FOREX Trading
• What Is
FOREX?
• FOREX
Or Futures?
• FOREX
Or Stocks?
•
FOREX Trading for
Beginners
• FOREX
Terms To Know
•
Preparing for FOREX
Trading
• Is
FOREX Trading Risky?
•
The Philosophy of FOREX
Trading
•
FOREX and Fundamental
Analysis
•
Tools for FOREX Trading
•
Trading Strategies for
FOREX
• Trading Systems
for FOREX
•
Reading and Understanding
FOREX Quotes
•
FOREX Profits and Losses
•
FOREX Technical Analysis
Part 1
•
FOREX Technical Analysis
Part 2
•
FOREX Trading Brokers
• The
FOREX Margin
•
What Are Currency Options?
•
What Are FOREX Signals?
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Online FOREX Trading
Tools for FOREX Trading
No matter what you are doing, you always need the right tools for the job.
The FOREX market is no different. There are numerous tools that traders use
to develop entry and exit strategies. These tools help to analyze the market,
and even aid traders in their transactions. Because FOREX moves so rapidly,
software is a necessity as it can be used to automate your trading, and help
protect you against loss.
Knowledge and information, of course, are the most important tools. Just
knowing the current prices and exchange rates isn't enough to be successful.
You also need historical information, and information about current political
and economic situations as well, since all of this has a profound affect
on currency prices. You can find a great deal of information on your FOREX
brokers website.
A FOREX trader may participate in Reactive trading or in Speculative trading.
If you are a Reactive trader, your trades are reactions to current economic
and political conditions or events. If you are a Speculative trader, you
make trades based on what you predict is going to happen. The majority of
FOREX trades are Speculative trades, but either way, you need up to the second
information, as well as historical and current data.
The FOREX trader uses both technical and fundamental analysis. Technical
analysis is based on historical charting. It identifies trends and patterns
over a long period of time. On the other hand, fundamental analysis is based
on current events and conditions, and may come from news sources, political
conditions, trade patters, economic policies, and even interest rates and
unemployment rates. Your broker should have live new feeds as well as streaming
rates to help keep you up-to-date.
Of course, once you have information and knowledge, there are other tools
that are available to make things a bit easier. You can use a RPC - Risk
Probability Calculator - to find trades that have potential gain. Using an
RPC, you can also easily find exit points as well.
Use Pivot Points to predict changes in currency prices. Pivot points are
determined by adding the currency high, the currency low, and the closing
price, and dividing by 3 to get the average. A good pivot point calculator
will indicate whether a price falls in extreme ranges or normal ranges. A
Pip value calculator can be used to find the value of each pip, with various
sized lots. You can also use Pip calculators to find out what the profit
or loss would be in the event of certain market movements.
There are other web based tools that are offered by your broker. For instance,
when you log in to your account at your brokers site to make a trade, you
enter the currency pair, and you will see the exchange rate for those currencies.
You enter the amount of your trade in terms of how much currency you want
to buy and you get to the confirmation screen.
Before you are taken to the confirmation screen, however, you may be given
the option to state how much of your money you are willing to risk, which
in effect places a stop loss order into the transaction automatically. Some
brokers will give you the option of freezing the current price. This means
that the price of the transaction is what that confirmation page says it
is, regardless of slippage.
If you were not given the stop loss rate option during your purchase, you
should be able to go in and set a stop loss order after the trade is placed.
This will automatically sell the currency if it falls below a certain price.
You may also be able to place a limit order, or a 'take profit rate.' In
this event, the currency will automatically be sold when the price reaches
a certain level as well.
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