Tag: forex market

Types of forex order execution in forex trading

Trading Articles
Most forex traders and investors, especially at the entry level to the currency exchange markets do not realize that the markets are extremely unpredictable. This is often true due to the popular notion that forex traders expect that there are some rules that dictate the movement of the foreign exchange markets. This is a wrong assumption as many traders find themselves at a disadvantage at a later point in time (or trade). Most traders focus on trying to learn the mechanics of the foreign exchange trade and spend their efforts on trying to find a utopian method for predicting movements. That is how it can be summed up. An utopian effort. Having said that, there are various trading tools to assist forex traders to predict the direction of the markets and such tools usually do quite an e...

Forex Trading – A beginners perspective

Trading Articles
At the outset, in any forex trade that is executed, traders can earn or lose money due to the market fluctuations that occurs to the buy and sell rates as compared to what the original rates were when you initially entered into a position. If your trades were to earn, then the currency that is bought would have to increase in value so that when you exchange back you would get more than what you put in. In other words, buy low, sell high. If this was not the case (which can be true if you do not follow a trading strategy) then the currency that was bought might have grown weaker. Currencies will always have an economy behind them which forms one of the driving factors in influencing the exchange rates and if you put two currencies together (which is always the case) you are trading two e...

What is a forex expert advisor?

Trading Articles
Contrary to what you might expect, a forex expert advisor is not a person who advises you on how to trade. In fact a forex Expert Advisor is a very sophisticated trading software tool. The forex Expert Advisor is a piece of software written specifically for the MetaTrader Platform. An Expert Advisor can just advise traders which trades to make or can be programmed to automatically execute the trades on a live account. Forex Expert advisors are written in a proprietary programming language called MQL4 or Metaquotes language, version 4. MetaTrader 4 is a trading platform that is free of charge and convenient for trading on the Forex market. The MT4 is also one of the most popular trading platforms available. The MetaTrader Indicators, MetaTrader Forex Expert Advisors, MetaTrader scripts a...
What is a rollover or swap in forex trading

What is a rollover or swap in forex trading

Trading Articles
Often refereed to as a forex swap or forex rollover, a rollover or a swap in forex is the interest earned or deducted for holding a position open overnight. Each currency has an interest rate associated with it, and since forex currency trading is traded in pairs (ex: EUR/USD), every currency trade involves not only two different currencies but two different interest rates as well. Invariably, both interest rates will be different and this is how "swap" or "rollover" is either gained or paid. If the interest rate on the currency that is bought is higher than the interest rate of the currency you sold, then you will earn rollover (positive roll) and conversely, if the interest rate on the currency you bought is lower than the interest rate on the currency you sold, then you will pay roll...
Forex hedging tips explained

Forex hedging tips explained

Trading Articles
Hedging is nothing but a fancy term for insurance, often used in the financial markets despite most traders misreading this term as trying to make a profit from both rising and falling markets. The reason behind this gross misunderstanding of the term has largely to do with the term hedge funds. As one might already know, hedge funds are expected to perform regardless of the market direction; ie. Rising or falling markets. Therefore it is easy to see where this concept of hedging which is primarily all about minimizing losses by way of insurance had transformed itself into a misunderstood concept of making a profit irrespective of the market rising or falling. So what exactly is insurance? It is those small monthly premiums you pay towards either protecting your home against any theft o...