Benefits of trading the forex market — Daily Forex Signals
Benefits of trading the forex market
Trading Alerts or Signals — Benefits of trading the forex market . One of the biggest advantages of options trading in the forex market is that brokers are flexible and allow you to trade variations. Moreover, you can achieve high returns as much as 80% or more in a matter of minutes simply by predicting the price movement of a currency pair.
Make the most of your forex trade
A typical trade involves choosing a currency pair. For example, you choose EUR/USD and decide whether the pair will end above or below its current price over an hour. You would choose a ‘Call’ option if you predict the price will move upwards or a ‘Put’ option if you feel the price will fall below the current price.
If the closing price is above the price you purchased with the ‘Call’ option, you will be ‘in the money’ at the time of expiry. If you choose a ‘Put’ option and the closing price is below the price you purchased, you will also be ‘in the money’ and make as much as 60 to 80% or more on the trade.
Even the smallest fraction of a pip over or under your strike price can fetch you as profits in less than an hour. However, in traditional forex trading you will need to gain at least 81 pips on a $1000 x 100 leverage trade. Benefits of trading the forex market
Fundamentals of Trading Forex
One of our professional traders, and founder of a money management and trade advisory firm, shares his thoughts on the fundamentals of trading forex and the system he personally uses.
The strategy I want to talk about is nothing secret — however it is also not very common — and the reason for its success is its simplicity. Benefits of trading the forex market
The currency pair that I mainly (92%) trade is the euro dollar pair. This is simply because it is the most volatile and predictable pair. Euro-Dollar is the most traded pair, and since the opening of the Forex market to retail investors, its daily volume has increased dramatically. Euro-Dollar is also a common pair used by financial firms to hedge their client’s revenues against market swings.
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As an example: A seasoned trader will quickly detect support and resistance levels on a chart. A rookie will not. The rookie will implement a strategy using stochastic, MACD and RSI, but what he doesn’t realize is that these indicators give him the same entry points the seasoned trader uses.
Disclaimer: This sections represents my personal opinions and a strategy I personally use. Please read through everything carefully, and do not jump to using the high-risk strategy before understanding fully how the strategy works. Please trade using a demo account before going live. This strategy is the Holy Grail for me because I do not get too greedy and if I do not feel the trade I simply pass, and wait for the next one.
It is important to understand what forex is and what its main usage is: Exchange of currencies ruled by the laws of supply and demand.
A simple hypothetical example: Apple sells 1 million Iphones in Europe in September for 500 euros a piece with Euro as base currency, they deal through HSBC, meaning their invoicing receiving account is under HSBC. But Apple reports in dollars, and the governing account is with BOA.
So Apple made 500 million euros that now sit in their HSBC account in Luxembourg. That money has to be now transferred to their BOA account and changed to USD.
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Now it gets interesting. The transfer order comes in on Tuesday at 4 pm GMT. It won’t be transferred right away. The bank accumulates all the dollar orders during the night. The orders can be from yesterday or a month ago. The bank sends operation orders to their partners (like us) and the commission structure, and order deadline.
Euro-Dollar is trading on Wednesday at 6 GMT at 1.27000. Apple’s account at BOA will receive 635 million USD at 8 am EST. The order is fixed at 1.27000. So how do us, and both banks get the maximum profit from that order?
BOA get their commission from Apple, but what about HSBC?
At 8 am GMT, London open, the liquidity is 380 million euros, and price is 1.27010. So 500 million euros is equivalent of 635 050 000 USD. Not good enough yet, and not doable as there isn’t enough money yet in the market.
So the market liquidity jumped to 380 + 300 = 680 million euros, and we exit at 1.27099 for a profit of 9.9 pips (from 1.27000). Not a lot you say, but we were provided with a leverage of 10 from Barclays on our position for a commission of 0.1 pip. So our 500 Million euros had a leveraged market value of 5 billion euros, or 5 billion / 100 000 = 500 000 lots X 10 USD = Pip value 5 million USD X 9.9 pips = 49.5 Million USD, or 36.1 million euros. This is then shared between HSBC, us and Barclays.
The numbers above are just an example, the truth is that the volumes are huge (4 trillion USD daily) and a lot of players, but that example is to show you how FX works, and this is necessary when analyzing SR levels and trends.
SR levels are defined by the Big players (Smart Money) and they also hold really well because retail investors use them as well. The smart money cycle happens in 3 price cycles, and then we see a short-term channel where the price is stuck for a bit accumulating strength (GBPUSD last week during US session).
These price cycles do not happen randomly, they have a sequence, and in fact every candle or price move has an inside cycle and sequence. This sequence is defined by a set of numbers called Fibonacci numbers.
Fibonacci numbers were not developed for trading, and they happen everywhere around us in nature, where many biological systems can be described in terms of Fibonacci-like sequences.
The big players don’t use indicators like RSI, CCI or MACD, their algos are based on the Fibonacci numbers. make money trading forex?
And combining Fibonacci algos with extremely precise price channel calculator and information on how others trade, you got the formula to rule over all other systems and strategies.
During day trading that doesn’t involve Smart Money orders, I want to bag easy pips, so I need to use something that defines the price cycle moves and reversals. For binaries and spot fx day trading I use 3 indicators with very precise functions.
Why Forex Correlations Matter?
There are a number of reasons to care about forex correlations. The main reason I monitor them is to control risk. For example, you may think that by taking several trades at once you’re “diversifying.” That may not be the case though.
I also like to use forex correlations to confirm trades. Upon finding forex pairs with high correlations, I will use one pair to confirm trades in the other. For example, if the EUR/USD is rising, and I want to go long (buy calls), I also want to see the GBP/USD rising. Since these pairs are highly correlated they should be moving together. If they aren’t, it warns me that maybe I should look more closely at my trade. It doesn’t mean I won’t take the trade-since correlations do change and two pairs never move perfectly in harmony- it just means I better have very good reasons for taking the trade (as you always should anyway).
Correlations can be a complex statistical topic, but hopefully this introduction gets you familiarised enough with the concepts to do a bit of homework on your own as well. Check correlations studies frequently to be aware of relationships between forex pairs which may be affecting your trading. Use the correlation data to control risk, find opportunities and filter trades. If you are having trouble seeing how correlations work, try looking at the figures in the correlation tables and then pulling up price charts of the two forex pairs in question. Notice how the pairs move relative to one another; doing this will help create a general understanding of correlations.
Forex represents rich hunting ground for signals and alert services. With no central market, and multiple driving factors, volatility is high. Forex pairs are traded 24 hours a day, for 5 and a half days of the week. Trading volumes of currency traded are huge. All these factors mean opportunities are large, and signal services provide regular trading suggestions.
The service providers also have greater confidence in their systems, given their long term performance. For traders, this means free trials, or discounted membership for new customers. The signal services know that traders will only be impressed via results — so they encourage traders to give them a go risk free.
Forex correlations are an important trading tool. If you don’t know what they are, they may be hurting your trading without you even being aware. Correlations show us which forex move together, which ones moves in opposite directions, and which ones have very little relationship to each other. This information then helps us determine which trades we should take, helps control risk, and may even provide additional trading opportunities not easily seen on the price chart.
A powerful hedging tool
With short expiry terms you can take advantage of any news event that can trigger market fluctuations rather than place a stop-loss. instant orders and pending orders
A Forex Definition
Forex (foreign exchange) is the exchange of one currency for another. Global businesses, governments and holiday makers all need to exchange currencies at different times (though is hugely different volumes). Benefits of trading the forex market == The forex markets allow them to do this. The usual forces of supply and demand will dictate the movement of those exchange rates — and forex trading is the active speculation of those exchange rates. best currency pairs
Online forex trading platforms will allow retail investors to speculate on the movement of these rates.
How To Start Forex Trading
Retail investors can start trading forex using the online platforms and software of numerous forex brokers. One difficulty however, is in selecting which broker to choose. One key issue, is that the best broker for one trader, may not be as suitable for another. Instant Orders Vs Pending Orders
There are a huge variety of comparison factors when looking at forex brokers. Many people will look at the offers and spreads, the leverage or margin required to trade, the available assets like gold or Bitcoin or even if the broker is based in a well regulated jurisdiction like the UK or Switzerland.
We cover all of these popular factors in our reviews, but we also try to include some comparison factors that might get overlooked, like the minimum deposit and trade size, the type of spread (is it fixed or variable) and deposit and withdrawal methods such as Paypal or Skrill. Benefits of trading the forex market — Some of these factors will be important to some traders, but irrelevant to others. This makes it hard to suggest a “best” broker that will be right for everyone — but we do still give each broker a rating.
In addition to our comparison lists, potential new traders can use demo accounts to trial different brokers and see which they prefer. This is especially important when it comes to usability or look and feel. Opinions on different online trading platforms will often vary. The best way to judge a particular platform is to use it. This also allows new customers to check the assets they trade frequently are available, and spreads are competitive.
To summarize, here is a list of comparison factors that are worth considering when judging different forex brokers:
- Offer/ Spread (Trading costs)
- Margin or Leverage flexibility
- Minimum Deposits
- Software Integration — e.g. MT4 (MetaTrader4)
- Assets (Are the markets you want to trade available, e.g. Oil, GBP/ JPY or Bitcoin etc)
- Demo Accounts
- Mobile Trading App
Beyond these there might be other important considerations such as does the broker accept traders from a particular country? Some regions such as Australia and the US have different regulatory bodies and many brokers may not service those regions. Our broker tables will generally only show relevant brands, based on your IP. Benefits of trading the forex market
Best Forex Signal Provider?
We have seen a lot of forex signal services, and related ads. For us, results are the important thing. To that end, we suggest FxPremiere Forex Signals deliver the best forex signals, and here is why:
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Originally published at https://www.fxpremiere.com on November 11, 2020.