iBlogForex » Forex Brokers

Trading Foreign Currency Online

Jon — Sat, 08 Mar 2008 04:22:05 +0000

Online foreign currency (Forex) trading is available through most Forex brokers. Brokers will usually offer you a choice of trading with a web based application or a desktop application that is installed on your computer.

The advantage of using a web based application is that you will be able to trade Forex from any computer in the world that has the internet. The disadvantage of trading this way is that often web based application are slower than desktop applications.

There are so many brokers offering online foreign currency trading it can be difficult to decide which one is right for you. Fortunately they make this easier by offering free practice accounts where you can put their platform to the test before you commit any real money.

Trading Forex With A Mini Account

Jon — Tue, 04 Mar 2008 04:03:01 +0000

Most popular Forex brokers offer Forex mini trading accounts. Mini accounts are great for traders new to the Forex market and for those who have limited funds. Forex mini accounts can be opened with as little as $250, whereas standard accounts generally require $2,500.

In a mini account, the size of each contract is 10,000 units of the base currency (often USD), whereas in standard Forex accounts the size of each contract is 100,000. So, a Forex mini account allows you to trade 1/10th the size you could trade in a standard contract.

Another advantage of a Forex mini account is if compounding is part of your strategy you will be able to begin compounding earlier than you would if you had a standard account.

Most Forex brokers will give you the same tools and services regardless of what account type you have, so you really can’t lose by choosing a mini account.

Free Forex Charts At Daily FX

Jon — Tue, 04 Mar 2008 03:29:20 +0000

The best way to access free Forex charts is to open a currency trading demo account with a Forex broker. Most Forex brokers have their own trading platform you can access the charts from and many also offer their data feed through the popular platform MetaTrader 4.

If you just want to have a look at what a currency has been doing but you don’t necessarily want to start trading Forex Daily FX offers free Forex charts.

Simply choose a chart and wait for the application to load. You can then choose from a variety of chart types, currencies and periods and add on basic studies if you like.

These charts are great for a quick look at a currency but are not ideal for those serious about Forex trading due to the limited data available and limited tools as compared to a desktop application like MetaTrader 4.

What is Currency Trading?

Jon — Thu, 28 Feb 2008 05:12:33 +0000

Currency trading on the Foreign Exchange (Forex) market is the simultaneous buying of one currency and selling of another one. The currency pair used for the trade is called a cross. The most commonly traded currencies are referred to as the “majors”, these are; EUR/USD, USD/JPY, USD/CHF and GBP/USD.

Currency trading is performed for a number of reasons, some of the main reasons are;
- To profit from long-term or short-term trends and fluctuations
- Companies hedging their international commercial contracts, to ensure a certain profit is locked in when the contract is completed.
- Companies/Investors/Banks/Hedge Funds diversifying their wealth into different currencies to minimize the risk of a drop in their home currency affecting their wealth.

Currency trading can be performed 24 hours a day 5 days a week, through Forex Brokers.

An Introduction To Forex

Jon — Fri, 15 Feb 2008 06:26:36 +0000

With the increasingly widespread use of the internet, foreign currency trading has never been more accessible to investors. The participation of large international corporations, hedge funds and banks makes the foreign currency (Forex) market the most highly traded and most liquid market in the world. The Forex market is open 24 hours a day, 5 days a week, with more than $1.4 trillion dollars changing hands every day.

This tremendous liquidity together with the availability of different currency pairs can result in a high level of volatility on a day-to-day basis. Forex markets are also highly affected by financial news releases which are relatively frequent and can bring about huge swings in the value of a currency. These fluctuations in price give traders opportunity to profit. Forex markets offer investors the ability to profit in both rising and falling markets. With a wide range of instruments to trade and highly leveraged trading, it is possible to begin trading Forex with a very small account.

Most of the instruments traded on the Forex market have a minimum trade size, calculated on the base currency, a common minimum trade size is 100,000 units, for this reason the use of leverage is essential for traders. Many Forex brokers offer mini accounts, where traders are able to place trades with a minimum size of 10,000 units.

Currencies are always priced in pairs, with each trade resulting in the purchase of one currency and the sale of another. If the currency you are buying increases in value relative to the currency you are selling, you will make money. The first currency in a pair is the base currency and the second is the counter or quote currency.

Forex quotes include two prices, a bid and an ask price. The bid price is the price at which you can sell the base currency in exchange for the counter currency. The ask price is the price at which you can buy the base currency in exchange for the counter currency. There is always a gap between the two prices, referred to as the spread. You can calculate the spread by looking at the last two numbers in the bid and ask prices, for example if the prices are 1.8967 / 1.8971, the spread is 4 pips, so the trade would need to move in your favor by 4 pips for you to break-even.

Margin in Forex is a deposit taken from the trader’s account to cover any future trading losses. The margin required is calculated automatically by your Forex broker before the trade is placed. Your Forex broker will generally close all positions held if the trade turns against you and your trading losses are close to emptying your account.

If you hold a currency pair overnight, you will be charged or paid the difference between the two interest rates of the currencies you are holding. Your interest will be calculated each day as part of the rollover process. If you don’t hold a position overnight you will not pay or receive any interest.

Trading in Forex can be quite similar to trading other instruments but does require a slightly different way of thinking. The best way to learn how it all works is to open a currency trading demo account and start experimenting with placing trades. The high level of leverage available to Forex traders can bring great opportunities but also has the potential to bring significant risk. Before trading with any real money traders need to have a money management plan to ensure the decisions they make are appropriate for their account balance.