Forex Tutorials
Forex trade is also known as foreign exchange trade, currency trading, or FX trading. With over $5 trillion traded on the market each day, the forex market has become the most liquid and dynamic market in the world.
What is forex?
Forex trading involves the conversion of one currency into another. A lot of foreign exchange is done for practical purposes, but the vast majority is undertaken to try and turn a profit. Not only is forex the largest market in the world, but it’s also one of the most volatile. Foreign exchange rates are determined by a de-centralized or over-the-counter market where currencies are traded. It’s open to both major institutions and individual investors alike.
What is forex trade and how does it work?
Forex market is a global currency trading market. It’s also sometimes called FX or FOREX. Here, one currency is exchanged for another in what’s known as a ‘currency pair’. There’s an exchange rate between each currency pair that fluctuates regularly. Forex traders look to profit on fluctuating exchange rates, speculating on whether the price of one currency will go up or down against another.
Why should you consider forex trading?
There are several reasons as to why forex trade appeals to new and experienced traders, including the following:
Accessibility – you can trade large amounts of forex with just a small amount of capital
Reliability – there are few to no opportunities for anyone to manipulate forex prices to their advantage
Ease of trade – liquidity is very high in the forex trade market, making it very intuitive and easy to pick up
Benefit from short and long-term trade – you can trade currencies without acquiring them
Harnessing the power of technology – trade via a seemingly live environment with instant results
Availability – the ability to trade 24 hours a day, five days a week thanks to forex happening in a worldwide market
Forex trade is highly intuitive and user-friendly, not to mention very lucrative for traders. Finally, the costs of forex for individuals are usually very low, meaning that they’re built into the trades themselves in most scenarios.
Currency trading basics
Although stocks and shares are traded singularly, all currency trading must be done in pairs. When trading forex, you simultaneously buy one currency and sell another.
For example, the GBP/USD currency pair is sterling vs the dollar. The first currency in the pair (in this case GBP) is known as the base. This is the currency you think will go up or down in value against the second currency (in this case USD), which is known as the quote.
Forex trade is often priced to the fifth decimal point of the foreign currency. The smallest increment of any trade is known as a ‘pip’, which stands for percentage in point.
Can you make money buying and selling currency?
A Forex investor can be an individual, a country, or even a corporation. Anyone can trade forex online as long as they are astute enough and have enough financial capital. The size of the market’s liquidity means that prices change rapidly, reacting to news and short-term events. This fluctuation creates opportunities for traders.
You can either take a long (buy) or short (sell) position depending on whether you think the currency’s value will go up or down. You would buy a currency pair if you thought that the base currency would strengthen against the quote currency, or if you thought the quote currency would weaken against the base currency. In contrast, you would sell a currency pair if you believed that the base currency would weaken against the quote currency. Or if you thought that the quote currency would strengthen against the base currency. If you speculate incorrectly and the market moves against your position, you will experience a loss.
Forex trading with TradeNoesis
Open an account with a Broker or a Bank and use the API TradeNoesis trading platform and you will not only have access to the forex trade market but be able to benefit from our powerful trading platform – which includes charting and algorithmic abilities that can make a difference when it comes to implementing your trading strategies.
To apply for your account with TradeNoesis, you need to make an account application and buy a user’s license. As a forex trader, you can fund your account with one of our API connection Banks or Brokers, in a variety of ways and operate in a corporate, joint, or individual capacity. We provide the flexibility, technology, and customer service to ensure that you receive a smooth forex trade experience.
CFD Trading
CFD stands for Contract for Difference. A Contract for Difference allows you to speculate on price movements in several financial markets, regardless of whether they’re rising or falling. A CFD acts as a contract to exchange the difference in the value of a financial instrument between the time that the contract was opened and the time it was closed. With CFD trading, you never own the underlying instrument, you are only speculating on its price movement.
What is a CFD?
CFDs are a form of derivative trading. A CFD is a tradable instrument that mirrors the movements of the asset underlying it. When you take a position, the value of the asset will move concerning that position. The contract allows profits or losses to be made from these movements.
With a CFD, you never own the asset in question. Instead, it is a contract between the client (you) and the broker. With CFD trading, you can trade on the margin, and you can go long (buy) if you think prices will rise, or short (sell) if you think they’ll fall.
What is a CFD trade?
A CFD trade allows you to speculate on whether the price of an asset will rise or fall. You can speculate on several markets and instruments, including shares, commodities, indices, currencies, and treasuries. When you open a CFD position, you select the number of CFDs you’d like to trade.
For every point the price moves in your favour, you will gain multiples of the number of CFD units you have bought or sold. For every point the price moves against you, you will make a loss. When trading CFDs, it’s important to know that your losses can exceed your original deposit.
If you think the price of the market will rise, you ‘buy’. If you think the price of the market will fall, you ‘sell’. Then, if you’re correct, your profits will rise in line with any price increase/ decrease. However, if you’re incorrect, you will make the equivalent loss.
What are CFDs stop-loss orders?
One of the best ways to limit the risks associated with CFD trading is to set stop-loss orders. These essentially represent orders which guarantee a CFD position will be closed below the market price at the time, and help to prevent investors from losing too much money on a single trade.
They can be an incredibly useful tool and often make trading CFDs a far less daunting task, given the extra security they provide for each trade.
What is CFD hedging?
Some investors use CFDs to hedge their investment portfolio against overall risk. If they have a long-term investment, for example, which they believe will be profitable in the long term but may sink short term, a CFD against that asset may help to offset the initial losses. This is an effective strategy when considering how to make an investment portfolio more diverse, as it can effectively balance investments out.
How to get started with CFD trading
To begin trading CFDs, all you need to do is create an online account and you can start trading straight away. It is worth remembering that losses can exceed deposits, especially with leveraged investments, so it is best to be well clued up about how to manage investment risk accordingly.
It is possible to make consistent profits from CFD investments, but only if you have researched the assets/instruments you are investing in and based your investment decisions on logic rather than emotion. Constructing a well-developed, comprehensive trading strategy is the best way of approaching CFD trading, and will help you on your way to success.
Do you have to pay tax on a CFD trade?
As you don’t own the underlying asset when trading CFDs, there’s no stamp duty to pay in the UK. However, you will be subject to capital gains tax. CFDs are generally considered to be tax-efficient due to this.
What is Day Trading?
Since the advent of the internet, online trading has become a massive activity globally, and with good reason. Online brokers now allow traders to access a myriad of global markets from their computer and/or mobile device, meaning that trading is now more accessible than ever.
This has led to a significant boom in trading as both a hobby and the main source of income (for professionals). Now, day trading is a common activity amongst savvy investors who know how to read and take advantage of the global markets. This guide will explore day trading and what it involves.
Day trading
Traders who buy and sell securities on the same day are known as day traders, as they are trying to make a short-term profit within daily market trading hours. It is possible to conduct day trade on almost any market, but two of the most traded markets are forex trade and the stock market. A professional day trader will typically treat trading as their sole occupation/business, but it can also be a part-time occupation or even a hobby. It is also worth noting that day traders can either work for themselves or larger institutions.
Can anyone day trade?
As long as they have access to the internet, any individual can day trade, as trading is usually conducted through an online broker. Now it is also possible to access the markets through mobile devices, which allows for much greater flexibility in any day trading schedule. It is worth remembering that trading always carries at least some element of risk and this risk increases when leverage is applied to investments. As such, day trading should be approached sensibly, with a willingness to analyse how each market behaves differently.
Can you make money from day trading stocks?
Professional day traders would be out of a job if they didn’t make money from trading regularly, but making a profit is by no means guaranteed. To be successful in this field requires discipline, the ability to research, and expert knowledge of global markets, and the factors which influence their behaviour.
Since day traders must take advantage of market opportunities as and when they open up, a keen eye for detail is needed, as is the ability to understand the optimal times to buy and sell any given asset. The essentials for day trading success include:
Strategy: No trader can expect to make money without a solid, comprehensive, and considered strategy that is based around their financial goals and the markets they trade. A strategy also ensures that trades are conducted using logic rather than emotion, which is essential for minimising overall risk.
Research: Research is a necessary part of all trading strategies, as, without it, traders would essentially be gambling on market movements. In the forex trade market, for example, looking at upcoming political elections can help traders make predictions on how a certain currency may rise or fall in value, thus informing their trades.
Trading Tools: Using the tools available is an essential part of day trading, as they help traders analyse the markets, execute a strategy, and paint a clearer picture of market behaviour (and influence trades accordingly).
Successful day trading
Different day traders take on different levels of risk with their investments, with some preferring high risk, volatile markets, and others preferring lower risk, steadier markets. The chances of becoming a successful day trader depend on how effective any given strategy is, and how well risk is managed. It undoubtedly takes time to master the markets, and there will always be losses on the path to success.
ECN Broker
At TradeNoesis, our trading platform uses Electronic Communications Networks (ECN) to deliver competitive market prices. This is an automated system that matches buy and sell orders currently in the foreign exchange market and provides information about orders being placed.
As one of the ECN providers of a forex trade platform, this means that you get direct access to other participants in the currency market, allowing for quick and easy trade without a dealing desk. Our ECN-connected platform uses a pure agency model and pricing to offer an online trading solution that is transparent and free of manipulation.
ECN pricing
Price quotations from many market participants are consolidated to determine the ECN pricing offered. All market prices are derived from an aggregation engine that is integrated with top-tier banks and non-bank institutions. This means that tighter bid/ask spreads can be offered as opposed to with a non-ECN provider.
The spreads are variable and not fixed when you trade on our ECN platform due to this pricing structure. However, due to the competitive, narrow spreads, there is a charge of a fixed commission per transaction. These are set at 0.60 USD round turn for a mini contract (10,000 lot size) and 6.00 USD round turn for a standard contract (100,000 lot size), this charge could be variable depending on the ECN provider.
When trading currency pairs that are non-USD, the commission will change depending on the current market conversion rate.
ECN vs Dealing desk brokers
Many traders can become confused between ECN and dealing desk brokers but they both offer different services. Dealing desk is a form of market-making broker which displays its quotes that correlate to inter-banking ones. Everything from placing orders to closing them is done automatically and electronically.
The dealing desk essentially follows a traditional forex trade method whereby trades are placed and the broker is the liquidity provider or counterparty to your trade. With a Dealing desk broker, this process has simply been automated, with any desk dealers replaced by such systems.
At TradeNoesis we are not dealing with a market maker. There is no dealing desk and we only provide STP order execution.
Benefits of ECN
An ECN account offers an alternative trading method for forex traders. Some of the main benefits of using an ECN broker include:
Lower trading costs: Narrow spreads and low commissions mean using an ECN broker can be more cost-effective than traditional brokers.
Anonymity: ECN trading is anonymous, which can be preferred for high-volume traders. Traders can take advantage of neutral pricing and avoid any bias against their direction based on their forex trading strategies or current market position.
Instant trade execution: Live forex prices can be traded on with instant executions with no interference from market makers.
Price feed transparency: Every ECN broker has access to the same feed and trade, meaning that price transparency is provided along with current and past information, with equal access ensuring all traders have equal access and no advantage.
Open an ECN account
Start a demo trial or open an ECN account here to start trading with one of the best true ECN forex brokers. A minimum deposit of 3,000 Euros is required (or the equivalent funded in USD or GBP) along with a few further details.
Our Partners / Affiliates Brokers are regulated by the Cayman Islands Monetary Authority (CIMA) while NatWest Bank Plc is their solid financial partner for their firm’s account custodian services. Open a demo or real ECN account and begin trading forex with a top-level ECN broker.
Forex Charts
Those who are accustomed to forex trade regularly will know just how volatile a market it can be. The market behaviour currency pairings can be difficult to predict, not least because so many factors influence the value of the currency. Forex charts (or FX charts) are tools of the trade which display a variety of information such as:
- The current exchange rate between different currencies
- The past market behaviour of any given pairing
- Close, open, low, and high price for a certain period (candlestick charts only)
As such, forex charts are incredibly useful to those who wish to invest in the forex market and can provide significant information regarding all the available currency pairings.
What are the different types of forex charts?
The three main types of forex charts are line, bar, and candlestick. The most common and popular forex chart type is a candlestick, as it displays far more information compared to the other two types of chart. With candlestick charts, you can view ‘how’ the currency pairing moved as opposed to just how much it moved by.
Forex live charts show currency values in the present and often update every few seconds. These are used by forex traders to monitor the market and help inform their decisions in real-time.
Part of an effective trading strategy
Forex charts should be used as part of an effective trading strategy, as they provide essential market information which forex traders can use daily. Since forex is such a volatile market, it is necessary to know exactly how much currency pairings are changing in value, as well as what is causing the value to go up or down.
Whilst forex charts do not help explain the external factors which influence currency behaviour/value, they still provide useful insight into the precise effects these factors have on the value of any given pairing.
If, for instance, the pound was to sink against the euro as a result of a change in UK economic policy, a comprehensive forex chart will accurately show the extent to which the value went down, and how quickly. This can then be used to predict how the currency will behave in similar situations in the future.
Indicators
Many FX charts also include indicators, which are used by traders to interpret the data presented on the chart. There are many different types of indicators that traders use, but two of the main ones include Bollinger Bands and the Relative Strength Index.
These allow traders to draw more data from a forex chart, expanding on the basic information that they display. Bollinger Bands, for instance, can be used to help determine whether a currency is overpriced or underpriced. With this in mind, it is well worth learning how each different indicator works and how the information can be applied to trading forex.
Ultimately, forex live charts and regular forex charts are incredibly useful tools that have become a necessity to forex traders. As a result, it is now possible to gain in-depth knowledge of the forex trade market within seconds.
Metal Trading
Metal trading offers a popular way for investors to diversify their portfolios and hedge against market risks. At our Partner’s / Affiliates Brokers you can access the precious metals market to grow or diversify your portfolio with gold and silver investments.
What is metal trading?
Precious and base metals are all over-the-counter (OTC) products, meaning that buying and selling these commodities does not involve physical movement. The metal trade works similar to other common investments, to purchase metal at low value and sell for a profit when this has risen.
There are a wide variety of metals available to trade, from the three precious metals of gold, silver, and platinum, to base metals that include aluminium, copper, nickel, lead, and zinc.
Gold is the most actively traded metal due to its wide range of uses. From use in jewellery and electronics to the large reserves which central banks hold, there is a constantly large supply and demand, influenced by market uncertainty, inflation, and risk.
Ways to trade metals
There is a range of different ways to invest in precious and base metals:
Bullion: Those who want the physical gold coins and bars and have space to store them can invest in bullion.
Contract for Difference CFDs: A Contract for Difference allows you to speculate on price movements in several financial markets, regardless of whether they’re rising or falling.
Futures: High liquidity and leverage are available with online metal trading futures, providing large potential profits but also losses.
Certificates: Similar to investing in bullion, without the hassle of having to transport and store the metals yourself.
Further contract specifications need to be considered when deciding whether to enter the metal trade. These include the base currency used, contract size, point value, and the market opening hours. Otherwise, you can begin online metal trading easily.
Why trade metals?
The global metals market may not be as large or liquid as forex or the wider commodities, but there are still many advantages of metal trade that make it an appealing option for many traders and investors.
Hedge against risk: Precious metals are considered safe-haven investments and can be used to hedge against inflation and economic uncertainty. Even though they are still affected by price fluctuations, they can protect against economic changes.
Diversify: Diversification is another method for reducing risk and metals play an important part as they can mitigate against more volatile forex markets, for example.
International liquidity: Metals are not bound by certain countries the way currencies can be, presenting high levels of international liquidity. This makes it easy to buy and sell metals around the world.
Easy, low-cost trading: Online metal trading makes the process simple, with charting and analysis tools alongside low transaction costs for making a metal trade.
Start metal trading with our brokers
Our software provides all the tools you need to begin online metal trading. The user-friendly interface makes it easy for new traders to get started, while the market depth and custom strategy orders will help experienced metal traders place orders. News events, an economic calendar, and the ability to add an Algorithm are included to improve your metal trading experience too.
TradeNoesis Platform
Start trading with the TradeNoesis platform here as our Partners / Affiliates Brokers. The most intelligent forex trading platform since it was launched in 2010; it can be used with a Partner / Affiliate Brokers account to begin buying and selling currencies, metals, and CFDs.
Alongside all the excellent features and benefits of the TradeNoesis platform, it can also be enhanced with our algorithmic software to truly improve your forex trade experience. The TradeNoesis platform can be reached through the internet by becoming a subscriber and then you can use a live or demo account, so you can start trading almost instantly.
TradeNoesis Platform Features
TradeNoesis platform remains the most popular trading platform for the ones who have used it. This is thanks to its powerful performance, reliability, and ease of use. It includes several features that make it versatile and appealing to both beginner and experienced traders, such as:
Communication tools: Advanced communication tools are included, which allows traders to communicate through the platform in real-time, and share successfully their algorithms and strategies.
Trade Screen: Clear and easy-to-use interface that displays the available contracts, active and completed sell and purchase orders, current market spreads, and more information.
Data reporting: Trading data is collected and can be viewed in a range of different report types. These include profit and loss, winners and losers, performance and time analysis
Positions and pending orders: Open positions and pending orders can all be closed just with one click.
TradeNoesis Demo
For those new to trading or who want to practise using TRADENOESIS PLATFORM before partaking in forex trade on the live markets, there are options available to subscribers upon request. Testing of our algorithm can also be done using a demo account on the TRADENOESIS PLATFORM.
Demo accounts for TRADENOESIS PLATFORM have a time limit, but clients with a live account can extend this. Prices for the demo account are fed directly from the live market pricing, though they are executed within the demo server environment.
Trade on our TradeNoesis Platform
Open an account with our Partners / Affiliate Brokers to become a TRADENOESIS trader. Complete back-office access is provided for forex trade with our enhanced TradeNoesis platform trading software, along with competitive spreads on major currency pairs and the ability to access a range of markets from just one account.
Experience a highly efficient trading process with the TradeNoesis package, its advanced analysis features, and further tools. Request a demo or open a live account and start using the TradeNoesis platform for online trading.