These common time frames generate high volatility and volume activity and thus constitute the perfect time for intraday traders.
- The London and Tokyo markets are open at the same time between 3 am and 4 am (EST)
- The US and London Markets are open between 8 am and 12 pm (EST)
Most Volatile Days of the Week
- According to historical research, the major currencies are more active and volatile in the middle of the week
- That means from Tuesday to Wednesday but Fridays also are very busy until midnight (EST)
Forex Trading Research
Researching the Foreign Exchange Market based on historical data and cyclical patterns. Learn about smart money, cross-market correlations, and Forex institutional trading.
Following the Smart Money (Smart money can be defined as the capital invested by traders with expert knowledge and often with inside information. Smart money can spot trends before others and trades basically against the general market sentiment)
Intermarket Analysis (Intermarket Analysis investigates the relationships between different financial markets. The following Intermarket analysis focuses on four major asset classes: bonds, currencies, equities, and commodities)
Institutional Trading (Institutional traders are large players managing great sums of trading capital. They include Investment Banks, Hedge Funds, Mutual Funds, Investment Firms, and some large Commercial Corporations)
The Order Book (An order book is a ledger showing the Depth of the Market (DoM) consisting of a complete list of buying and selling orders for a particular financial-traded asset at a particular time)
Algorithmic Trading (Algorithmic trading, refers to a trading method where order execution is based exclusively on a pre-defined set of rules and instructions)