Forex Software, Forex Trading Software

While forex trading offers investors opportunities to make huge profits, the probability of incurring losses is not low. In order to increase the chances of profits, one can study economic and financial data, stay updated on interest rate movements and remain abreast of news related to the countries to which the currency pair belongs. One of the sources of such extensive data is forex software. Forex trading software also enables traders to monitor forex market trends and to conduct online trading.

How Does Forex Software Work?

Forex trading software includes trading software as well as charting software. Thus, you can access the most up-to-date rates and participate in trading in a secure, private and efficient manner on the same platform. You can select from web-based and client-based forex software systems.

Client-based software can be downloaded and installed on your personal system. However, this type of software has limited accessibility, since you can use this software for trading only on the system on which it is installed. The web-based system is present on servers that are located on various sites. Thus, this system can be accessed from anywhere across the world. Moreover, this system is less vulnerable to viruses and hackers.

Benefits of Forex Software

The benefits of forex software include:

• Analysis of prior market data and projection of market behavior with the use of graphs that depict the rise and fall of the value of each currency.
  
• Determination of the current foreign exchange rate.
  
• Protection of personal data of traders.
  
• Providing access to all aspects of the forex market at any given time.
• Ability to read and analyze personal and market data.
  
• User friendly interface that offers several analytical tools.
  
• Simplifying the trading process.
  
• Providing a forex demo account that helps newcomers experiment with forex trading.

How to Select Appropriate Forex Trading Software

Any forex trading software that you select must:

1. Be easy to use.

2. Provide a high level of security, integrity and privacy.

3. Be from a company that offers you technical support and maintenance services around the clock.

4. Be reliable and have limited to zero downtime.

How does Forex market work?

The Forex market is a non stop financial market where currencies of different nations are traded, through brokers called Forex brokers. The foreign currencies are continuously are bought and sold across the local and global markets, while traders keep on increasing or decreasing the value of an investment over currency movement. Currencies are always traded in pairs like the Japanese Yen against the US Dollar, or the Euro against English Pound.

Basically every transaction involves buying of one currency and selling another, so if an investor thinks that US Dollar will grow against Yen then he will sell yen and buy US Dollars. The possibility of profit is present, as the movement between the currencies is always there. Substantial profits can be achieved with the small changes even, as a huge amount of money is involved in every transaction. Forex market can be relatively secure for individual investors. There are numerous software tools that exist to minimize loss and also there are safeguards which are there to protect both the broker and investors.

Forex market status can change at any time, so it is considered as very dynamic and fragile market. Conditions of Forex market keeps on changing every second.

Foreign Exchange Market is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair and not like stocks and futures exchange.

One of the features of Forex market is its stability. As everybody knows that the sudden falls are very usual in the financial market. As compare to stock market, the Forex market never falls. In the share market if the share devalues it means it is collapsed but if the value of one currency falls the value of other currency rises or the other one becomes stronger.

Forex market has high liquidity. It has approximately fifty times more daily trading volume as that of the New York Stock Exchange. Traders are always there to participate in the purchase and sale of foreign currencies, creating a greater liquidity and price steadiness for online traders.

Forex Analysis

There are basically two analysis strategies that are important in Forex market, they are:

Technical Analysis and Fundamental Analysis

Technical Analysis is a technique that is preferred by all small to medium traders. Price Chain it is a very important aspect of Forex that requires full consideration. Price chain is used to predict the market and currency fluctuations.

Fundamental Analysis depends on the country’s present currency situation. It also has to consider the political dealings, economy and other things which affect the currency. Predictions must be also based on the Forex trader’s potential.

Like any other investment, Forex is also similar to gambling. Before getting into this business one needs to know how to go ahead with it. The online sources or the e-books are the best way to get educated.

Forex Trading

Forex trading refers to the trading between currencies. Forex is the most important Economic Indicator. It is also one of the Greatest investment Opportunity. The important advantage of this business is that it allows us to begin with a small investment and make a good return from the business.

Forex Market Never sleeps. You have to be on your toes if you choose this trade.Slight variations in the value of the currencies mean great profit or loss for the traders. You must be well informed and educated before you enter this trading.

Why Forex? Because it allows us to begin this trading with a small investment. There are forex brokers offering to help you begin trading with investment as low as 25 USD. Second benefit is its high leverage margin. You can trade up to 100 times the amount you invest in this trading because of the high leverage margin benefit. Third benefit is that it allows us to make phenomenal returns on our investments because of the volume of trade.

There are certain disadvantages too. You have to be prepared for a loss also. The chances are that one day you may wake up to see that all your investment is wiped out because of the variations which are measured as pips. But, the risk factor is what make this exciting. The risk factor can be overcome by proper education and intuition.

Forex trading is a business which is affected or controlled by various factors. Regional, Economical and political factors are some important variants here. You must also learn to track the performance of a particular currency over a period of time. You must base your intuitions based on the knowledge you acquire over a period of time from the knowledge.

Forex Definitions and Terms

Ask: Price at which broker/dealer is willing to sell. Same as "Offer".

Bid: Price at which broker/dealer is willing to buy.

Bid/Ask Spread (or "Spread"): The distance, usually in pips, between the Bid and Ask price. A tighter spread is better for the trader.

Cost of Carry (also "Interest" or "Premium"): The cost, often quoted in terms of dollars or pips per day, of holding an open position.

Currency Futures: Futures contracts traded on an exchange, most typically the Chicago Mercantile Exchange ("CME"). Always quoted in terms of the currency value with respect to the US Dollar. Parameters of the futures contract are standardized by the exchange.

Drawdown: The magnitude of a decline in account value, either in percentage or dollar terms, as measured from peak to subsequent trough. For example, if a trader's account increased in value from $10,000 to $20,000, then dropped to $15,000, then increased again to $25,000, that trader would have had a maximum drawdown of $5,000 (incurred when the account declined from $20,000 to $15,000) even though that trader's account was never in a loss position from inception.

Fundamental Analysis: Macro or strategic assessments of where a currency should be trading based on any criteria but the price action itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements.

Leverage: The amount, expressed as a multiple, by which the notional amount traded exceeds the margin required to trade. For example, if the notional amount traded (also referred to as "lot size" or "contract value") is $100,000 dollars and the required margin is $2,000, the trader can trade with 50 times leverage ($100,000/$2,000).

Limit: An order to buy at a specified price when the market moves down to that price, or to sell at a specified price when the market moves up to that price.

Liquidity: A function of volume and activity in a market. It is the efficiency and cost effectiveness with which positions can be traded and orders executed. A more liquid market will provide more frequent price quotes at a smaller bid/ask spread.

Margin: The amount of funds required in a clients account in order to open a position or to maintain an open position. For example, 1% margin means that $1,000 of funds on deposit are required for a $100,000 position.

Margin Call: A requirement by the broker to deposit more funds in order to maintain an open position. Sometimes a "margin call" means that the position which does not have sufficient funds on deposit will simply be closed out by the broker. This procedure allows the client to avoid further losses or a debit account balance.

Market Order: An order to buy at the current Ask price.

Offer: Price at which broker/dealer is willing to sell. Same as "Ask".

Pip: The smallest price increment in a currency. Often referred to as "ticks" in the futures markets. For example, in EURUSD, a move from .9015 to .9016 is one pip. In USDJPY, a move from 128.51 to 128.52 is one pip.

Premium (also "Interest" or "Cost of Carry"): The cost, often quoted in terms of dollars or pips per day, of holding an open position.

Spot Foreign Exchange: Often referred to as the "interbank" market. Refers to currencies traded between two counterparties, often major banks. Spot Foreign Exchange is generally traded on margin and is the primary market that this website is focused on. Generally more liquid and widely traded than currency futures, particularly by institutions and professional money managers.

Stop: An order to buy at the market only when the market moves up to a specific price, or to sell at the market only when the market moves down to a specific price.

Technical Analysis: Analysis applied to the price action of the market to develop trading decisions, irrespective of fundamental factors.

Forex Account Means

What Does Forex Account Mean?

The type of account a forex trader opens with a retail forex broker. Forex accounts come in many forms, but the first that is opened is often the forex demo account.

Forex Account Explains:

After the trader has tried out demo accounts with a few different dealers, a funded account would be the next step. Mini accounts, full accounts and managed accounts are the most common types of funded accounts. Mini accounts are similar to full accounts except that currency is traded in lots of 10,000 rather than 100,000. This allows for lower mandatory initial deposits and greater customization of risk management.

Is is important for currency traders to consider what they want to get out of their accounts before deciding on the type to open. Demo accounts and mini accounts are great for the retail forex trader to learn a profitable system and get used to the broker's execution methods.