Trading education » Currency Pairs

Stock Trading Software

admin — Fri, 26 Mar 2010 17:45:04 +0000

When it comes to stock trading software, there are many programs to choose from. Whether you are a professional trader or a trader with few skills, there are certain things you should look for in your stock trading software depending on where you want to trade.

The Forex stock trading software is made to let you work your way through the Forex market. The Forex or foreign exchange is the place to look for currencies worldwide. The different currencies are being exchanged daily with one another from small portions to large amounts. This is the world’s largest amount of transactions, as on a daily basis more than three trillion dollars are exchanged in this manner. When you decide to trade on Forex, you are allowing all of your investments to be changed from one currency to another currency. If the currency drops from bad economy, your investment is still safe because you can choose another stronger currency. Currency pairs are commonly used such as USD and Euro.

With this being said, Forex can be confusing if you do not know what you are doing with all the conversions and currencies. Finding a stock trading software that allows education and utilization of Forex is indeed something all traders should do. There are free stock trading software programs that offer technical analysis online, remember you are taking part in electronic trading and will be using the electronic automated stock exchange. So finding a software program that works well with real time updates is essential. Another crucial selling point you should look for in your stock trading software is a price to earnings ratio option. This is the most popular of stock analysis metrics, and is normally found in most high end software programs.

Financial stock trading software programs are used to complete analysis and comparison as well as charting of the stock market to help you make an informed decision. There are many high end stock trading software programs that can be downloaded for free on the internet that will help you to balance your portfolio as well as give analysis of different brokerages and other financial businesses. Most all programs will also offer you the opportunity to create and test investment strategies while setting your goals for income requirements. These options are important for those who are just starting out in the investment world, as well as those who are well seasoned traders so everyone can benefit from these points.

One common denominator between free and fee based stock trading software programs is that they all will help you adhere to the golden rule of trading: buy low and sell high. Many of these programs will have artificial intelligence built right in so that even when you are not looking, the software will alert you to stocks that go low and have the potential to rise again in the very near future. An automated helper right on your computer, looking out for your financial interests: what more could you ask for?

By: Stephen V Hill

Forex Trading Education – 2 Simple Tips To Start Winning

admin — Fri, 29 Jan 2010 22:13:13 +0000

In this article I’m going to share with you 2 uncommon tips that most losing traders don’t know about. Try demo trading with these tips in mind, and chances are you’ll find that you’ll become a better trader.

Tip #1 – Trade Less

This doesn’t mean that you should pay less attention to your trading charts. What I mean is that you should enter into fewer trades which have a higher probability of winning.

Many new traders make the mistake of entering into every single “decent” trade setup that they see. The problem with this approach is that these traders are concentrating too much on maximizing their chances of winning (more trades, more chance to win right?), without considering that they are actually increasing their chances of losing too! Generally speaking, the more trades you enter into, the more risk you are taking.

Forex trading is a risky business, so try not to increase the amount of risk that you’re already taking. When you enter into trades less frequently, you’ll naturally choose those with a higher probability of winning, and NOT enter into trades with a lower probability of winning.

Remember, in Forex trading, it’s not about how many times you win, but how MUCH you win. Even if you only have one successful trade each month, it’s enough for you to be rich if you can be consistent about it.

Tip #2 – Put Your Eggs In One Basket

I’m sure you’ve heard of the phrase, “Never put all your eggs in one basket” which refers to the diversification of your funds. Generally, this is good advice.

However, in the Forex market, a better piece of advice would be “Only put SOME of your eggs in one basket”.

Similarly to Tip #1, placing too many trades at the same time will dramatically increase your risk of losing. Trading too many currency pairs at the same time, is a tactic used by many inexperienced (and often losing) traders. They think that by diversifying their trades, they can better limit their potential losses.

This is a big mistake unless you have a large capital pool to trade with.

If you only have $2,000 of capital to trade with, for example, your stop loss levels are going to be very tight if you have too many trades open at the same time.

This often results in most of your stop losses being triggered, causing you to immediately lose in your trades.

By: Harold Hsu

Getting a Solid Forex Trading Education

admin — Tue, 12 Jan 2010 19:45:38 +0000

There are a lot of Forex trading courses online that promise to teach you everything you need to know to jump into the market with confidence. If you are new to Forex, though, how can you tell which ones will truly provide you with the solid Forex trading education you need?

A reputable course should training material on all the fundamental concepts for beginners, including:

*Exchange rates

*Fixed rates versus floating rates

*Currency pairs

*Bid Prices versus Ask Prices

*Spreads

*Lot Sizes

*Margins, Margin Calls and Leverage

*Pips Values and their role in calculating profit and loss

*How to evaluate leading economic indicators

*How to read Forex signals and charts

This is just the bare minimum. A really good course should also walk you through a variety of trading examples, and show you how to perform ‘test trades’ yourself using a demo account with a reputable broker.

Another thing you can do to help speed your learning process is to immerse yourself in the literature of the market. There are scores of books and magazines available on the subject both online and off. You might want to have a look at the free, online magazine called Currency Trader http://www.currencytradermag.com

Finally, consider enhancing your knowledge of other financial marketplaces. You will find some concepts and terms repeated when reading about how to trade on the Stock Market, or how things like interest rates fluctuate for bonds, bills and other instruments.

This is especially useful if you feel more comfortable in one area of financial knowledge than other because you will be able to see some related concepts from Forex in a context with which you are already familiar.

By: Karen Kaminski

Forex Trading Education – What Is A Carry Trade?

admin — Sun, 10 Jan 2010 19:59:46 +0000

You’ve read about it in the newspapers, and you see it in almost every financial trading magazine… but what exactly is a carry trade? And why is it so popular?

Before I go into what happens in carry trades, allow me to briefly share with you why “carry trade” is an important concept to understand…

Throughout most of 2006 and 2007, carry trades have played a major role in influencing the major trends of various currency pairs. Just take a quick look at the EURUSD, USDJPY, AUDJPY, CADJPY or NZJPY trading charts during this period and you’ll see what I mean. You’ll notice a major uptrend across these currency pairs, and this is mainly due to the effect of carry trades. If you were in-the-loop during this period, you’d undoubtedly be a very rich trader by now! All you had to do was to trade in the direction of the trend and you’d be winning big most of the time.

Simple Carry Trade Theory

Thankfully, the concept of a carry trade isn’t difficult to understand. Let me use an example to illustrate:

Imagine there are two banks. Bank A charges an interest rate of 8% a year, and Bank B charges an interest rate of 2% a year.

If you’re a quick thinker (and I’m sure you are), you’ll realize that you can just borrow money from Bank B, and deposit that money in Bank A (to earn interest) for a sure profit!

And this simple technique is basically what carry trades are about. The difference is that instead of exploiting the interest difference between Bank A and Bank B, institutional traders and fund managers exploit the difference between the interest differences between countries.

Carry Trades In Reality

In reality, people like to borrow the Japanese Yen (JPY) to purchase other ‘higher interest rate’ currencies such as the New Zealand Dollar (NZD) and the Australian Dollar (AUD).

This is because the Yen typically charges a relatively low interest rate of 0.5%, compared to the NZD and AUD which interest rates are roughly 6-8%

By: Harold Hsu

Spot Forex Trading Part 5 – The Forex Heatmap

admin — Sat, 19 Dec 2009 16:27:33 +0000

This article is Part 5 of a series of 9 articles dedicated to help anyone to trade the foreign exchange.

The Forex Heatmap gives a spot forex trader an easy-to-interpret forex data visualization tool that organizes the data from 20 currency pairs into color-coded results for fast and accurate entry decisions.

The majority of forex traders don’t know the condition of the market when they enter a spot forex trade.

There are two reasons for this. The first one is ignorance. Most forex traders trade one pair like the EUR/USD and are looking at off-the-shelf standard technical indicators on one timeframe. They continuously force trades into the EUR/USD when there is no trade there at all. In the meantime other pairs are moving hundreds of pips, they simply cannot see the larger picture.

The second reason is that once a forex trader has decided that they to want to know the condition of the entire forex market when they enter a trade, or that they want to trade the best currency pair available, they see that it is not possible because up to now there were no good quality market forex scanners are available. When a forex trader searches for such a tool that gives them a picture of the market they find that a tool like this may not exist.

This is where the Forex Heatmap enters the picture. The Forex Heatmap quickly and conveniently verifies your entry decision into a spot forex trade across 20 pairs. Trading accuracy improves dramatically and you will also know when to NOT enter a trade.

Typically at the point of entry the spot forex trader must worry about placing the trade and making sure that the correct pair and direction are entered on the trading execution platform while watching a price chart. There simply is not time to click on the charts from many pairs to verify the entry decision or the overall market condition and this is where mistakes happen and emotion takes over. Traders need a quick entry verification tool that streamlines the entry decision process and speed is critical.

The Forex Heatmap solves all of these problems. It is a dynamic visual tool that consolidates the data from 20 currency pairs using real time data and translates the data into a visual map. When you combine the Forex Heatmap with a simple trading plan, knowledge of support and resistance, parallel and inverse analysis, and the direction of the trend you now have a powerful combination of high quality analytical and decision making tools for trading. Emotional trading gives way to logical trading. The full potential of 20 currency pairs is now yours not just the one or two currency pairs you have focused on in the past.

Heatmap technology is becoming more common in business, financial and technology, and the Forex Heatmap is leading the way to create successful spot forex traders.

By: Mark A. Mc Donnell

Currency Pairs in Global Forex Trading

admin — Thu, 17 Dec 2009 15:24:54 +0000

Generally speaking, any two currency pairs can be traded back and forth. Even if common information is not kept about two specific currency pairs with respect to each other, that currency information can be obtained by comparing both of those currencies to the American dollar. The world economy still largely operates based on the US dollar, and for that reason, you can use that dollar as a middle man to trade any two currencies the world has to offer. That said, however, there are some currency pairs that are more commonly traded than their counterparts and these pairs are the focus of the discussion below.

American Dollar and European Dollar: This particular currency pair is also known as the EUR/USD or the USD/EUR depending on the particular point of view to trading that you bring to the table. It is also arguably the most traded currency in the world when the major conventional traders are removed from the picture which essentially means that most of the individual traders that enter the Forex market through online channels eventually settle on trading these two currencies back and forth. Over the long run, there has been a steady gain of the EUR on the USD and over the short run there is enough volatility in the market to allow you to make multiple trades on trends a day if that is what you want to do.

American Dollar and British Pound: This particular currency pair is also known as the USD/GBP or the GBP/USD currency pair. This used to be the most common currency pair traded in the world and might still be the most common one traded if you put the conventional large traders back into the picture. There tends to be far less short term volatility in this market which is perhaps why individual traders prefer the EUR/USD to this one.

American Dollar and Canadian Dollar: This one is also known as the USD/CAD or the CAD/USD. While not a particularly common trade made on a worldwide scale you will see this trade quite often in the North American market. Even outside conscious Forex trading there are hundreds of exchanges between these two currencies everyday because of the close relationship the two parent countries have.

European Dollar and British Pound: Also known as the EUR/GBP or GBP/EUR. This is a very popular trade in Europe and particularly in the United Kingdom but on a worldwide basis it is generally a better bet to go with the EUR/USD currency pair because of the greater volatility that market brings to the table.

Chinese Yuan and Japanese Yen: This is the CHY/JPY or the JPY/CHY currency pair. This trade is very popular in Asia and like the CAD/USD trade also occurs quite often outside of conscious currency trading with the number of people that travel back and forth between areas that have these two pairs.

These are by no means the only currency pairs available for you to trade as stipulated in the introduction, but they are definitely some of the more popular ones. Every reputable and decent quality online Forex software will automatically have at least these five currency pairs programmed into them and a good number of the software packages you can find on the internet will have many more as well as custom options that you can use to track your own currency pairs.

By: Brent Crouch

Trading Algorithms – Autopilot Algo Trading Reveals the Forex Tracer

admin — Mon, 14 Dec 2009 19:33:12 +0000

Trading Algorithms are relatively new to the Forex Market and there are a few products on the market which now incorporate these Algo trading detection mathematics into their software. One of these is the New Forex Tracer. Released on to the market in June 2008 this new software comes with the following trading system set up.

A sophisticated strategy developed to analyze currency markets, it combines break out systems with an indicator based system to confirm the market and is analyzed and set up the way it should be. A risk management tool, that calculates the amount of lots related to the risk associated with each trade and shields against excessive losses and margin calls.

A market engine strategy where an automatic engine enters the market as safely as possible, which through its algorithms protects the trade from unpredictable behavior and/or the brokers false doings. A set of money management tools that exit each trade as safely as possible to make the most of multiple trades.

Forex Tracer also trades their system live so traders who use the algorithm trading software can publish their live trades online. The Forex Tracer also runs a Blog where traders offer there day to day trading stats from up to 11 currency pairs available within this Algo trading software.

The Foreign Exchange Market is a relatively new trading platform and as this unpredictable market continues to be sourced and scalped with difficulty, only a few Forex Algorithm Trading Products have been released on to the market.

For beginners wanting to get ahead in this market it is strongly advised you trade on a play account before you get involved for real.

By: Rob R Carmichael