Monthly Archives: September 2012

Information about Forex Signals

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What is a Forex Signal?

In essence, a Forex Signal is an indicator that alerts a FX trader on the nature of the market in terms of profits and losses while also giving directive guidance on whether to invest, withdraw or stay stagnant in the Forex market. Forex signals enable traders to settle on the best time possible to enter or exit a trade.

Basic Information on Forex Signals

Forex signals constitute a short message or an email which is sent through a signal system to traders. From these signals, we can obtain:

A currency pair.

An entry level – a currency value where a trader is advised to get into a market.

Take profit – a currency value where a trader is advised to leave the market with a profit.

Stop loss – a currency value where a trader is advised to leave the market with a loss.

The nature of trading currencies based on the Forex signals is shaky and one should keenly study market trends and not just rely on projections from the technical analysts. There are some exploitative people who may pose with Forex signals which entice people then quickly sink with many people aboard. This is, especially, based on the ever increasing number of con artists who pretend to be genuine analysts of the market and relevant signals to take when they are simply fake people trying to swindle you of your hard-earned money.

Three Useful Actions in a Forex Signal

Based on the above mentioned Forex signals, the three actions below emerge:

Buy action – These are signals that indicate to a person to buy a currency pair. With this action comes TARGET which signals to take profit, STOP signifying stop loss and @ which indicates entry. This type of action normally occurs in a market which is in an upward trend.

Sell action- These are signals that indicate to a person to sell a currency pair. And just like in the buy action, with this action also comes the TARGET, STOP and @ numbers. The action normally occurs when the when a market is in a downward spiral.

Standby action- These are signals telling a trader not to take any action. This generally happens when the market is in an unstable position to conduct a successful trade.

Final Pointers

The next time you receive your Forex signals, act intelligently not just based on what the signals say, but also based on professional guidance from experts in the world of currency trading.

Tapping Into the Rich Potentiality of Forex Charts

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Forex charts are pictorial representations of figures/words/values of trades conducted in the currency market. The price is normally placed on the Y-axis while the changes in time on the X-axis.

These representations of Forex charts are based on data collected from all over the world thus are deemed to be accurate and. The information on these Forex charts is analyzed by professionals in two ways: fundamentally and technically.

Forex Analysis

Fundamental analysis is done by correlating trends in the charts and the events that happen in the market e.g. political, social, economic events and others.

Technical analysis is done by correlating the actual occurrences in the market and the established trend of operations.

Both ways of analysis have always ensured that traders have relative ease in interpreting the immense data from the ever changing currency market.

With the right analysis from these experts, you don’t have to rely on guesswork to make your trade in the currency market; by just looking at the Forex charts, you are able to make informed decisions. In addition, best interpretations are amassed to be based on facts and logic.

Types of Forex Charts

The Forex charts are normally tailored in various forms to suit the different needs of its targeted users. Some forms of the Forex charts commonly used include single currency charts (only one currency represented in the chart) and combination charts (two or more currencies in one chart). Examples of the above include line charts and candlestick charts.

image: Forex Promos

It is based on the heavy reliance of traders on the Forex charts that they come in weekly, monthly or even yearly durations to quench the never ending thirst by these traders. This mainly helps traders by noting valuable trends that are vital for avoiding losses or ensuring profits.

Online Charts

The increasing developments in technology have further simplified the once painstaking duty of drawing Forex charts. With just a mouse click, you can easily access real-time data from the internet and feed them into the computer software which in turn translates them into valuable charts.

In as much as the charts can be easily created and accessed, a trader should go further and keep a keen eye on the Forex charts. Most big movements in the Forex market start from minimal market breakouts so when you see some trend starting to crop in the charts whether to the positive or negative, take note and act knowledgeably.

Through the Forex charts, we are also able to know the real-time prices of currencies. This makes it very easy for buying and sales to occur thus increasing good circulation in the currency markets. As a final point, once you have proved that a tool works, keep on using it and avoid those that prove shaky and prone to losses.

Factors to Consider When Choosing Forex Brokers

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Forex brokers are an integral part in the normal trading of the Forex market. They act as the agents who link the buyer to the seller. If you are a new trader, it is important for you to know what to look for in a Forex broker.

Types of Forex Brokers

Market Makers

Market makes are Forex brokers who offer traders the means to trade with and against the broker. Market makers provide liquidity to aspiring traders by taking the opposition position on their traders. They are responsible for offering traders a single bid per currency pair. Market makers can easily manipulate the market prices.

ECN Brokers

ECN (Electronic Communications Network) brokers provide a medium for the buyer and the seller to contact each other. They are responsible for matching the buyers to the sellers. The ECN allow traders to post their own bids and even see the multiple bids made by other traders.

What to Look for in a Forex Broker?

Below are some of the factors one should consider when choosing the appropriate Forex broker:

Transaction fees

In Forex trading, transaction fees are normally calculated in pips. Choose a Forex broker that offers as low as possible transaction fees.

Customer service

A good Forex broker should provide different options to contact him/her in case of any problem. You should be able to contact him via phone or email with ease. Before you open and fund a real money account – especially in online Forex trading – make sure you are guaranteed of getting good 24-hour customer service.

Minimum account size

Different brokers have different size of lots you can trade on. The minimum trading size ranges from 1000 units to about 100,000 units, depending on the broker. Depending on your amount of money, select a broker that offers the proper units for you to trade.

Research and trading tools

A good Forex broker provides the necessary research tools that help account holders to make serious decisions before trading. Before employing the services of a Forex broker, ensure there are some specific research tools such as the market analysis, indicators and Forex chart patterns that can allow you to get the market information which will give you a basis of smart trading decisions.

Online trading platform

Before choosing a Forex broker, ensure they have an online platform that is secure and easy to use.

Leverage options

A good Forex broker should give you numerous leverage options. You should have different leverage ratios to choose from. Low leverage ratios can be advantageous to you.

If you consider the guidelines above, sure you will get the right Forex broker who will ensure your investment is safe. They will assist you to grow your investment and reap better benefits.