Tips and Tricks for Trading Forex (Forex Trading)

Choosing a good Forex broker To start trading forex, the first thing to do is to choose a safe and reliable broker.

A foreign exchange provider authorised and regulated by one of the main bodies such as the Spanish National Securities Market Commission (CNMV) or the Financial Conduct Authority (FCA) in the UK. A broker who has good opinions, such as iFOREX (based in Cyprus and regulated by the Cyprus National Securities Market Commission CySEC). In addition, when choosing your Forex broker we recommend that you take into account the following: Your reputation, reviews and opinions of other users. Have them have a free demo version if you want to practice first. They allow you to start by investing a low amount and with sufficient leverage. The competitiveness of the spreads for the main currencies and also for the exotic ones if you plan to diversify. It has a platform adapted for mobile if you plan to access it from your smartphone. Get free training and courses on how to trade quality Forex. Available payment methods. Below you can see a review of a broker that contains most of the requirements that seem important to us. Take a look at it to see how it works. Choosing the best currency pair to trade In the Forex currency market there are many currency pairs available for trading. It doesn’t matter which currency your trading account is in, as the exchange is done automatically and transparently. If for example you decide to buy the EUR/USD (Euro/United States Dollar) pair you will be buying Euros and paying in dollars. The four main currency pairs in the Forex market are the following: EUR/USD (Euro vs US Dollar) GBP/USD (Pound Sterling vs US Dollar) USD/JPY (US Dollar vs Japanese Yen) USD/CHF (US Dollar vs Swiss Franc) It is estimated that approximately 70% of the Fx market transactions worldwide are made with this pair, so it is the one with the most liquidity.

The most popular, as you can imagine, is the EUR/USD pair, as it has the highest trading volume. The other three currency pairs also have a large trading volume; and of course, there are other attractive pairs that are the result of combining or crossing the 4 most popular currency pairs, such as the GBP/JPY and EUR/JPY. These pairs with the highest liquidity and trading volume are the most suitable for a beginner trader. There are two main reasons for this: they are a priori potentially low risk because they are less volatile: their movements are less abrupt and “more predictable” because they are influenced by the situation of the large economies worldwide (It is easier to keep up with the European and American markets than with other smaller economies). The second reason is that the most exotic pairs have higher spreads (spread = the spread between the buy and sell price that the broker applies as commission) than the main pairs. The main pairs usually have a spread of less than 3, while the exotic pairs can exceed 15. The best times for currency trading There are days and times when there is more trading volume than others, and therefore more volatility. In general, according to the opinions of iFOREX experts, the best time to trade currencies is between 9am and 5:59pm (Spanish time) as this is when the highest trading volume is available. And especially at 9 am (London opening time), 2 pm (US opening time) and 5:59 pm (London closing time).

Keeping up to date with economic and political news (Fundamental Analysis) If you are going to invest in currencies, it is essential that you are up to date on economic and political aspects. This type of analysis, called Fundamental Analysis, is usually performed by investors with long-term strategies, but also by traders who want to take advantage of moments of high volatility to earn money after the appearance of important economic news. For example, good unemployment figures or an increase in the volume of exports can make a currency stronger and make investors decide to buy by increasing its value against other currencies. Also, a good recommendation is to consult an economic calendar with the most important economic news that may affect the currency pairs you are managing.

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