How to Choose a Forex Broker

Choosing the right broker is one of the most important necessity of a forex trading career. Not only is the question of fraud of vital importance, but also the competence of a broker may make all the difference between success and failure. So what are the criteria that a forex trader must keep in mind…

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Trading Psychology

Most traders focus a lot of time on technical or fundamental types of analysis, and some of us will not neglect to improve our skills in money management methods either. But even with mastery of these necessary and important skills, success will be elusive if we do not improve our psychological responses to the pressures…

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Money Management: The Logistics of Forex

A commander can win a battle every once a while by chance, but without adequate logistics, he’s doomed to fail eventually. Similarly, a fortunate forex trader may be profitable now and then with well devised strategies, but without sufficient skills in money management, he’s certain to fail much of his investment in the end.

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The Carry Trade: Let Your Money Grow While Sleeping

Which is the forex strategy equally popular with both institutional, professional traders, and retail forex clients? The carry trade…which is a highly successful, albeit often risky strategy that combines fundamental and technical analysis into a long term strategy. The carry of anything is the opportunity cost of holding it. For example, a gold bar has…

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Trading the News

Trading the news is a short-term trading method. It is mostly a technical approach and involves the quick exploitation of emerging patterns observed in reaction to To successfully trade the news at release time, you need a stable connection, a highly competent broker that does not widen the spread at peak hours and during news…

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Forex Scalping: A High Risk Strategy

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Forex scalping is a high risk strategy in which the trader enters multiple short term positions with the expectation that the small gains made in each trade will in time accumulate to justify the time and effort devoted to the task. Scalping is a popular method because of its ease, and the psychological comfort it…

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Range Trading

Range Trading is one of the safer forms of trading suitable to beginners and advanced traders. A range is an area where the prices move between a support and resistance line, as the face indecision and fail to break out of either. What makes range trading a good choice? In a trending market, we never…

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How To Create A Forex Strategy?

A forex strategy can be constructed with fundamental or technical tools, or a combination of both. A fundamental strategy performs better with a longer horizon due to the weaker relationship between fundamental events and forex market developments in the shorter term. A technical strategy would perform with equal success in both short and long term…

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What is the Trade Balance?

The trade balance is one of the most important statistics available to a fundamental analyst. It states the import and export balance of a nation, or the deficit or surplus registered as the sum of import costs, and export revenues. Trade balance is a component of the current account (which is released separately). Presence of…

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The Producer Price Index: Understanding the PPI

Of the two most common price indexes, the PPI is the second most important. The indicator measures price changes at the producer level, and is useful as an indicator of pipeline price pressures. The term “pipeline pressure” means the passing over of costs from producers to consumers. It is one of the more important factors…

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Non-Farm Payrolls

The non-farm payrolls (NFP) statistic is called the mother of all releases, and for good reason. Apart from stating the total change in employment in the private and public sectors during the past month, various pieces of data contained in the release work to create an impressive picture of general economic trends in the U.S.…

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The GDP Report

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The Gross Domestic Product Report, released by the , is one of the most crucial releases analyzed by traders. Apart from providing a snapshot of production in the past quarter, the release provides important data on inflation, employment, and consumption, all of which are considered by the Federal Reserve in the setting of monetary policy.…

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What are the Major Economic Indicators of Interest to Forex Traders?

There are a large number of fundamental indicators available to forex traders, but a small number have the power of shaking the markets by themselves alone. For instance, leading indicators rarely create much market response, but non farm payrolls releases have an impact that lasts beyond days to weeks and months. The below are examples…

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Interest Rates in Forex: The Centerpiece of Currency Trading

In the vast amount of data received and interpreted by forex traders, nothing has as much weight and value as the main interest rate set by a nation’s central bank. In our era of fiat money, central banks are able to create unlimited quantities of credit solely on the basis of public goodwill. By raising…

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What Are The Major Currency Types?

Currencies may be grouped according to the nature of the economies issuing them in the following groups. 1. Exporter currencies: These nations prefer to dampen the value of their currencies in order to keep their exporters competitive. They maintain large surpluses in the current account, and are able to accumulate large forex reserves over time.…

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What is Fundamental Analysis?

Fundamental analysis is the study of the causes of economic events. In contrast to technical analysis, fundamental studies possess predictive power over the longer term. Although technical tools are necessary for establishing precision and acquiring a higher level, fundamental analysis is the only tool that can add the rigor of causality to trade decisions. Fundamental…

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What are the Main Chart Indicators in Forex?

The most common indicators used by traders are, in no particular order, RSI RSI is a very popular range indicator that has been available to traders for a long time, by the standards of the trading community. The indicator is used to create trading signals by identifying oversold/overbought levels that are thought to coincide with…

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What are Bollinger Bands and how to use them?

Bollinger Bands are a tool for measuring volatility. The indicator is composed of three moving averages, and trade signals are generated by the interaction between the two outer MAs, and also between the price action and the indicator. The two MAs at the top and bottom have the same period and weighting, but they are…

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Fibonacci Retracements

The Fibonacci Series is a naturally occurring numerical pattern beginning with 0,1, and computed by adding each number to the one prior to it in the series. So, we add 0 + 1, and receive 1, which is the 3rd item in the series. By adding to third item to the second in the sequence,…

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Moving Averages

Just about anyone is familiar with what an arithmetic average is. You take some numbers, add them together, and divide them by the number of members in the series. A moving average is a technical indicator in which the values that go into the calculation of the average “move”. In other words, instead of fixed…

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Support and Resistance Lines

In technical analysis, a support line is a price level that resists the attempts of traders to sell of the currency, while a resistance line is a price which cannot be exceeded by buyers on a bullish phase. In cases where both of these values exist, we will be speaking of a range pattern. A…

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How to Read Chart Patterns in Forex?

Let’s discuss how we can make use of the information gleaned from a forex chart for trading decisions. Of course we can’t examine every single detail of this process in this article, but it’s possible to create a brief outline of what we need to do in general. 1. Determine the trend or the range…

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Price Charts: Which One To Choose?

Seeking signals in raw price data is not very productive. The immense sea of numbers generated at every moment means that it is impossible to make sense of everything. So we use charts to create a visual description of price movements for quick interpretation and easy use. Bar, line and candlestick charts are the most…

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Technical Analysis: The Way To Read The Charts

What is technical analysis? Technical analysis is the art of deriving trade signals from charts. A pure technical analyst does not concern himself with data or statistics, focusing on the price action to the exclusion of everything else. Technical analysts believe that prices tell us all that there is to know. Since they already reflect…

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How to Make Use of a Forex Demo Account?

A forex demo account is a practicing tool. If understanding the language of forex seems as hard as deciphering hieroglyphs, the forex demo account is your Rosetta stone. In order to understand all the basic terms, strategies, and methods that can be used in forex trading, all that you should do is setting up a…

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What is the Forex Rollover?

Rollover is the process of extending the lifetime of a currency position beyond its daily settlement period in the spot forex market, where retail traders and forex brokers are active. Under usual circumstances, contracts between two parties in the spot forex market are settled at the end of the day, with physical delivery taking place…

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What Are The Main Forex Order Types?

The orders that you’ll give most frequently to the broker are the take profit and stop loss orders. As their names suggest, the take profit order tells the broker to liquidate the trade and realize the profits once a certain price level is reached. The Stop-loss order is the opposite. If the unrealized losses in…

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What is Margin Trading?

Margin trading is just another term for trading on borrowed money which is risky. The ratio of the borrowed money to the amount that you deposit (your risk capital), is termed leverage. These two concepts are closely related because you use the leverage ratio, and trade size to determine how risky the trade that you…

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What are Forex Pips and Lots?

A forex lot is the minimum amount that a trader’s position must reach before the broker will pass the order to the market maker. For a standard account, this is $100000, and for a mini-account most favored by beginners, the lot size is $10000. Combined with lower minimum leverage, the lower lot size enables traders…

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Currency Pairs?

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Currency Pairs are what stocks are to stock traders with one important difference. Unlike stocks, a currency does not have a fixed price. We can quote the price of the U.S. dollar by referencing the Euro, the British Pound, the Yen, or even gold or silver, while the price of an American company can only…

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