When selecting a forex broker, you need to know what leverage they offer in different circumstances. Remember, brokers offer leverage to entice people to trade more. The more you trade, the more the broker benefits from fees and commission. Leverage is one of the main reasons traders are attracted to the forex market. Generally, you can get far higher leverage on forex than you can get on other financial instruments such as stocks.

Leverage can be used to profit from relatively small price changes in currency pairs. It can increase profits but also losses.

Used wisely, leverage can enlarge your profits. Used irresponsibly, leverage can be your downfall. As a rule, you should not use all your available margin; only use leverage when the forex market is on your side. There are hundreds of currency combinations available to trade on a daily basis. The question to ask is whether the broker offers the currency pairs you want to trade? Most forex brokers offer the major currency pairs, but not all of them cover minor and exotic currencies.

The major currency pairs are the most heavily-traded pairs in the world. They are commonly cross-traded with commodity currency pairs, otherwise known as minor pairs. Adding commodity currency pairs in the mix, the Top 10 major currency pairs covered by forex brokers should be:. Forex brokers typically ignore exotic currencies. These are lesser-known and infrequently trader currencies, mainly from developing and emerging markets. The South African Rand is considered an exotic currency pair. On the other side of the coin, exotic currency pairs offer forex traders huge opportunities.

Forex in Action in South Africa

Exotics can provide good profits where the major pairs are not offering up much in low volatility environments. All forex brokers offer online retail traders a demo account as an entry-level account but they should also offer a micro account, and one with no set minimum deposit requirement. Both are important to attract newcomers to forex trading without putting them at risk of losing much money as they learn to trade.

Micro accounts, also known as cent accounts, are a stepping stone into forex trading. The difference between a micro account and a mini account is that the amount of money traded using a mini account is significantly higher than a micro account. With a micro account, online retail traders receive the same quotes and experience trading in the same conditions as micro or real account but they trade in cents rather than Dollars.

Mini accounts allow forex traders to trade in tenths of a lot 10 units. In addition, a mini account allows traders to trade in units 25 mini lots. With standard accounts, you have to trade or units. Brokers hold onto your money to facilitate trading. Getting your money back from your broker should be convenient, fast and hassle-free. However, if you review complaints about forex brokers online, thousands of them complain about missing funds or problems withdrawing money from their forex account.

In the same vein, depositing money into your forex account should be easy. For online retail traders, the trading platform is your portal to the forex market. Trading platforms can be accessed via your PC and on most mobile devices, ranging from smartphones to tablets.

They typically come with added features such as charting tools, real-time quotes, APIs, news feeds and research resources. The majority of forex brokers offer an electronic trading platform on license from a software developer. The most well-known, popular, and trusted trading platform is the MetaTrader 4, with MetaTrader 5 offering customers more advanced software features. Some offer a customized version of MT4. Proprietary trading platforms are a way for a brokerage to differentiate themselves from their competitors.

It supports multiple timeframes and has a large library of technical indicators that traders can access to overlay their trading accounts. An important aspect of forex trading is slippage which means responsiveness is key. Slippage occurs where a trader places a stop-order loss and a high-volatility event occurs, causing a gap that results in a lower-than-expected value on the trade.

Trading on a responsive platform through a quality broker should limit negative slippage. You need a stable trading platform, particularly if you practice an aggressive trading strategy or make large, frequent trades. A user-friendly interface is one that allows traders to place an order or close a trade smoothly and efficiently.

It allows one-click trading and management of stop-loss and limits. The platform interface should also be easy to navigate and set up trading charts and tools as well as optimised to work with several charts at a time. An automated trading system allows traders to set rules for opening and closing positions.

A trading platform like MT4 incorporates algorithms that offer up suggestions for trades and also allow you to build your own algorithms that automatically places orders according to preloaded conditions. Analysis tools are vital to trade effectively and profitably. Your trading platform should provide a collection of technical indicators that forex traders rely on and add to their charts.

In some cases, traders subscribe to forex signal trading services or apps for certain tools.

1. FP Markets.
2. apa itu trading forex spot.
3. FXTM Pros & Cons!

Forex traders should also subscribe to online resources that provide up-to-date news on the financial and forex markets. Trading platforms like MT4 offer a comprehensive package of technical indicators as well as automated trade capabilities. Also known as oscillators, indicators give traders entry and exit signals before an event affects price movements. Using indicators in technical analysis allows forex traders to set more accurate entry and exit points on the charts but keep in mind you do get false signals at times.

SI is used by forex traders to determine overbought and oversold conditions in the market. In other words, where there is too much buying in the market and prices could be due for correction, or there is too much selling and a possible rebound is due.

This indicator consists of two lines that move together and interact with each other at some point. It has an upper and lower zone, where the upper zone is the overbought area and the lower zone is the oversold area. When the two lines converge in the lower area, the SI is giving you an oversold signal. When the two lines meet in the upper area, the SI is giving you an overbought signal. The RSI provides overbought and oversold signals as well as divergences.

RSI indicates bullish and bearish divergences. Bullish divergences signal potential upward price moves; bearish divergences indicated potential downward moves. In addition to indicators, trading platforms have built-in tools that provide powerful technical analysis. Technical analysis forms part of a comprehensive trading strategy and provides a framework in which forex traders analyze price movements. The data supplied is historical, with the idea being that historic price movements help traders determine current and future price movements. An economic calendar helps forex traders by scheduling dates of significant releases or events that may have a negative or positive effect on currency price movements.

The sites also relay breaking news on political developments, national disasters, employment issues and production health of strategic natural resources.

Louis Schoeman

These all have an impact on global exchange rates and positively or negatively affect the value of currency pairs. A Pip Value Calculator helps forex traders determine the value per pip in their base currency relative to their position. It allows forex traders to monitor their risk per trade more accurately. A pip is the lowest trading unit for a currency pair is typically worth a different amount, depending on the base and quote currency. The forex market is made up of thousands of currency pairs and known and calculable correlations exist between currencies, either positive or negative correlations.

Correlation is a statistical measure of the relationship between two trading assets. The Currency Correlation Tool shows the extent to which two currency pairs have moved in the same, opposite or completely random directions within a particular period. The spread analysis can be filtered by currency pair, session or time frame. It gives traders a heads-up when it comes to selecting a forex broker because the spread analysis shows which brokers offer the most competitive spreads.

The Forex Time Zone Converter allows traders to view the major market opening and closing times in their local time zone. This is a useful tool because forex is not traded on a regulated exchange like stocks and commodities. The retail forex market has its own individual hours of operation, although most participants trade between 08h00 and 16h00 in their own time zone. Market volatility is an essential element of forex trading. Calculating the volatility of a currency pair is no easy and best left to a Volatility Calculator. Typically, a calculator takes historical exchange rate information and determines the implied volatility of a currency pair in real-time.

A Trade Journal helps forex traders keep an accurate record of their trades. Data security is more important than how a platform looks and performs. The type of data encryption on the platform gives you an indication of how well your data will be protected as it is transferred across the Internet.

A reputable trading platform such as MT4 is well known for its impenetrable security. It uses firewalls both on the server and application level. It also uses two separate synced servers on which the data is stored. This allows any lost information from one of the servers to be recovered by the other server.

Retail forex trading is typically done online through a reputable forex broker using their trading platform to access the forex market.