Forex Strategies Archives - How to Trade Forex

What is spot forex, and how does it work?

Spot forex is a type of currency trading that involves the exchange of two currencies ‘on the spot’ – immediately. The currencies are traded in pairs, with each pair consisting of a base currency and a quote currency. For example, the EUR/USD pair consists of the Euro as the base currency and the US Dollar as the quote currency. The spot forex market is decentralized, so there is no central exchange where trades take place. Instead, trades are executed over-the-counter (OTC) between two parties. OTC trading is done via electronic networks, phones, or other means of communication. Trading in the spot forex market takes place 24 hours a day, five days a week, since there are currency markets in all time zones around the world. As a result, when one market closes, another one opens, making spot forex a continuous and very liquid market. What is trading on the margin?

What is MACD in forex trading?

6 April 2022 Forex Trader Forex, Forex For Beginners, Forex Strategies

MACD stands for Moving Average Convergence Divergence. It is a technical indicator exploited by traders to measure the momentum of a security’s price movement. A brief overview One of the most well-liked technical indicators in trading, invented by Gerald Appel in 1979, is the moving average convergence divergence (MACD), also known as the signal line. Traders worldwide appreciate the MACD’s simplicity and adaptability, owing to its capacity to be used as either a trend or momentum indicator. The MACD’s goal is straightforward: it compares an instrument’s 26-day and 12-day exponential moving averages (EMA). The 12-day EMA is the quicker of the two moving averages that make up the MACD, while the 26-day EMA is slower. Both moving averages rely on the period’s closing prices measured in their calculations. A nine-day EMA of the MACD itself is drawn on a MACD chart, and it serves as a trigger for buy and

Understanding technical oscillators

11 February 2022 Forex Trader Advanced Forex, Forex, Forex Strategies

Technical analysis is used as a way of predicting future stock price movements by studying past trends. It’s based on the assumption that “history repeats itself”, so prices can be tracked and forecasted using mathematical models and charting techniques. Technical oscillators use the internal dynamics of market activity (prices, trading volume) to measure buying or selling pressure, or overall investor sentiment within a stock, thus identifying key turning points. RSI (Relative Strength Index) and Stochastics are the two most well-known examples. Let’s look at them in more detail: Relative strength index (RSI) As the name suggests, measures relative strength. When it’s near 30%-40%, that means overbought; when it’s near 0%-20%, that means oversold. The grey line represents the oscillator itself, an average percentage change in price from one period to another, so it varies with time. RSI is used mainly on intraday charts but can also be applied to weekly

What is Forex algorithmic trading?

23 January 2022 Forex Trader Advanced Forex, Forex Strategies

Forex algorithmic trading, also known as Algo trading or black-box trading, uses algorithms to trade financial instruments automatically. These algorithms are written by traders and programmers and used to identify opportunities in the market and execute trades based on these opportunities. Forex algorithmic trading can be used in several ways, but it is typically used to take advantage of price movements and enter and exit trades quickly. It can also be used to place orders that are not possible manually, such as large or complex orders. Forex algorithmic trading is growing in popularity due to the speed and accuracy that it can provide. Automated systems can offer more opportunities to trade with fewer mistakes. However, this does not mean that robots are replacing human traders – it simply means that they can work together. In general, Forex algorithmic trading is used for three main reasons: to speed up the trading

Risk management techniques in CFD trading

8 January 2022 Forex Trader Advanced Forex, Forex Strategies

Risk management is a critical component of CFD trading. Without proper risk management, traders can quickly lose money on their trades. This article will discuss some of the most crucial risk management techniques for CFD traders. Stop-loss orders One of the most critical risk management techniques is always to stop losses. A stop loss is an order that automatically sells security when it reaches a specific price. It helps limit losses if the security moves against the trader’s position. Limit orders Another critical risk management technique is to use limited orders. Limit orders allow traders to set a maximum price that they are willing to pay or sell a security. It helps protect traders from paying too much for securities or selling them at a loss. Mental stops A technique that CFD traders often overlook is to use mental stops. A mental stop loss occurs when a trader decides