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FOREX introduction
Read on as a quick introduction into the world of Forex.
In trading the exchanges there are grand amounts of information available, but until you can actually see what it is you are working with, it is hard to wrap your head around any of it.
What software to use, what charting to go with, how is it all going to work….
The list of questions and the endless amount of surfing that can be done may still not make you ready, or perhaps make you over ready to the point of losing the beauty of the play, the simplicity of the markets and walk you into certain death in the markets.
For those of you who have been present for some of my Forex talks in chat, the one thing that I hope I made abundantly clear, was to not open a live account until you have had a chance to sample with demo accounts. There are several brokers that will allow you to open a demo account to try their platform, and give you a chance to play with some fake funds in real-time action. Different then what you might find as paper trade methods for stocks, as order executions in the currencies are as fast in real as are in the demo accounts, and the movement is exactly the same not delayed by 15 minutes. Getting a handle on the platforms ins and outs and the trading direction can only be aided by this.
Charting packages are available from simple and basic to the professional levels. Depending on your level of charting knowledge, this may be a great place to either learn a little about the charts, or if you are a little more advanced, see the charts work in a faster pace to give you a way better comprehension of what happens in several different time frames and how the indicators change in each. Why is my MacD Histogram green on a minute and above zero but red on a 5 minute and below zero, and what does this mean to the overall day?
As a former and still stock techie, and somewhat junkie for the movement, I simply couldn’t get enough information playing the stocks, to now having an abundance of information and selecting what it is I want to study in the Forex. I paid fees ranging from $50 - $150 per month depending on the software loads and systems that I was using and still found them deficient and limited. FOREX, all a different game. Basic demo charting tools and platforms give more information, faster, better, and more reliable for free then I would have ever imagined, and certainly a lot better then what I was ever charged in the game of stocks.
Level2…Though available, I haven’t found as much of an asset for the currencies as it is for stocks. A typical day in the currency markets will see some 3 trillion dollars traded, with more trades per minute in active market times then some stocks will see in a day, simply too much information to process while trying to watch the charts and your overall trades, and not nearly as effective as up to the minute charts.
For the fundamentalists, the news still has its impact, and finding the right sites you can easily set your computer calendar to remind you of releases in the trade day. As all report dates and exact times are available, it is as simple as refreshing your browser screen. No guessing if press will come or results will come on any certain day, you only have to take the information provided and try to figure out what impact it will have on the independent trade currencies and their respective pairs.
Overall a faster paced game with a lot more action.
Having traded the currencies for a little over a year now, and having had some pretty difficult losses, I will once again remind you to trade for free until you gain some understanding and confidence, as well as take some advice on getting your feet wet in platforms and charting softwares.
I have suggested and currently use two different brokers, one for charting and one for a platform.
Platform
I used the GTS pro viewer available from FX Solutions. It is one of the easiest platforms to use and has a lot of different features that aren’t available with other brokers.
Setting stop losses and take profit points couldn’t be easier.
Hedging a trade may with some brokers is only available if you have a second account set up.
Reverse trade is as simple as 2 clicks.
Trailing stop losses have presets and easy to customize to your own specific trade styles.
One click buying and selling feature is an easy setup.
Available margin in with FX Solutions is 400-1, with a minimum account setup of $250.
Setting your lot size from mini lots is a simple task, and allowing players of all sizes.
Demo accounts are setup in a heartbeat and will allow you to setup ranged accounts to mimic your actual initial investment should you choose to go ahead in this market place.
Fast order fills and so far, I have only seen 1 situation that the platform had shut down during active trading for a few minutes…glad I was sitting on the sidelines for this one, but they had sent out an email with promise to make good on accounts impacted by this error.
Charting
Meta 4
Though FX Solutions does offer charting software with their account, it is a little different then what you would find in the world wide market, and somewhat limited in features. Basic as it is, still a functional tool, but I do, as do a lot of other technical traders, prefer Meta 4 charting software.
There are a few different companies that provide Meta 4 charting, the one I have found to be most reliable is ODL Securities. I have tried another, Alpari, and found them to have several down times and disconnect service times which can really muck with the charts as it will not back fill the information. I have only had 1 such issue with ODL, and was for such a short amount of time the charts remained unaffected.
Meta 4 charting offers:
Several indicators that you may be aware of from stock trading.
The ability to open as many tabbed pairs as you need, in as many time frames available, 1m, 5m, 15m, 30m, 1h, 4h, daily, weekly and monthly. Trading with 4 pairs, I have 10 charts open and can toggle or arrange them to my liking, never missing a beat.
There are several sites that have custom made indicators to load, learn and play with, as well as templates and active trading software to go with.
EA software will actually enter you into trades, if you open account with a meta 4 company and exit you from trades, though I am not 100% sold on anything pre-made and prefer to play and learn as I go.
You can select the indicators you like, add them for the periods you want, create your own template and apply them to all of your charts. This becomes a lot easier the more you work with this software.
Meta 4 charts are a bit of a resource hound, so you do need some dedicated space for this to run with a separate platform if you choose, running this on an older pc may result in locking up, stalling and errors. It does have to be tried in active market times, as this is when it is processing all of the information and applying it to the indicators in the select time frames, and will back fill the history of the chart as far back as you would ever need.
The trade week for Forex market begins Sunday 2:30 est., and ends Friday 4:30 est., and run 24 hours per day. This is a world wide market and there are times of greater amounts of trading which tends to smooth the market, but there is always a play available from opening bell to close.
These are some of the basics you need to get set up and started. Reading some tutorials on the charting software or with the broker of your choice might benefit you as well.
As there was some interest in chat about the Forex, I have brought this information to you as a simple introduction. More can be added as needed.
I will not claim pro status, will not tell you I am victorious in every trade, and will certainly not be your trade advisor. I can tell you what I watch for, help you with some chart setups, maybe even carry on in an evening chat, but as in the stock market, you must own your actions.
Of course, keeping in true Stock Hideout spirit, ask as many questions you need there has always been a great group support system available for beginners.
I am an active trader, aside from that have no affiliations with any company, broker or paid site, so if you trade, I gain nothing, if you don’t, my feelings will not be hurt.
As always…Play safe!
Cappy
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