The sheer size of the forex, or foreign exchange, market dominates all others — even the stock market. Every payment that crosses currencies contributes to its fluctuations and momentum. And without a centralized marketplace, forex activity buzzes practically without cease, with traders waking up and doing business everywhere, in every time zone. To get a piece of the action, you need a forex brokerage with best-in-class technology and stellar support.
As Forex trading can be an income-generating activity, it's important to treat your trading as a business activity - one where you consider both how to maximise your income, how to minimise your costs, and how to minimise the risks. With this in mind, make sure to consider the costs of trading with any Forex broker, before you ultimately select one.
Managing your money in Forex trading comes down to the specific measures you use to increase your profits, whilst also minimising potential losses. Successful Forex trading has far more to do with effective money management than having a handful of good trades, and is one of the secrets that separates those who successfully trade FX over the long term, from those who give up after a couple of trades.
Despite being able to trade 24 hours a day, 5 days a week, you shouldn’t (Forex trading is not quite 24.7). You should only trade a forex pair when it’s active, and when you’ve got enough volume. Trading forex at weekends will see small volume. Take GBP/USD for example, there are specific hours where you have enough volatility to create profits that are likely to negate the bid price spread and commission costs.
A forward trade is any trade that settles further in the future than spot. The forward price is a combination of the spot rate plus or minus forward points that represent the interest rate differential between the two currencies. Most have a maturity less than a year in the future but longer is possible. Like with a spot, the price is set on the transaction date, but money is exchanged on the maturity date.
By contrast, the AUD/NZD moves by 50-60 pips a day, and the USDHKD currency pair only moves by an average of 32 pips a day (when looking at the value of currency pairs, most will be listed with five decimal points. A 'Pip' is 0.0001. So, if the EUR/USD moved from 1.16667 to 1.16677, that would represent a 1 pip change). The major Forex pairs tend to be the most liquid, and therefore provide the most opportunities for short-term trading.
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The foreign exchange market is unique for several reasons, mainly because of its size. Trading volume in the forex market is generally very large. As an example, trading in foreign exchange markets averaged $5.1 trillion per day in April 2016, according to the Bank for International Settlements, which is owned by 60 central banks and is used to work in monetary and financial responsibility. 

Inflation levels and trends: Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
Knowing how the industry is mapped out is important, because the collective combination of all participants creates the market you trade in. The relative weight of the trading party to the market is measured by how much money that party manages – from billion dollar hedge funds and investment banks, to private traders with a few thousand dollars in action.

The foreign exchange market works through financial institutions and operates on several levels. Behind the scenes, banks turn to a smaller number of financial firms known as "dealers", who are involved in large quantities of foreign exchange trading. Most foreign exchange dealers are banks, so this behind-the-scenes market is sometimes called the "interbank market" (although a few insurance companies and other kinds of financial firms are involved). Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions.
In this view, countries may develop unsustainable economic bubbles or otherwise mishandle their national economies, and foreign exchange speculators made the inevitable collapse happen sooner. A relatively quick collapse might even be preferable to continued economic mishandling, followed by an eventual, larger, collapse. Mahathir Mohamad and other critics of speculation are viewed as trying to deflect the blame from themselves for having caused the unsustainable economic conditions.
If you live in the Salt Lake area, you can save time, skip long lines and avoid the language and cultural barriers of exchanging your money overseas by converting your dollars to Pesos, Euros, Dinar, Yuan or other foreign banknotes before you leave home. And when you get home, you can change your currency back to dollars and cents at your friendly hometown currency exchange.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and is the issuer of the products and/or services on this website. It's important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement ('PDS'), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

The main trading centers are London and New York City, though Tokyo, Hong Kong, and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session.
If you've been researching Forex trading, you might have seen the term 'Forex CFDs' at some point. There are two ways to trade Forex: using CFDs or spot Forex (also known as margin). Spot Forex involves buying and selling the actual currency. For example, you might purchase a certain amount of Pound Sterling for Euros, and then, once the value of the Pound increases, you may then exchange your Euros for Pounds again, receiving more money back compared with what you originally spent on the purchase.
In every part of life, discipline is important, but neglecting discipline in day trading may potentially result in huge losses. Success without discipline is practically impossible. You need to be able to monitor prices for extended periods of time without making any rash trading decisions. This is hard and requires lots of discipline. Sometimes seeing profitable market moves that you have predicted but did not execute is painful, yet it is better to waste an opportunity, than to guarantee a loss.
Analysis is absolutely vital to trading. Charts are helpful for both short and long-term trading. You should be looking at daily, weekly, and monthly charts. Fortunately, there are a number of different approaches to Forex analysis, which means every trader can find the right approach for them. The three broad categories of Forex analysis are fundamental analysis, technical analysis and wave analysis.
The yellow boxes above highlight some examples of bullish harami long setups and bearish harami short setups. In this instance, the five setups occur over one trading day. Some days may have more, some days may have less. It is also noticeable that there are some winning setups, some losing setups and one that - if an order was placed for the setup - did not trigger the entry price.
Financial spread betting is only available to OANDA Europe Ltd customers who reside in the UK or Republic of Ireland. CFDs, MT4 hedging capabilities and leverage ratios exceeding 50:1 are not available to US residents. The information on this site is not directed at residents of countries where its distribution, or use by any person, would be contrary to local law or regulation.
Swing trading: Swing trading is a medium-term trading approach that focuses on larger price movements than scalping or intraday trading. This means that traders can set up a trade and check in on it within a few hours, or a few days, rather than having to constantly sit in front of their trading platform, making it a good option for people trading alongside a day job.
Reliability: Is the trading platform reliable enough for you to achieve the trading results you want? Being able to rely on the accuracy of prices quoted, the speed of data being transferred, and fast order execution is essential to being able to trade Forex successfully, particularly if you plan to use very short-term strategies like scalping. The information must be available in real time, and the platform must be available at all times when the Forex market is open. This ensures that you can take advantage of any opportunities that may present themselves.

Day trading can take place in any market, but is commonly referred to in the context of either the Forex trading market or the stock trading market. In order to be successful as a Forex day trader, you need to have a decent amount of capital, and a good amount of knowledge of the market behind you. However, having this doesn't necessarily guarantee success. This is especially true when 'invisible hands' are at work, and when the prices fluctuate enormously during intraday Forex trading.

Day trading can take place in any market, but is commonly referred to in the context of either the Forex trading market or the stock trading market. In order to be successful as a Forex day trader, you need to have a decent amount of capital, and a good amount of knowledge of the market behind you. However, having this doesn't necessarily guarantee success. This is especially true when 'invisible hands' are at work, and when the prices fluctuate enormously during intraday Forex trading.
Currencies are traded as pairs, and the movement of currency pairs measure the value of one currency against another. For instance, the EURUSD currency pair measures the value of the Euro against the US dollar. When the value of the pair increases, this means the value of the Euro has increased against the value of the US dollar. When the value of the pair decreases, this means the value of the US dollar has increased (or the value of the Euro has fallen).

The challenge is assessing which outcome is the most likely, and then opening a trade accordingly. A good starting point for this trading approach is first being aware of upcoming events that may affect the Forex market (refer to our live Forex calendar for the latest events) and second, looking at the effect similar announcements had on different currency pairs in the past. You can learn more about fundamental analysis in our Introduction to Fundamental Analysis article.
Stay calm: As exciting as trading can be, it is still stressful work. There will be a lot of setbacks on your way to the top. Emotions can force your hand to open a trade too early and/or close it too late. The main cause of stress for beginners in trading is the fact that some Forex trades will end in loss no matter what – it's just the way the market is. Just remember that war is not won with a single battle. Rather, it is overall performance that counts.
As mentioned earlier, in a long trade (also known as a buy trade), a trader will open a trade at the bid price, and will aim to close the trade at a higher price, making a profit on the difference between the opening and closing value of the currency pair. So if the EUR/USD bid price is 1.16667, and the trade closes at the price of 1.17568, the difference is 0.00901, or 90.1 pips. (When trading a single lot, that would make a 901 USD profit).
Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using Admiral Markets UK Ltd, or Admiral Markets PTY Ltd services, please acknowledge all of the risks associated with trading.
Both types of contracts are binding and are typically settled for cash for the exchange in question upon expiry, although contracts can also be bought and sold before they expire. The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well.
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