Broker to Trading

Forex trading is based on trading pairs of currencies. The underlying currency pairs are tied to a particular economy. As the instrument is a pair, its value is based on changes in value of each currency pair. These relative changes create complex patterns in a chart as the pair traces out movement (for example as one weakens or one strengthens and so on).

Trends and ranges can occur at all time frames in Forex trading, as currencies strengthen and weaken. It is possible for a Forex pair to move strongly in one direction, for example in a news trade when news data in an economy creates a potential strengthening or weakening of one side of a pair. Even here though, retracements, pauses or oscillations can be quickly seen.

The trader then can speculate on how a pair will move, based on a wide range of factors. Fundamental analysis in general seeks to look for clues in economic data, indicating whether a currency will strengthen or weaken. Technical analysis looks to the chart and applies various techniques to obtain an analysis or rationale about how a pair will move. Technical analysis can be based on factors such as deviations from normal ranges in valuation as well as momentum and other factors. Pattern based analysis examines patterns traced out by the movement of currency pairs and based on past behaviour of these patterns suggests potential outcomes. Candlestick analysis looks for patterns made by the candlestick chart price type and assigns potential outcomes to these patterns based on past behaviour.

Because all analysis is predicated on expected outcomes contingent on past behaviour it may not reproduce these outcomes in the present. Analysis though provides a rationale for making a trade even if it is wrong. The trader can apply these analysis methods themselves (and others), planning and executing their own trades.

However Forex is open continuously during the week and has different market sessions which are geographically separated, meaning that a session may be open at a time inconvenient to the trader. Traders may wish to trade a particular sessions for a wide range of reasons including that a currency from that region is being traded. Also, the trader may make medium or longer term trades but may also make shorter term trades. Applying a trade with frequency can be tiring. Some trades may be impossible for the trader to apply, for example higher frequency trading or applying complex models (called algo trading, though all automated trading is performed by algorithms).

For these and other reasons the trader may wish to apply automated trading strategies to the Forex market. Forex brokers typically offer an online trading platform or platforms which supports automated and non-automated trading. MetaTrader 4 (MT4) is one such platform as is MetaTrader 5 (MT5), the successor to MT4, cTrader and JForex.

Some brokers which provide Forex may not support automated trading with robots. Some may have other techniques such as crowd, social or copy trading, which adds further types of analysis for markets, as well as the potential to let other traders trade on the trader's behalf (when copy trading). Traders who do not use robots but plan and execute their own trades may wish to consider a user friendly platform designed for the human trader.

The Best Broker For Forex Trading

The pick of the best broker for Forex trading is FOREX.com. FOREX.com is a broker for the Forex trader, with 90+ Forex pairs to trade (a relatively large number). It offers a user friendly platform, its Advanced Trading Platform which is itself relatively user friendly and lets the trader build and use charting signals. For automated (and non-automated) traders, it provides MT4 supporting all EAs (MT4's online trading robots). Traders who wish to have Direct Market Access to trade 60+ Forex pairs and Precious Metals with low spreads (from 0.1) plus a volume based commission charge can apply for their DMA Account. Thus in one broker a wide range of approaches to trading Forex are designed for and supported.