Category Archives: Forex Trading

Recent Developments in the Global Forex Market

Since the 1970s, the forex market has witnessed profound changes not only in terms of size but in how it operates. This has been the result of major structural shifts in the global financial system. Political shocks like the election of Donald Trump as the US President and Brexit in 2016 caused major jolts in the foreign exchange markets, fuelling more hedge funds trading activity and bank trading rooms. The uncertainty surrounding higher interest rates and a stronger dollar could fuel more volatility as 2017 enters the last quarter.

New thinking both in terms of finance theory and practice has led to the growth of numerous new derivative products and financial instruments. Advances in thinking and technology have also contributed to a deeper understanding of the global financial system as well as the techniques needed to operate within this system.

Introduction of Global Code of Conduct

The aim of the Code is to set out global good practice principles in the forex market that offer a common market guide. This includes areas where there exists an element of uncertainty regarding what forex trading practices are acceptable or not. This is designed to address issues surrounding trust and promote effective wholesale FX market functioning.

Towards that goal, among the guiding principles that underpin the work on the Global Code is to promote an open, fair, robust, liquid, and transparent forex market. With the support of a resilient infrastructure, a diverse set of forex sellers and buyers should have the ability of effectively and confidently transacting in a manner that is in line with acceptable standards of behaviour and at prices that are reflective of the market information that is available.

Financial Deregulation

Across the globe, major financial deregulation that includes doing away with government restrictions and controls is taking place in nearly every country. This has led to far greater freedom when it comes to national and cross-border financial transactions and more competition between financial institutions.

Also being witnessed is a fundamental change in investment and savings with investors around the world, both individual and institutional diversifying their range of investments into multiple currencies and across international borders.

Algorithms and Speed Bumps

Over the recent past, algorithmic forex trading has been growing as the appeal of trading signals that are automated also grows. The demand for these “black box” automated tools is boosting quick execution that requires minimal human supervision. In 2017, however, speed-based trading strategies have assumed less significance to currency markets. This may be attributed to the introduction by key interdealer platforms of speed bumps that are coming in the form of latency floors.The years ahead might witness a continued move to strategies that are more passive based on electronic market making.

Increased Usage of Block chain

Forex experts are predicting that blockchain, the global distributed ledger technology that underpins bitcoin trading, will in the days ahead, have a big impact in terms of delivering real-time currencies clearance and settlement. This is an international data structure that enables the recording of transactions and sharing the same across a distributed computers network.

Many trading firms are already experimenting with the usage of blockchain as a way of storing and verifying forex transactions without going through a central authority. This has the potential of speeding speed up and greatly cutting trading costs as well as doing away with legacy infrastructure.

Conclusion

A key beneficiary of these emerging FX trading changes is the forex trader who now has an investment vehicle that was undreamt of just a decade ago. Looking out towards 2020, FX market pundits are banking on lighter regulations, the transforming power of blockchain, and an increased role of humans in the forex trading process.

FX trading account – A must for every new trader

 

forex

forex

Many people are shifting from their jobs to home business because of making huge money in the latter. These people are trading on the FX currency market from the comforts of their home. In order to do this business, you should have the right FX trading account. You will find plenty of broker accounts on the internet and thousands of websites in your search results. Here are a few tips in searching for the right FX trading account?

Registration: You must search the Forex brokers thoroughly. They should be registered with the Futures Commission Merchant and a member of the National Futures Associates. Don’t deposit your money with some company who is new in this business and not properly registered. Your money will be lost overnight.

Cost: Forex brokers make their money through currency pair spreads. The spreads is between 1 to 3 pips for the top traded currency pairs EUR/USD, USD/JPY. USD/JPY, USD/CHF, GBP/USD, USD/CAD. Few brokers charge a small fee per trade. There are firms offering managed forex accounts who will do trades for you. They will charge around 30% of your trade profits plus a per transaction fee. Search for the company offering a fair price.

Leverage: After you know your FX trading strategy and practice it, you will want to start out by depositing a small amount of money. You feel like making more money on every single trade. This is done by leverage. You will want the option to leverage your money by 1:10, 1:50, or 1:100. For doing this, you should have the flexibility with the broker account.

Support: Robust customer support is a must in the trading platform. Whenever you face any technical issues, you should be able to reach the customer support by phone, web chat or email.

Practice account: You should start with a practice account before you start your trading. This is an account feature with which you can trade using fake money. When you have your FX trading accounts, make sure that you have this option.

Follow these simple guidelines to find the best FX trading account. Then find an easy to use trading system that will make you a lot of money whenever you trade.

Forex Trading method – the smartest way to review the trading system

forex-trading

forex-trading

Do you know what constitutes a quality trading method? Or how to figure out which trading method is worth purchasing? In this article, we will discuss the majority of strategies and work out effective approaches to asses a trading method.

If you deeply study the so called forex trading methods and programs available to buy, you will find many disadvantages in it. These include the following:

Most of the forex trading methods are incomplete. Most of the tutorials spend numerous hours in theory, but as far as practical knowledge is concerned, it hardly spends any time in step-by-step strategy that may help in trading.

These products do not include risk management. The most common mistake that most of the traders make is not managing risk to their trades. If the program or the event you are looking at would not provide risk management consistent with the system, you might probably walk away from it.

A lot of these products aim on elementary analysis only. These approaches in most cases happen to be incredibly inefficient and subjective. They require deep understanding of more complex economic and fiscal matters. If you are not able to grasp them fully, your business won’t be successful enough.

They will need you to “day trade”. Most of the systems will engage you in front of the computer almost throughout the day in order to be able to react.

  • So, what constitutes a “good” technique? A good trading system will work in the following manner:

The method has to be complete and should teach the start-up circumstances, entry procedures, preliminary stop rules as well as the exit techniques rules theoretically as well as practically.

forex

forex

The method has to teach and incorporate particular instructions for risk management and money management in compliance with its methods.

The method has to utilize technical analysis, however it cannot be entirely mechanical or programmed procedure.

The technique needs to be functional in regards to time spent putting it on.

These guidelines has helped tremendously in weeding out the “pretenders” between trading methods and highlighting exclusively on the contenders. Methods which in turn offer complete description of the right way to apply, protect and trade. You should utilize these strategies only within your currency trading.