Learn-to-Trade-Forex.net Forex Trading Software Interactive Online Course

This article on foreign exchange basics will look at the forex market. There is a lot to discover about the foreign exchange market and you will need to understand how it works if you plan to take practical steps towards becoming a successful forex trader.

You will come across several different terms for the forex market. Forex and fx are both short ways of saying ‘foreign exchange’. It may also be called the currency market, the foreign currency market, the currency trading market, etc. All of these terms refer to the same international market on which the currencies of the world are exchanged and traded.

There is no specified location for the Forex market. Nearly every country takes part in the marketplace; therefore, almost every country trades in currencies. The market is open 24 hours daily on five days of the week, for this reason. The week begins in Sydney, Australia on Monday morning, which is 5 pm Sunday EST in the USA. The week ends on Friday in New York at 4pm EST. You can trade currencies somewhere in the world during this period.

Interestingly enough, the Forex market is a new event. Since WWII, until the 70?s, world currencies appeared to be stable enough when comparing them to one another. However, the gold standard placed a value on each currency according to the US dollar. This particular system was introduced in order to maintain a stable economy worldwide.

However, when the USA discarded the gold standard in the early 70?s, the values of various currencies began changing. Rather than only making exchanges when they needed to transfer money from one country to another, the banks instantly began exchanging currencies for profit by buying low and selling high. The result was every currency became a commodity of trade. This is how Forex trading began.

Remember that the value of a currency is influenced by the nation to which it belongs. This means that the currency of a nation increases in value when that nation is prosperous. As a direct result, if a nation is facing a national crisis, the value of their currency decreases, such fluctuations can be very fast and very large. Most often, there are very large sums of money involved. Nearly $2 trillion dollars a day is the average to the total values of transactions on the Forex market.

Large financial institutions, such as major corporations, international and investment banks as well as others are involved with these exchanges. It is possible, however to trade as a private individual while using a broker. Another popular media of trading is online using the internet. Today there are multitudes of individuals who involve themselves in Forex trading via their home computers. However, they only account for about 2% of the total Forex market, since their trades are in smaller sums than those of other institutions.

Most often exchanges involve the US dollar against other currencies such as the Euro, Japanese yen, Australian dollar, Swiss franc and the British pound. However, it is possible to trade any currency against another. Many individual traders may use automated Forex robots to concentrate on lesser currency pairs such as the Euro against the pound.

The foreign exchange market is vast; some individual traders may feel outnumbered by large corporations. However, with a little capital to risk anyone can get in on the market for trading. You may start with as little as $250 when you work with a broker. However, you really should practice with a Forex demo account while you are learning the foreign exchange basics before actually investing any real money.

I long had dreamed of turning on a computer and having it do all the background work and actually make trades for me while I went golfing or something. On a dare from a trading partner, I decided to try them out. Trading robots or Expert Advisors as they are sometimes called, are quite the rage these days, judging by how many are offered. But do they actually work.

NOTE: The Following Video Is Subjective. Also Know As A Commercial.


I set about looking at systems that would work with my forex trading account which is based on Meta Trader and allows EA’s. Most of the ones that I checked into had huge losses in the back testing results, and so I crossed them off the list. When I was through looking at back testing results, my list of potential robots had grown very small with only a few making the cut.

With the most up to date automated forex trading software, losses are still unavoidable and will be made occasionally just like any form of investment. However, it is that the risk-reward ratio of currency trading, especially with robot trading, that make the risk of making losses on some weeks is well worth taking, because of the massive potential amount of profits that can be made.

Each robot or EA system has their own unique way of trading, profit targets, risk levels and money management techniques. I prefer not to use software that try for large gains but are very risky in nature. Experience dictates that it is much harder to continue growing your money once you have suffered a huge single trade loss.

One good way to check whether any auto forex trading software is too risky would be to look at how much maximum it has lost on its back test results. Back test results are usually available on the robot’s main website. The really good ones also have live trading results the update daily or every several hours.

An area that separates the really good EA’s from the so-so is if the EA can factor in the spread your dealer is offering. This is especially important if you are just trying to get your 10 pips and the dealer just raised the spread from 4 pips to 10.

This is the one area where most trading software gets killed in real time trading. It is why so many currency auto trading software programs show fantastic historical results, and when you buy it and try it in a live market you get creamed. It is a huge factor in separating the winners from the losers in auto forex trading.

About the Author:

Jason Marcano has been trading forex for years and has watched the development of currency auto trading software into what it is today. He can be reached at Forex Trading Machine or Automated Forex Trading Systems. Get a totally unique version of this article from our article submission service

]]>