Sociable

Rules & regulations for trading in the Forex


Regulation

Most reputable online forex brokers take the step of submitting to regulation by one of the main financial regulatory agencies operating in their home country. Sometimes, they will even be regulated by more than one agency. Such regulation provides you with the security of knowing the broker's operations are being overseen by an independent authority with the goal of keeping the business honest.
Data Security
When you either enter or store vital personal information online, it can be subject to falling into unfriendly hands that may use it for their own personal gain. Accordingly, a top priority when choosing a broker is that they encrypt all data entered into online forms using industry standard SSL-encryption or better.
Another key issue involves the safe storage of data so that it will not be lost in case of disaster. Many online forex brokers use duplicate data farms with high security to assure the safety of your account information.

Dealing Spreads

Many day trading strategies become unsuccessful over the long term if your account does not have access to competitive dealing spreads. The spread is simply the difference between the bid price and the offer price for a particular currency pair and should be no greater than five pips in the majors and major crosses, with wider spreads often seen in the minor crosses and exotic currencies.

Commissions and Fees

Sometimes brokers are not content just to have you dealing on their spreads. In this case, they might charge a commission or fee for each transaction. Sometimes these are calculated on a per transaction basis or on a volume dealt basis. Additional fees might be involves in making withdrawals or deposits, so be sure to check that information to minimize your transaction costs.

Order Types

Most forex brokers handle the basic market, stop and limit order types. Nevertheless, some brokers also offer support for OCO (one-cancels-the-other) and trailing stops. If either of these more specialized order types would be suitable for your trading plan, then be sure that your chosen broker supports them and make sure that you fully understand the limitiation of these different order types.






Brokers views


Forex Broker Reviews

Not even legends in the calibre of a Larry Williams or a Martin Schwartz will have much luck in currency trading if the broker is unwilling to cooperate - it has an overwhelming role in determining what type of experience you will have as a trader. The lack of clear rules and precedents creates great opportunities, but also huge risks for the unprepared. 
But aren`t there always two sides to a story? To help our visitors avoid the dark side of forex, we have carefully screened the best offers in the online brokerage business, and prepared a selection of some of most reputable and efficient brokers for your exclusive benefit. If you have any plans to explore the exciting and exciting world of currency trading, we are sure that you will find our list an invaluable guide in the crowded and sometimes shady world of the forex brokers.

Finding the Best Forex Broker - FAQ

Finding the best forex broker for your needs takes some research. Hundreds of online brokerage firms now compete for your account, so plenty exist to choose from. Nevertheless, that also complicates the decision because of the large number of options.
Also, finding the best forex broker that has a fast execution capability, a reliable trading platform and which can be trusted with your account deposit might be the first things you will want to assure yourself of. Other sweeteners can include account opening bonuses and other features like mobile trading and SMS market alerts.
Basically, you want a forex broker you can trust to handle your money and your trades so that you can get on with the business of trading forex without worries. Anyway, to make the process of finding a broker simpler, the list below covers most of the key comparison points between forex brokers so that you can be better prepared for a successful search.

Forex Trading Tips - 20 things you need to know to be a successful trader


Forex has caused large losses to many inexperienced and undisciplined traders over the years. You need not be one of the losers. Here are twenty forex trading tips that you can use to avoid disasters and maximize your potential in the currency exchange market.

1. Know yourself. Define your risk tolerance carefully. Understand your needs.

To profit in trading, you must make recognize the markets. To recognize the markets, you must first know and recognize yourself. The first step of gaining self-awareness is ensuring that your risk tolerance and capital allocation to forex and trading are not excessive or lacking. This means that you must carefully study and analyze your own financial goals in engaging forex trading.

2. Plan your goals. Stick to your plan.

Once you know what you want from trading, you must systematically define a timeframe and a working plan for your trading career. What constitutes failure, what would be defined as success? What is the timeframe for the trial and error process that will inevitably be an important part of your learning? How much time can you devote to trading? Do you aim at financial independence, or merely aim to generate extra income? These and similar questions must be answered before you can gain the clear vision necessary for a persistent and patient approach to trading. Also, having clear goals will make it easier to abandon the endeavor entirely in case that the risks/return analysis precludes a profitable outcome.

3. Choose your broker carefully.

While this point is often neglected by beginners, it is impossible to overemphasize the importance of the choice of broker. That a fake or unreliable broker invalidates all the gains acquired through hard work and study is obvious. But it is equally important that your expertise level, and trading goals match the details of the offer made by the broker. What kind of client profile does the forex broker aim at reaching? Does the trading software suit your expectations? How efficient is customer service? All these must be carefully scrutinized before even beginning to consider the intricacies of trading itself.Please refer to our forex broker reviews to find a reliable broker that suites your trading style.

4. Pick your account type, and leverage ratio in accordance with your needs and expectations.

In continuation of the above item, it is necessary that we choose the account package that is most suited to our expectations and knowledge level. The various types of accounts offered by brokers can be confusing at first, but the general rule is that lower leverage is better. If you have a good understanding of leverage and trading in general, you can be satisfied with a standard account. If you’re a complete beginner, it is a must that you undergo a period of study and practice by the use of a mini account. In general, the lower your risk, the higher your chances, so make your choices in the most conservative way possible, especially at the beginning of your career.

5. Begin with small sums, increase the size of your account through organic gains, not by greater deposits.

One of the best tips for trading forex is to begin with small sums, and low leverage, while adding up to your account as it generates profits. There is no justification to the idea that a larger account will allow greater profits. If you can increase the size of your account through your trading choices, perfect. If not, there’s no point in keeping pumping money to an account that is burning cash like an furnace burns paper.

6. Focus on a single currency pair, expand as you better your skills.

The world of currency trading is deep and complicated, due to the chaotic nature of the markets, and the diverse characters and purposes of market participants. It is hard to master all the different kinds of financial activity that goes on in this world, so it is a great idea to restrict our trading activity to a currency pair which we understand, and with which we are familiar. Beginning with the trading of the currency of your nation can be a great idea. If that’s not your choice, sticking to the most liquid, and widely traded pairs can also be an excellent practice for both the beginner and the advanced traders.

7. Do what you understand.

Simple as it is, failure to abide by this principle has been the doom of countless traders. In general, if you’re unsure that you know what you’re doing, and that you can defend your opinion with strength and vigor against critics that you value and trust, do not trade. Do not trade on the basis of hearsay or rumors. And do not act unless you’re confident that you understand both the positive consequences, and the adverse results that may result from opening a position.

8. Do not add to a losing position.

While this is just common sense, ignorance of the principle, or carelessness in its employment has caused disasters to many traders in the course of history. Nobody knows where a currency pair will be heading during the next few hours, days, or even weeks. There are lots of educated guesses, but no knowledge of where the price will be a short while later. Thus, the only certain value about trading is now. Nothing much can be said about the future. Consequently, there can be no point in adding to a losing position, unless you love gambling. A position in the red can be allowed to survive on its own in accordance with the initial plan, but adding to it can never be an advisable practice.

9. Restrain your emotions.

Greed, excitement, euphoria, panic or fear should have no place in traders’ calculations. Yet traders are human beings, so it is obvious that we have to find a way of living with these emotions, while at the same time controlling them and minimizing their effect on our lives. That is why traders are always advised to begin with small amounts. By reducing our risk, we can be calm enough to realize our long term goals, reducing the impact of emotions on our trading choices. A logical approach, and less emotional intensity are the best forex trading tips necessary to a successful career.

10. Take notes. Study your success and failure.

An analytical approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he carefully scrutinizes his mistakes and successes to find out what works and what does not. This is one of the most importance forex trading tips that you will get from a good mentor.

11. Automate your trading as much as possible.

We already noted the importance of emotional control in ensuring a successful and profitable career. In order to minimize the role of emotions, one of the best of courses of action would be the automatization of trading choices and trader behavior. This is not about using forex robots, or buying expensive technical strategies. All that you need to do is to make sure that your responses to similar situations and trading scenarios are themselves similar in nature. In other words, don’t improvise. Let your reactions to market events follow a studied and tested pattern.

12. Do not rely on forex robots, wonder methods, and other snake oil products.

Surprisingly, these unproven and untested products are extremely popular these days, generating great profits for their sellers, but little in the way of gains for their excited and hopeful buyers. The logical defense against such magical items is in fact easy. If the genius creators of these tools are so smart, let them become millionaires with the benefit of their inventions. If they have no interest in doing as much, you should have no interest in their creations either.

13. Keep it simple. Both your trade plans and analysis should be easily understood and explained.

Forex trading is not rocket science. There is no expectation that you be a mathematical genius, or an economics professor to acquire wealth in currency trading. Instead, clarity of vision, and well-defined, carefully observed goals and practices offer the surest path to a respectable career in forex. To achieve this, you must resist the temptation to overexplain, overanalyze, and most importantly, to rationalize your failures. A failure is a failure regardless of the conditions that led to it.

14. Don’t go against the markets, unless you have enough patience and financial resilience to stick to a long term plan.

In general, a beginner is never advised to trade against trends, or to pick tops and bottoms by betting against the main forces of market momentum. Join the trends so that your mind can relax. Fight the trends, and constant stress and fear will wreck your career.

15. Understand that forex is about probabilities.

Forex is all about risk analysis and probability. There is no single method or style that will generate profits all the time. The key to success is positioning ourselves in such a way that the losses are harmless, while the profits are multiplied. Such a positioning is only possible by managing our risk allocations in accordance with an understanding of probability and risk management.

16. Be humble and patient. Do not fight the markets.

Recognize your failures, and try to accommodate them if they can’t be eliminated completely. Above all, resist the illusion that you somehow possess the alchemist’s stone of trading. Such an attitude will surely be ruinous on your career eventually.

17. Share your experiences. Follow your own judgment.

While it is a great idea to discuss your opinion on the markets with others, you should be the one making the decisions. Consider the opinions of others, but make your own choices. It is your money after all.

18. Study money management.

Once we make profits, it is time to protect them. Money management is about the minimization of losses, and maximization of profits. To ensure that you don’t gamble away your hard-earned profits, to “cut your losses short, and let profits ride”, you should keep the bible of money management as the centerpiece of your trading library at all times.

19. Study the markets, fundamentals, and technical factors leading the price action.

That we have placed this so low in the list should not surprise the experienced trader. Faulty analysis is rarely the cause of a wiped-out account. A career that fails to begin is never killed by the consequences of erronerous application or understanding of fundamental or technical studies. Other issues that are related to money management, and emotional control are far more important than analysis for the beginner, but as those issues are overcome, and steady gains are realized, the edge gained by successful analysis of the markets will be invaluable. Analysis is important, but only after a proper attitude to trading and risk taking is attained.

20. Don’t give up.

Finally, provided that you risk only what you can afford to lose, persistence, and a determination to succeed are great advantages. It is highly unlikely that you will become a trading genius overnight, so it is only sensible to await the ripening of your skills, and the development of your talents before giving up. As long as the learning process is painless, as long as the amounts that you risk do not derail your plans about the future and your life in general, the pains of the learning process will be harmless.

Tips for Forex Trading,


USD May Turn Bullish Today.

Following yesterday's losses, the US dollar has the potential to stage a bullish correction today providing that this week's Unemployment Claims figure comes in as predicted. Analysts are currently forecasting a number of around 411K, which if true, would signal a further decline in unemployment in the US.

USD

Comments yesterday from Fed Chairman Bernanke sent the dollar plummeting against most of its main currency rivals, including the euro and yen. Bernanke voiced concerns regarding the high level of unemployment in the US, which investors interpreted as a sign that the Fed will continue with its stimulus package. The EUR/USD spiked well over 100 pips yesterday, peaking at just above the 1.3740 level. Meanwhile, the USD/JPY fell close to 40 pips, dropping as low as 82.18 during the evening session.
The dollar was able to stage a minor recovery in the overnight session, largely because riskier currencies like the euro lack strong fundamental news to boost them to new highs against the greenback. The EUR/USD fell over 20 pips, and is currently on its way to dropping below the psychologically significant 1.3700 level. The USD/JPY shot up some 25 pips last night, and is currently trading at 82.55.
Today, dollar traders will want to keep a close watch on the latest US Unemployment Claims figure, set to be released at 13:30 GMT. Given Bernanke's comments yesterday, today's figure is likely to carry more weight than usual in the marketplace.
Analysts are currently forecasting the number to come in around 411K, which if true, would represent a drop over last week. Barring any surprises, the positive employment data will likely lead to some gains for the dollar in the afternoon session.

EUR

The euro saw a bullish day yesterday following pessimistic comments from the US Fed Chairman regarding the current state of the US economic recovery. Against the dollar, the euro surged over 100 pips and was able to breach the psychologically significant 1.3700 barrier. The EUR/GBP moved up some 50 pips before staging a slight downward correction during the overnight session. In addition, the EUR/JPY has gone up close to 100 pips in the last 24 hours, and is not showing signs of a possible reversal.
Today, euro traders will want to pay attention to the fundamental news out of the UK and US. At 12:00 GMT, the UK will release its Official Bank Rate. Analysts are debating whether the MPC will raise national interest rates above their current level of 0.50%. If so, riskier currencies like the British pound and euro are likely to see strong upward movement. That being said, new unemployment claims in the US are expected to drop when the latest figure is released at 13:30 GMT. This could give the US dollar a boost against the euro in the afternoon session.

JPY

The JPY took losses against virtually all of its main currency rivals yesterday, as speculation that the demand for Japanese exports may be weakening weighed down on the currency. The GBP/JPY moved up close to 70 pips yesterday, and peaked at just below the 133.00 level. Currently the pair is trading 132.80. The EUR/JPY continues to move up after gaining more than 100 pips in trading yesterday. The pair currently stands at 113.15.
Today, yen traders will want to pay attention to the major news out of the UK and US. Should the UK Monetary Policy Committee decide to leave national interest rates at their current levels, investors may revert back to safe haven currencies like the yen in mid-day trading. Furthermore, if the US reports a drop in the number of people seeking first timeunemployment insurance, the yen is likely to see additional gains against the European currencies.

Technical Analysis

EUR/USD

Technical data is providing mixed signals for this pair. The 8-hour chart's Williams Percent Range is currently in the overbought region. At the same time, all indicators on the daily chart are in neutral territory and are not showing a specific direction for the pair. Traders may want to take wait and see approach today, as a clearer picture is likely to present itself later on.

GBP/USD

The Relative Strength Index on the daily chart is currently approaching overbought territory in a sign that a downward correction is likely to occur. Furthermore, the MACD on the same chart has formed a bearish cross. Going short with tight stops may be the preferred strategy today.

USD/JPY

The Stochastic Slow on the 8-hour chart has formed a bearish cross, meaning that downward movement is likely to occur today. Furthermore, the 4-hour chart's Williams Percent Range is currently in overbought territory. Traders are advised to go short in their positions today.

USD/CHF

The Williams Percent Range on the daily chart is in overbought territory and angling downward, in a clear sign that downward movement is likely to occur. The Relative Strength Index on the same chart is approaching the overbought zone. Going short is likely to be the wise choice today.

Wild Card

GBP/JPY

The Relative Strength Index on the daily chart is approaching overbought territory in a clear sign that downward pressure exists for this pair. Furthermore, the both the MACD and Williams Percent Range on the 8-hour chart indicate that bearish movement is likely to occur today. Now may be a great time for forex traders to open up sell position for this pair before the downward breach occurs.

Market Trend

 EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddownnonoupupdown
Weekly Trenddownupnoupnodown
Resistance1.38001.621083.550.97051.01800.8610
1.37651.617583.200.96701.01450.8575
1.37301.614082.850.96351.01100.8540
Support1.36551.606582.200.95601.00400.8470
1.36151.603081.900.96251.00050.8435
1.35801.600081.550.95900.99700.8400


Indicators

DateTime GMT$€£¥EventPeriodPrev.ForecastImp
2011-02-1000:00GBP
MPC Rate Statementhelp
**4
2011-02-1000:00GBP
NIESR GDP Estimatehelp
0.5%-3
2011-02-1000:30AUD
Employment Changehelp
2.3K20.3K5
2011-02-1000:30AUD
Unemployment Ratehelp
5.0%5.0%5
2011-02-1006:45CHF
SECO Consumer Climatehelp
7113
2011-02-1007:45EUR
French Industrial Productionhelp
m/m2.3%-0.3%3
2011-02-1008:15CHF
CPIhelp
m/m0.0%-0.1%3
2011-02-1009:00EUR
ECB Monthly Bulletinhelp
**3
2011-02-1009:00EUR
Italian Industrial Productionhelp
m/m1.1%0.4%1
2011-02-1009:30GBP
Manufacturing Productionhelp
m/m0.6%0.5%5
2011-02-1009:30GBP
Industrial Productionhelp
m/m0.4%0.5%1
2011-02-1012:00EUR
Buba President Weber Speakshelp
**3
2011-02-1012:00GBP
Asset Purchase Facilityhelp
200B200B5
2011-02-1012:00GBP
Official Bank Ratehelp
0.50%0.50%5
2011-02-1013:30CAD
NHPIhelp
m/m0.3%0.6%3
2011-02-1013:30USD
Unemployment Claimshelp
415K411K5
2011-02-1015:00USD
Wholesale Inventorieshelp
m/m-0.2%0.7%1
2011-02-1015:30USD
Natural Gas Storagehelp
-189B-191B1
2011-02-1018:30CAD
Gov Council Member Murray Speakshelp
**3
2011-02-1019:00USD
Federal Budget Balancehelp
-80.0B-69.5B3
2011-02-1021:45NZD
FPIhelp
m/m-0.8%-1
2011-02-1022:30AUD
RBA Gov Stevens Speakshelp
**5