Broker to Trading

Forex is offered by CFD providers as CFDs on Forex Pairs. This means that the trader can use leverage and go long or short. Forex is a complex market and there is a wide range of strategies to trade it. One feature of Forex is that from open on late Sunday to close on Friday (GMT), it is always open, however there are market events and structures which may make some times more volatile than others.

The Forex market is traded as Forex pairs, which is one currency valued against another. The fundamentals in Forex are what factors may cause one side of the pair to strengthen relative to the other, that is they are relative valuations. This is part of the complexity of the Forex market.

Trading is based on speculation about future valuations, thus when valuing a Forex pair, there is a question of what will happen in the future on different time frames which adds complexity on complexity. This is a reason why the Forex market is highly technical, as technical analysis avoids such questions by assuming this complexity is expressed in and analysable from charting patterns.

It is still possible to use fundamental analysis, however this tends to be based on a kind of simplification. In news trading the interest is in the immediate reaction to a data release at a preset time (thus making the time frame essentially the same for all interested traders). This means a very rapid response, maybe below, around or a bit longer than a minute. Even if the trader has guessed the actual market response, it can still react in unexpected ways, i.e. the complexity does not go away.

One way out is to use robots, which execute automated trading strategies. However these are not a panacea, and can create sometimes rapid drawdown. The advantage of robots is that they can trade the market in ways that humans cannot or may find tiring (and can do so without tiring).

Another approach is to copy trade, and let more experienced traders trade. However the trader may find that this results in a deficit in market experience. There are also other issues to do with the potentially differing aims and capacity of the followed traders, as well as the fact that performance can change. This said, copy trading is still a way to copy the trading of more experienced traders and social data can potentially help the trader with their own trades planning.

This does not mean that Forex is untradable, rather it is a market which in some ways is amenable to a wide range of trading, it does mean that it is complex and difficult to trade to get desired results.

The provider's offering of online trading platforms is a way to let the trader try different types of Forex trading (as different platforms can have differing capabilities), or to focus on one type. Thus a pick is made of 'Forex Trading Platform Provider'. Traders may wish to trade Forex with fixed spreads, so a pick is made for 'Fixed Spreads Forex Provider'. Finally the trader may wish to use a provider which focuses on features for automated traders, so a choice is made for 'Automated Forex Trading Provider'.