The differences currency trading has its own unique information to consider. There are many factors at play in the currency market at any point in time. At its core, you are looking at information that affects two major international economies and their currency. If you add into the equation other economies worldwide, there is a significant amount of information you should consider.

Currency Rates: Fundamentals and Technical Considerations

Fundamentals are generally news and information that reflects the current status of individual countries whose currencies are being traded. These include interest rate levels, monetary policy, international trade flows, international investment flows and economic data reports. There is also political and geopolitical fundamentals to consider. If political events are occurring in a country, that may undermine the confidence of the people of that nation, then the value of its currency will likely be negatively affected. This is why currency traders pay attention to what is happening politically. Political unrest can quickly turn a profitable trade into a loser. Those are factors beyond your control, except that you can control how closely you monitor those kinds of situations.

Technical analysis most of the time involves chart analysis, mathematical studies, trend line analysis, momentum and moving averages. Almost all currency traders follow technical analysis and their trading. Again, if you have a background as a stock trader you will be very familiar with technical analysis and for the most part the same principles apply.

If you aren’t familiar with technical analysis, you should begin to familiarize yourself with a minimum of a basic understanding. Technical analysis and learning how to use it is another weapon in your arsenal to help you evaluate potential trades. Some traders trade on technical analysis alone.

It’s quite possible that currency rates and the prices they bring has nothing to do with either fundamentals or technical factors. In some cases, market psychology, sentiment and the natural instincts of traders dictate currency rates.

Remember this, the Forex market consist of tens of thousands, maybe hundreds of thousands of different trading philosophies and traders. Supply and demand, in this case the supply and demand being buyers and sellers can influence currency rates as much as anything.

Interpreting and assimilating all this information is just one component of a currency traders daily ritual. You should be disciplined and you should be dedicated if you are going to trade currencies. Anything less than 100% dedication is a surefire recipe for disaster an extensive losses of money.

Gather the information, process the information, and then lay that information against your trading plan before you pull the trigger on a trade. If the information you get does not trigger a trade within your trading plan, you should wait for the next one. There is an old adage that says, Mason a trade is just like missing a bus. There will be another a bus and another trade right around the corner.

Your Trading Plan

We have written before about the necessity of a trading plan. Failure to execute a viable trading plan is a stepping stone to failure. Successful traders are successful for a reason. No successful currency trader will last very long without a detailed, well conceived, trading plan. Your trading plan will include a specific plan for each position, including an entry point, a stop loss exit, they take profit exit and position size. With those components in place, think for a moment how you would react to market conditions as they present themselves. The answer is you have every potential event covered in the details of your trading plan.

Monitoring Current Events

The Forex trading hours not only present an opportunity to trade almost anytime of the day or night, but our significantly affected by current events. Successful traders are able to monitor current events and look into future events and determine if the market has priced in an expected outcome. At the same time, successful traders can determine what is the likely reaction if the event fails to match expectations. If you are able to build this particular strategy into your trading plan you won’t be left trying to figure out what happened or how you lost money. While others may scramble while the market digest unexpected news, you were prepared if you are monitoring current events and you should have a plan in place to trade the news.

Flexibility

Making money trading currencies is not necessarily about being right and wrong. Successful currency traders are able to resist becoming emotionally attached to a particular position. They are flexible and are able to adapt to current events and news. You must be able to pull the trigger and abandon an open position in the news or events take the market or the pair that you are trading a different direction. While a stop loss as we have discussed will help, your experience in time should be able to tell you it is time to move on. Remain flexible, nothing is written in granite when it comes to currency trading.

Being prepared

If you were to ask any successful businessman or businesswoman what was a key component to their success, their answer would be that they were prepared. Trading currencies is no different. You must be prepared as much as it is possible. Remember the market moves on news and information. You can prepare yourself by reading and forecasting economic data news releases. Find out when central bankers and finance officials will be speaking. Their words are often accompanied by market swings. You should know when central banks set their interest rates or if they are about to change. Remain vigilant and stay aware of time zones in different countries. Unexpected news is a driving force when it comes to currency trading. You should conduct exhaustive research and assimilate as much of this financial data as possible. It is important to note that collecting this data is not a one-time affair. As a currency trader who wants to be successful, you must exercise due diligence on a daily basis. These factors won’t guarantee 100% success, however, they will enhance your chances.

Trading securities like stocks and commodities have something in common with currency trading. All have trading platforms used to trade those securities. There are a number of Forex trading platforms from which to choose, and most differ greatly and the expense for using these programs varies just as much.

Simply put, a Forex trading platform is trading software that is used by currency traders to help with trading analysis and trade execution. Currency trading platforms will help traders order taking methods, as well as provide charts for analysis and comparison.

There are number of options to consider when choosing a Forex trading platform. Essentially your trading platform choice will provide a bridge of information between you and your broker. It will provide quotes, intraday trading statistics, and charts.

Typically it will include an interface between you and your broker for entering orders. Your software can be installed locally on your computer and most platforms are easily adapted to different computer systems, like Windows, Mac and Linux. You will find that many brokers also offer web-based platforms that can be accessed from locations other than your own personal computer.

Most trading platforms are available at no cost, however, many brokers offer more sophisticated trading platforms that offer a higher degree of functionality for an additional cost. Depending on how active a trader you may be in the currency markets will dictate what level of trading platform best fits your needs.

There are a number of other considerations when you go about the process of choosing a Forex trading platform. Primarily look for a trading platform that is simple, and easy to use. Additionally, determine whether or not the trading platform you like is free. If not, how much is that Forex trading platform going to cost?

• Will you be able to add additional features to your trading platform in the future?
• What technical indicators are available on your trading platform.
• What fundamental information is available on your trading platform?
• Will you be able to make trades from available charts?
• Is the user interface easy to understand?
• Does your trading platform have an application program interface ( API) that will allow you to integrate third-party or proprietary software?

Trading currency markets successfully is about assimilating information, implementing a strategy and seeing it through to its conclusion. The more information that your Forex trading platform provides the more opportunity for success you will have. Your platform should include all relevant fundamental and technical analysis.

Perhaps one of the most important components of a good Forex trading platform is the ability to open a demo account before funding an account.

Investing in any form requires that you manage risk. Currency trading is risky investing at its core. Ultimately, the Forex trading platform you choose should be able to help you manage that risk more successfully.

Very few people are born successful currency traders. The ability to practice your trading strategies, trading skills and practice making sound decisions is paramount to your success. Demo accounts will help you to this end. A good Forex trading platform will also allow you to define your trading style.

Again with the use of a demo account you can begin to discern your individual style when it comes to factors like, your trade timeframe, your currency pair selection, the rationale for making your trade and the risk associated with your trade. If all of these factors sound complicated, that is all the more reason for choosing a trading platform that will allow you a demo account to hone your skills.

Choosing the best Forex trading platform for you should be as important as choosing the currency pair in which you wish to trade. Here we have listed some of the Forex trading platforms for you to consider.

• Etoro

• Easy Forex

• Ava FX

You would be better served to open a Forex practice account and begin to develop your strategies without the risk of losing money. Think about it. Professionals all over the world in their chosen profession practice what they do over and over before actually getting paid . Trading currency pairs can be dangerous financially. It only makes sense to open a Forex practice account.
A Forex practice account is a intelligent way for new investors to begin. Your education will include reading books, taking online courses, and perhaps learning from my mentor. However, nothing beats hands-on practical experience when it comes to currency trading. A Forex practice account is exactly as a real time money account with the exception of your own hard-earned capital.
Normally practice accounts are available courtesy of the Forex broker that you choose. In fact, if a broker tells you that you do not need a practice account to begin trading, you would do well to find another broker.

The idea is to test your skills and abilities before risking your money. You will get all the services that your Forex provider would normally provide in a funded account including Forex signals, managed accounts, automated trading and real-time pricing.

You may find on occasion a broker that wants to charge you for it a practice account. There is enough competition in the marketplace to find a broker that will offer this option at no charge.
Once you have opened your account, it is customary for your account representative to walk you through the process of setting up your Forex practice account. This would include a username and password, downloading your trading platform and setting a balance on your account so that you can begin to start to test your theories.
You should take the time to watch markets and watch how currency actually trades. You will be able to watch in real-time, real-world situations and you will be able to educate yourself. You will begin to learn how to read charts, follow trends, perhaps visit online forums to get other traders strategies and opinions. It is quite likely that you will be happy that you are only using the dishes money when you begin to make trades.

One area that a Forex practice account will not let you address is your own emotion. Traders often trade based on emotion. This is typical of trading any security but in particular with currency trading, emotions run very high. Again, your trading plan and strategy has as much as anything to do with keeping your emotions in check. If you find yourself trading on a motion rather than technical and fundamental factors, you should pull out of the market and regroup. Again, this is where a Forex practice account will come in handy.
Once you have gained experience and learn how to control your emotions you will be ready for a real account, to trade real money, and make real profits.

As with other securities brokers many online Forex brokers function as a market maker. This means that your broker is on the other side of your trades. When you buy you are buying from your Forex broker and when you sell your selling to your Forex broker. Larger brokerage forms or market makers provide consistent liquidity and execution of your trades. This is an important factor to consider when you begin your Forex broker comparison.

Forex brokers make money no matter what side of the trade you are on. They’d make money on spreads. Generally speaking market makers offer fixed spreads or variable spreads.
Fixed spreads are exactly that and remain constant, regardless of the market. Because the broker must absorb the volatility of the markets throughout the day fixed spreads tend to be slightly more and wider than variable spreads. Variable spreads fluctuate up and down depending on the amount of interest in the market. In highly liquid markets, variable will be the tightest as low as 2 to 3 pips in the more widely traded currently pairs.

Whether you choose fixed spreads or variable spreads largely depends on you and your trading style. Short-term traders tend to do better with variable spreads. Trading currency around news fixed spreads will offer more stability when the inevitable widening of spreads occurs. Commission free Forex brokers are compensated by the spread between the bid and the offer. If for example you buy from a broker at 18 for example and another trader at the same time cells this position at 14, 15 or less the broker gets his profit.

One of the most important factors when it comes to Forex broker comparisons is your money. Your money is at financial risk with Forex brokerages. Choosing a Forex broker who is has a solid reputation and is registered is suggested. For example if your brokerage firm collapses, your trading account could be tied up in bankruptcy proceedings for months, and even lost. Forex brokers that are properly registered will not be afraid to share that information with you each broker should be registered with the financial authorities in the jurisdiction where they operate.

In the United States Forex brokers are required to register as a Futures Commission Merchants with the Commodities Futures Trading Commission. There are a number of other organizations that Forex brokers register with. Don’t be afraid to ask for documentation as to the registration of any Forex broker you are considering for your trading account.

Additionally, while online trading can be a significant benefit, it can also present technological problems that you should make a plan for. What contingency plans are in place with a Forex broker that you are considering? What happens if your Internet connection is disrupted, or if your power goes out, or if your cell phone fails? There are numerous issues related to technology that you should iron out with your Forex broker before signing on the dotted line. Resist the temptation to sign on with the first Forex broker you investigate. Forex brokers have numerous benefits that appeal do people in different ways.

Ask yourself this question before you begin your search. What do I want my Forex broker to do for me? It’s not likely that you will find someone who will be able to provide 100% of your desires what is a good starting place to begin.

Easy Forex has established itself as a broker that you can trust. Easy Forex has been revolutionizing currency trading in over 150 countries since 2003. Easy Forex offers multiple platform fior those who wish to trade currencies and commodities including the web, desktop and mobile platforms.

Getting Started with Easy Forex

Opening an account at easy Forex is simple. The minimum amount for opening a trading account is $25. This includes setting up your account and payment options. You can be ready to trade in just a few minutes.
Once registered, if you are new to trading you will be assigned an account service manager who can provide one-on-one training. Veteran traders can expect great service and professional market insights from their personal representative.

Whether you decide to trade via the web, smart phone or on your desktop, easy Forex has a platform to suit your needs. You won’t need multiple trading accounts. One trading account allows you to trade on all available platforms.

The web trading platform allows you to trade from any computer wherever you are in the world. You will get real-time rates feeds, and life market news. The TradeDesk™ is a personal trading environment for charting, market information and Forex trading.  You can now also trade Forex market using your iPhone. This platform gives you instant access to any of the Forex markets. Just download the app to your iPhone register your information and you are ready to go.

Easy Forex provides fundamental and technical analysis, as well as charts to help you make an informed investing decision. You are investing your hard-earned money and you should implement all the information available to you to make a decision on where to invest.

Easy Forex also offers transparent cost. Ever heard ‘0 or 1 pip spread’? Sounds too good to be true? Well it is. Easy Forex offer s fixed spreads – which means that whatever the market is doing, your spreads don’t change. Spreads and rolling fees, that’s all you pay with Easy Forex – no commissions on deposits or withdrawals.

Perhaps the most important aspect of Forex trading is the security of your funds. Your money is kept in a separate account ensuring that whatever happens, your money is always available to you. Secure online payments are safeguarded with Verisign with account base currencies available in EUR, GBP, USD, CNY, AUD, PLN, ILS, ZAR, NOK and JPY. Liquidity is provided by global Tier One banks.

The bottom line is investing in the Forex involves a substantial risk. Your money is at risk, and that in and of itself makes trading the Forex not suitable for everyone. However, your concern should not be over which Forex broker you should be using. Easy Forex serves 150 countries worldwide and are licensed in Europe, Australia and USA and have offices in London, Chicago, Limassol, Warsaw, Sydney and Melbourne. Give them a try, you will not be disappointed.

The most common currency trading mistake is either holding or taking a profit too soon. There is a balance that you need to establish. Holding onto a position to all will deplete your capital very quickly. The key element to avoiding this mistake is to follow your trading plan, that has a built-in stop loss and stick with it. Your emotion will take control of the trade if you allow it. You must follow your plan even when losses occur.

That brings us to another common mistake and that is trading without a plan. If you open a Forex account, and you don’t have a solid trading plan, you are essentially asking the market to take your money. For example, let’s say the market moves against you. When do you cut your losses? The same is true working the trade from the other side. When do you take your profit?  If you have not determined when you will cut your losses and when you will take profits and those decisions are not predetermined, you will lose. Either in profit or losses, but you will lose.

If you are trading without a stop loss, you are setting yourself up for another failure. If it were possible for you to be correct on 100% of your trades, you would not need a stop loss. However, if you’re like the rest of us mere mortals you are going to be wrong a percentage of the time. Having a stop loss in place will let you trade another day. A stop loss is an important component of a well thought out trading plan.

Let’s say you have a trading plan and you have stop losses built into it. Many traders began to move their stop loss orders from place to place. These kinds of decisions are generally made on emotion when the trader sees a rapid fluctuation in price. Combined with the human nature of wanting to make a larger profit the traitor moves his stop loss. This kind of behavior also shows a lack of trading discipline. That is not to say moving your stop loss cannot work. When you decide to move your stop loss, move it in the direction of a winning trade to lock in profits. And never move your stop in the direction of a losing currency position.

Trading too many positions at one time and trading too often in the market are two more common mistakes. It is not written anywhere that you have to be trading in the market all the time. And trading too many positions at one time simultaneously is a method some traders use to try and hit it big on one trade.

Finally one of the most costly mistakes that you can make when trading currencies is over leveraging. Trading currencies is more often than not done on margin. Over leveraging can be defined as having too large a position size relative to your available margin. The risk is a small market move against you can be enough to cause your position to be liquidated for insufficient margin. Just because your broker will give you a 100 to 1 position or a 200 to 1 position doesn’t mean you have to use it all.

You should be realistic about your expectations when you begin currency trading. There is no single trade that is going to make you rich. There is however a single trade out there that will break you and your account. Try not to be perfect. Take profits when you can and avoid big losses by using a specific plan and having the discipline to see it through.

At its foundation, at its core, currency trading is simply speculating on the value of world currencies, one currency versus another. It is important that you take note of the words speculating and currency. We will focus our discussion on those words.

Speculation is relatively simple to understand. You are buying an individual security, stock or commodity in hope that you will make a profit. With currency trading you are speculating with various currencies of various countries. Currency trading involves market speculation, and various factors that affect the value of different currencies. Those two factors, combined, provide one of the most exciting and dynamic financial markets in the world.

While speculating is about taking financial risk in hopes of making a profit, it is not gambling. Many people treat currency trading like it is gambling. Nor is currency trading investing. Investing focuses on minimizing risk and maximize the return, usually over a longer period of time. Speculating with currency markets is about taking calculated financial risk, realizing a profitable return and that generally occurs over a very short time frame. While these factors are foundational there are a number of other factors that all successful traders acknowledge. You must be dedicated in both time and energy to trade successfully. You must have the resources, the discipline, the decision-making ability, and the perseverance to successfully trade currencies. Lastly you must gather all the knowledge possible regarding currency trading.

Let’s assume you think you are ready for currency trading and that you possess all or some of those attributes. And you are ready to open your business as a currency trader. Where do you begin?

Currency Trading Plan

The first thing you will need is a business plan, all sound businesses have a plan. In your case you are going to develop a trading plan. You wouldn’t open a business without a sound business plan and we strongly urge you not to open your career as a currency trader without a plan either.

Getting from point A to point B in anything requires a strategy. You need a roadmap on how to get there.

As you probably know the Forex market is the largest financial market in the world when it comes to be the trading volumes. It trades virtually around-the-clock six days a week and presents opportunity like no other market. There are few trading restrictions. There are no daily trading limits, no restrictions on the size of your position and no restrictions or requirements for selling a currency pair short.

Most individual traders trade currencies on the Internet through brokers. Many take advantage of trading on margin which allows individual traders to trade larger amounts by leveraging. And while this method of leveraging can create sizable potential profit, understand that where there is potential for profit, there is an equal or greater than amount of risk. Risk and reward go hand-in-hand.

As with any speculative trading, make sure that you are only risking money that you can afford to lose. This is known as risk capital. You should then formulate a risk management strategy to put limits on how much you could potentially lose.

Currency trading is not for the faint of heart. It is exciting to reap the profits. For some it is a thrill. However, consider that you are risking real money. Real money that you can lose. Financial markets are subject to irrational movements and volatility. It has no regard for you as a person. Don’t take your currency trading wins and losses personal.

Define your currency trading style

One of the first things you will need to do as you begin to develop your trading plan is to define your trading style. Defining your trading style is relatively simple. Essentially you want to determine your trade timeframe, your currency pair selection, your trade philosophy, and your risk tolerance.

Trade Time Frame

How long are you planning to hold your position? Are you more intrigued I capitalizing on short-term trade opportunities or perhaps you are more interested in significant shifts between currency pairs over a longer period of time.

Currency pairs

Are you going to trade a couple of currency pairs are you more interested in trading all the available currency pairs?

Trade philosophy

Different traders examine different trades using vastly different systems of analysis. Some are bound to technical analysis while others seem to lean more toward the fundamentals. Still others like a balance of the two. You will need to establish your trade philosophy as you develop your trading plan.

Risk Tolerance

How much risk are you willing to assume on a given trade or in a Forex market? You should determine this factor before you open an account, before you open a practice account, and most importantly before you fund any account. Some traders like to take a more aggressive approach and have no issues with writing the ups and downs of price movements. Others like to take a more conservative approach. This decision is based upon the individual personality of the currency trader. Don’t let anyone else try to talk you into becoming something you are not. At the end of the day you have to live with your decision. No one else does.

Developing your currency trading plan will help you ensure that bad trades don’t become very bad trades. By the same token a can also take winners and turn them into bigger winners. Remember your trading plan is your roadmap to help you navigate and manage the emotions and adrenaline that the Forex market is known for creating.

Trading currencies is really no different than trading any other type of security. Stock traders execute trades based on trading plans. Commodity traders execute their trades based on specific trading plans. Trading currencies is not easier than any other financial market and you should take the same course of action towards limiting your losses and managing your risk with a sound, specific trading plan that you will follow.

With that plan in hand you will find it much easier to not only make trades but to identify opportunities. Trading opportunities will present themselves by the minute. Your trading plan becomes a matrix in which you can lay those opportunities upon to decide whether or not it is a good fit for your investment dollar.

Stop loss orders

There probably is no more important risk management tool than a stop loss order. We live in a world of a 24/7 news cycle. At any given point in time news can affect currency trading significantly. Unless you plan to stay awake 24 hours to monitor each trade that you make, a stop loss order can prevent a major loss of your trading capital. Your stop loss is a part of your trading plan, and should be based on calculations that you have made before you may the trade. Look at this another way, trading without a stop loss carries with it the risk of unlimited loss. Essentially you could zero out your account. A stop loss order to ensure you live to trade another day. Go to sleep.

Trading Leverage

With currency trading you will find that size does matter. The size of your position will determine how much risk you are exposed to, the larger the position, the more significant the risk. Forex accounts are often tied to margin accounts and create an opportunity for you to take on higher positions through leveraging. The temptation will be to take a large position. After all you’re in this business to make money. There is a limit on your leveraged position, and trading too large a position in relation to your available margin reduces considerably your cushion against adverse price movements. You would be better off to start with a lower leverage position, or not use one at all until you gain experience.

Trading with a plan

Again here we are with explaining the value of a trading plan. Market swings are inevitable and currency trading, as are your emotional reactions that come with those price swings. Having a trading plan that will dictate when you exit and enter a position will reduce your risk and therefore protect your capital. Investing in any security whether it is stocks, bonds, commodities or currency trading is about protecting and preserving your capital.

Take a breather from the market

Trading currency is an intense exercise of concentration and sometimes stress. Stepping away from the market sometimes brings a clearer perspective. If you are able to watch from the sidelines and you are not invested in the market, you will be able to better focus on your own trades when you do enter the market. In other words, your brain, your strategy, and your body would do well to set a time of recovery periodically.

Take profit

One area that often troubles investors of any security is when to take a profit. Taking profit regularly is valuable not only to your account balance but to your psyche. Success breeds success. Many a dollar has been lost on investors greed. Remember you will never be able to choose the highest price point in your trade. This goes back to your trading plan, where did you decide was the exit point. Don’t get wrapped up into talking yourself into, a little bit more. A little bit more often turns into a whole lot less.

In combination with taking profit you should periodically take money out of your trading account. If you’ve made money in the market, you should take some money off the table. Your trading account is not your bank account. Withdrawal money regularly and invest in other investment vehicles, spend the money in other areas. You have spent a tremendous amount of energy making money in currency trading and at some point you have to enjoy the reward.