Foreign Currencies Backed By Gold
The US Dollar was once backed entirely by gold, thus earning the term “greenback.” The Swiss Franc (CHF) was once 40% backed by both gold and silver, until 2006 when the country had to sell its gold and silver reserves to join the IMF. Today, not a single solitary currency on the face of the world is backed even 1% by gold or silver, as all nations have inflated their currencies to unprecedented levels in the past 50 years.
Commodities (Gold) and Currencies
Despite selling its large gold and silver reserves in 2006, the Swiss Franc (CHF) remains as an excellent bet on precious metals. Investors, seeing value in the anonymity and neutrality of Switzerland, typically buy the Swiss Franc as a safehaven investment during turbulent economic times. The USD/CHF pair typically performs to parity with the price of gold, with the dollar typically representing the “anti-gold” and the Swiss Franc a partial gold hedge.
Forex Brokers and Commodities
Since you can’t buy a currency backed by gold, the next best investment would be to buy gold either on the spot or futures markets. Many forex brokers such as Oanda.com and others allow investors to buy spot gold with leverage, enabling the ability to short virtually all currencies. Oanda in particular offers 30:1 leveraging on the spot price of gold, which is one of the best offers in the forex market. Others, such as InteractiveBrokers allow investors to buy and sell on the futures market, which is highly leveraged (100:1) but requires greater timing to profit.
Monday, October 11, 2010
Why Forex Education?
Why Forex Education?
Are you a beginning trader, or even a seasoned trader who is looking for a sound approach to consistent trading? If you are looking for the perfect trading system and immediate results, perhaps you have stumbled upon the wrong website. Currency College is not about getting rich quick! Our focus on sound trading strategies can be helpful in improving the trading skills of students at our Currency College. If you are interested in a black box system or red and green arrows, you might want to visit another website. We are here to help students develop as traders.
Proper training is essential to trading. Many firms in the forex business are simply trying to open as many accounts as possible without any concern for their clients' well-being. Their main concern is that the clients trade and have no interest in whether the clients have relevant trading experience or not. Unfortunately, a trader is like any other entrepreneur - without the proper preparation and expertise, his or her chances of succeeding are greatly reduced. That is the reason why our firm puts so much emphasis into the mentoring of our customers. Our forex training was created to teach our clients a strategy to day trade currencies - a step-by-step approach to trading. A trader that uses a strategy or system to trade may be able to explore the opportunities of trading more extensively. Currency College plans to teach you how to become a trader for life.
Are you a beginning trader, or even a seasoned trader who is looking for a sound approach to consistent trading? If you are looking for the perfect trading system and immediate results, perhaps you have stumbled upon the wrong website. Currency College is not about getting rich quick! Our focus on sound trading strategies can be helpful in improving the trading skills of students at our Currency College. If you are interested in a black box system or red and green arrows, you might want to visit another website. We are here to help students develop as traders.
Proper training is essential to trading. Many firms in the forex business are simply trying to open as many accounts as possible without any concern for their clients' well-being. Their main concern is that the clients trade and have no interest in whether the clients have relevant trading experience or not. Unfortunately, a trader is like any other entrepreneur - without the proper preparation and expertise, his or her chances of succeeding are greatly reduced. That is the reason why our firm puts so much emphasis into the mentoring of our customers. Our forex training was created to teach our clients a strategy to day trade currencies - a step-by-step approach to trading. A trader that uses a strategy or system to trade may be able to explore the opportunities of trading more extensively. Currency College plans to teach you how to become a trader for life.
Foreign Currency Trading Scams
Foreign Currency Trading Scams
Unfortunately, not all websites and brokers out there are out to provide the best services. Many are actually foreign currency trading scams that prey on new investors. There isn’t just one kind of scam, there are many different ways investors may be taken for loads of money in the foreign currency business.
Bad Brokers
One common scam is shoddy brokerages that operate like bucket shops. These trading scams operate on the idea that most traders lose money, and thus do not place trades representative of their clients positions. Instead, bucket shops work like casinos and offer nothing to back trader’s forex positions.
Autmated Scams
Other foreign currency scams include automated trading programs. These programs, which are sold online directly to consumers, are almost always a downright scam. They offer their buyer’s riches, thousands of dollars per day just for letting the automated computer system trade currencies by itself. The fact of the matter is this: if you had a million-dollar trading program, would you sell it online for $100? Call me greedy, but I wouldn’t. You wouldn’t either.
Unfortunately, not all websites and brokers out there are out to provide the best services. Many are actually foreign currency trading scams that prey on new investors. There isn’t just one kind of scam, there are many different ways investors may be taken for loads of money in the foreign currency business.
Bad Brokers
One common scam is shoddy brokerages that operate like bucket shops. These trading scams operate on the idea that most traders lose money, and thus do not place trades representative of their clients positions. Instead, bucket shops work like casinos and offer nothing to back trader’s forex positions.
Autmated Scams
Other foreign currency scams include automated trading programs. These programs, which are sold online directly to consumers, are almost always a downright scam. They offer their buyer’s riches, thousands of dollars per day just for letting the automated computer system trade currencies by itself. The fact of the matter is this: if you had a million-dollar trading program, would you sell it online for $100? Call me greedy, but I wouldn’t. You wouldn’t either.
Forex Account Sizes
Forex Account Sizes
There is plenty of discussion by both strategists and brokerages about appropriate account sizes. While forex is considered highly unregulated compared to other financial markets, most brokers are reasonable and considerate about the proper role of capital in a trading account.
Nearly all brokers have a minimum account balance, and only one (that I know of), Oanda, requires no account balance at all. Most account balance minimums are in the neighborhood of $500 to $1000, which should be more than sufficient for most traders, and strategies, especially in accounts that allow you to trade mini lots (one-tenth the size of whole lots) or units (units are a single piece of currency).
What to Make of an Account Balance
A larger account balance is better for more “rigid” brokers, those that allow trading only in lots or mini lots. A mini lot account, for example, that is funded with $250 will disappear or double with the change of 250 pips in a single currency pair.
A forex brokerage account with no minimums and unit based transactions will allow the most flexibility. An investor could pony up as little as $50 and trade even 1 unit of GBP/USD for example, exposing them to just $1.60 worth of trades. Of course, this isn’t going to make you rich, but its not going to make you poor either. For most people, I recommend this route over a forex demo account.
Account Size and Leverage
Foreign exchange account sizes should also vary by the amount of leverage (buying power) a trader will use. For example, a $250 account at 400:1 is worth just as much as a $2,000 account at 50:1. So this is just one more variable to consider before making a deposit for investment.
There is plenty of discussion by both strategists and brokerages about appropriate account sizes. While forex is considered highly unregulated compared to other financial markets, most brokers are reasonable and considerate about the proper role of capital in a trading account.
Nearly all brokers have a minimum account balance, and only one (that I know of), Oanda, requires no account balance at all. Most account balance minimums are in the neighborhood of $500 to $1000, which should be more than sufficient for most traders, and strategies, especially in accounts that allow you to trade mini lots (one-tenth the size of whole lots) or units (units are a single piece of currency).
What to Make of an Account Balance
A larger account balance is better for more “rigid” brokers, those that allow trading only in lots or mini lots. A mini lot account, for example, that is funded with $250 will disappear or double with the change of 250 pips in a single currency pair.
A forex brokerage account with no minimums and unit based transactions will allow the most flexibility. An investor could pony up as little as $50 and trade even 1 unit of GBP/USD for example, exposing them to just $1.60 worth of trades. Of course, this isn’t going to make you rich, but its not going to make you poor either. For most people, I recommend this route over a forex demo account.
Account Size and Leverage
Foreign exchange account sizes should also vary by the amount of leverage (buying power) a trader will use. For example, a $250 account at 400:1 is worth just as much as a $2,000 account at 50:1. So this is just one more variable to consider before making a deposit for investment.
Trading Forex For a Living
Trading Forex For a Living
So you want to trade forex for a living? Who doesn’t? There are literally hundreds of thousands of people that trade forex for living and you can too!
Making a Living with forex
Making a living with forex may seem to be just a pipe dream, but many, many people are using the foreign exchange market as a way to provide for themselves and family. However, we can’t get too caught up in making millions, as very few traders ever make enough with forex to make a living.
Trading Forex Odds
Of all the traders that try to make millions with currencies, very few succeed and the majority fail miserably. Statistics prove that of all the traders who will set out to make a living with forex, only a small fraction will, while 90% of traders will lose everything in their first year. However, this isn’t always the case. Famed forex trader George Soros rose to be a billionaire with just one successful forex trade!
Where to Start Trading For a Living
To make a living trading forex, you’ll need to be well educated about the ins and outs of the foreign exchange market. Certainly, you wouldn’t try to make a living as a surgeon if you hadn’t yet completed medical school, and you can’t expect the same results with forex. Making money takes time, patience, and the ability to learn. If you’ve got those three criteria met, you’ll find yourself quickly advancing in the foreign exchange market, and making a living may not be so far off!
So you want to trade forex for a living? Who doesn’t? There are literally hundreds of thousands of people that trade forex for living and you can too!
Making a Living with forex
Making a living with forex may seem to be just a pipe dream, but many, many people are using the foreign exchange market as a way to provide for themselves and family. However, we can’t get too caught up in making millions, as very few traders ever make enough with forex to make a living.
Trading Forex Odds
Of all the traders that try to make millions with currencies, very few succeed and the majority fail miserably. Statistics prove that of all the traders who will set out to make a living with forex, only a small fraction will, while 90% of traders will lose everything in their first year. However, this isn’t always the case. Famed forex trader George Soros rose to be a billionaire with just one successful forex trade!
Where to Start Trading For a Living
To make a living trading forex, you’ll need to be well educated about the ins and outs of the foreign exchange market. Certainly, you wouldn’t try to make a living as a surgeon if you hadn’t yet completed medical school, and you can’t expect the same results with forex. Making money takes time, patience, and the ability to learn. If you’ve got those three criteria met, you’ll find yourself quickly advancing in the foreign exchange market, and making a living may not be so far off!
Picking The Right Forex Broker
Picking The Right Forex Broker
Picking the right forex broker is often the most important decision any new trader will make. In the past few years, there has been a virtual explosion in the number of forex brokers doing business. To the trader, this is great, as the number of brokers has helped lower the cost of trading and to provide better services and trading tools that were not available before.
Reputation is Everything
Unfortunately the foreign-exchange market is one of the most unregulated in the world, due in part to the fact that the exchange crosses national borders. With no authority to properly regulate the foreign exchange market, many investors find themselves with less than quality brokerages. It is recommended that each investor properly research each broker by searching for reviews about their service.
Picking the right forex broker is often the most important decision any new trader will make. In the past few years, there has been a virtual explosion in the number of forex brokers doing business. To the trader, this is great, as the number of brokers has helped lower the cost of trading and to provide better services and trading tools that were not available before.
Reputation is Everything
Unfortunately the foreign-exchange market is one of the most unregulated in the world, due in part to the fact that the exchange crosses national borders. With no authority to properly regulate the foreign exchange market, many investors find themselves with less than quality brokerages. It is recommended that each investor properly research each broker by searching for reviews about their service.
Forex Technical Analysis
Forex Technical Analysis
Technical analysis is very much different from fundamental analysis in that a technical analyst assumes that the price shows all known information about a currency pair. For the most part, forex technical analysts study charts rather than economic indicators to find the best entry and exit prices.
How Technical Analysis Works
Technical analysts use indicators and chart patterns to find where a currency pair’s price is likely to go. A technical analysts job is to see how investors are changing the price of a currency, and to see who is buying and selling and at what price.
Support and Resistance Basics
Support and resistance lines are some of the most basic technical trading tools. The support line is drawn at an area where the price is likely to rise. A resistance line is drawn where the price is likely to fall. Generally, support and resistance lines work for the small trader because larger investors like banks, hedge funds, and institutions have large buy or sell orders at the price specified. Retail forex investors can make a profit by riding the waves in price created by big investors.
More Complicated than Just Trendlines
There is far more to technical trading than just support and resistance lines, however. There are various indicators like the Relative Strength Index, the Moving Average Convergence Divergence, and even candlestick patterns. But we’ll get into all the small details in individual articles.
Shorter Term than Fundamental Analysis
Though technical analysis can be applied on long term charts, typically it is best suited for short term trading, or trades that last less than a month. Over time, the power of chart patterns and technical analysis is eroded by fundamental factors which play a larger role in the long term movements of a currency pair.
Technical analysis is very much different from fundamental analysis in that a technical analyst assumes that the price shows all known information about a currency pair. For the most part, forex technical analysts study charts rather than economic indicators to find the best entry and exit prices.
How Technical Analysis Works
Technical analysts use indicators and chart patterns to find where a currency pair’s price is likely to go. A technical analysts job is to see how investors are changing the price of a currency, and to see who is buying and selling and at what price.
Support and Resistance Basics
Support and resistance lines are some of the most basic technical trading tools. The support line is drawn at an area where the price is likely to rise. A resistance line is drawn where the price is likely to fall. Generally, support and resistance lines work for the small trader because larger investors like banks, hedge funds, and institutions have large buy or sell orders at the price specified. Retail forex investors can make a profit by riding the waves in price created by big investors.
More Complicated than Just Trendlines
There is far more to technical trading than just support and resistance lines, however. There are various indicators like the Relative Strength Index, the Moving Average Convergence Divergence, and even candlestick patterns. But we’ll get into all the small details in individual articles.
Shorter Term than Fundamental Analysis
Though technical analysis can be applied on long term charts, typically it is best suited for short term trading, or trades that last less than a month. Over time, the power of chart patterns and technical analysis is eroded by fundamental factors which play a larger role in the long term movements of a currency pair.
Fundamental And Technical Analysis Forex Trading
Fundamental And Technical Analysis Forex Trading
There are two different ways to study the foreign exchange market. The first of which, is fundamental analysis which relies on studying the impacts of the world economy on exchange rates. The second of which is technical analysis, which employs studying charts to make profits.
There is no right or wrong way to trade
There is absolutely no right or wrong way to trade the foreign exchange market as both fundamental analysts and technical analysts find the possibility of profit near equal. The different types of analysis have sparked an ongoing debate among the trading community, however, it is our belief that no matter how you profit, you’re still profiting! Making money is making money, no matter how you do it.
Find What Works for You
We’d like to offer you the opportunity to read up on both technical and fundamental analysis and decide for yourself what works better for you. Both trading types can be profitable and both can produce both long and short term results.
There are two different ways to study the foreign exchange market. The first of which, is fundamental analysis which relies on studying the impacts of the world economy on exchange rates. The second of which is technical analysis, which employs studying charts to make profits.
There is no right or wrong way to trade
There is absolutely no right or wrong way to trade the foreign exchange market as both fundamental analysts and technical analysts find the possibility of profit near equal. The different types of analysis have sparked an ongoing debate among the trading community, however, it is our belief that no matter how you profit, you’re still profiting! Making money is making money, no matter how you do it.
Find What Works for You
We’d like to offer you the opportunity to read up on both technical and fundamental analysis and decide for yourself what works better for you. Both trading types can be profitable and both can produce both long and short term results.
Types of Forex Market Orders: Market and Limit
Types of Forex Market Orders: Market and Limit
Now that we know what goes into a trade, we need to also know how to enter the trade to a broker. There are two main types of orders to buy currency, the first of which is a market order, the second is a limit order.
Market Orders
A market order is an order at the current market ask price for a certain currency pair. This type of order is filled instantaneously at whatever price the broker can match up with your entry. Market orders are used by virtually every trader, but are more often used by traders that want to buy at a certain time (now) rather than a certain price.
Limit Orders
A limit order is a special order put into a broker to buy a currency pair at a predetermined price. Let’s say that the current value of the GBP/USD pair is 1.5050 and you want to buy the pair, but at a price lower or higher than the current price. For the sake of discussion, we’ll say you’re interested in buying GBPUSD only at a price of $1.5025 and do not wish to buy it at the current price.
By entering a limit order, you are able to enter the price at which you’d like to buy ($1.5025) and how long you’re willing to wait for the order to be filled. If at any time the price falls to $1.5025, your broker will automatically enter the trade, choosing to buy X number of lots at this predetermined price.
Limit Order Operations
Most brokers will not require you, or your platform, to be logged into your account to execute a limit order. This is both a benefit and a negative, as you’ll be able to log out of your account and still have your orders in place, but should you forget, you might find yourself holding a position that you forgot about. Holding positions unknowingly is dangerous, due to the fact that the market may move wildly without you to close the position either for a profit or loss.
Now that we know what goes into a trade, we need to also know how to enter the trade to a broker. There are two main types of orders to buy currency, the first of which is a market order, the second is a limit order.
Market Orders
A market order is an order at the current market ask price for a certain currency pair. This type of order is filled instantaneously at whatever price the broker can match up with your entry. Market orders are used by virtually every trader, but are more often used by traders that want to buy at a certain time (now) rather than a certain price.
Limit Orders
A limit order is a special order put into a broker to buy a currency pair at a predetermined price. Let’s say that the current value of the GBP/USD pair is 1.5050 and you want to buy the pair, but at a price lower or higher than the current price. For the sake of discussion, we’ll say you’re interested in buying GBPUSD only at a price of $1.5025 and do not wish to buy it at the current price.
By entering a limit order, you are able to enter the price at which you’d like to buy ($1.5025) and how long you’re willing to wait for the order to be filled. If at any time the price falls to $1.5025, your broker will automatically enter the trade, choosing to buy X number of lots at this predetermined price.
Limit Order Operations
Most brokers will not require you, or your platform, to be logged into your account to execute a limit order. This is both a benefit and a negative, as you’ll be able to log out of your account and still have your orders in place, but should you forget, you might find yourself holding a position that you forgot about. Holding positions unknowingly is dangerous, due to the fact that the market may move wildly without you to close the position either for a profit or loss.
The Spread, A Forex Brokers Profit
The Spread, A Forex Brokers Profit
In our example from the previous article, we actually alluded to a few things. The first, is that there were a few costs in our example trade of 1 lot of GBP/USD. The hidden cost is the “spread” or the commission the broker earns for completing our trade.
How Forex Spreads Work
Unlike stocks or other tradeable securities, there is no set commission rate. With stocks, you may be accustomed to paying $6.95 to complete an online trade. In forex, we don’t pay commissions, instead the cost to trade is built into the forex bid and ask prices.
Bid and Ask
The bid and ask prices can be confusing, but we’ll make as much sense of the two prices as we can. The bid price is the price you would get when selling the pair. The ask price, is the price the market is asking for the pair. For instance, the pair GBP/USD may offer a bid price of 1.6101 and an ask price of 1.6104. If you bought the pair at 1.6104, you would immediately be able to sell the pair, at a loss, for 1.6101. Your net profit/loss would be negative 3 pips.
Why the Difference?
The difference between the bid and ask price is the illusive spread mentioned above. This spread is for the broker, for completing our trades. By selling to traders at one price, and buying from traders at another price, the broker is able to make money by completing our trades. A spread of 3 pips would create a profit of $30 for the broker, for each lot traded. This may seem to be horribly expensive, $30 a trade vs $6-7 for stocks, however the spread in forex is actually less than in the stock market.
Stock spreads vs. Forex Spreads
Spreads occur naturally in the stock market as well as in the foreign exchange market. The difference is that the forex market is not a centralized market like the stock markets. When you go to buy stock, there is a spread in the bid/ask price which is profit for the marketmaker, or the person who sits on an exchange and completes orders. In forex, the spread goes to the broker, who is a market maker in that they pair two orders to complete a trade.
All in all, spreads on the stock market are much, much higher than on the foreign exchange. The spread on the foreign exchange market adds up to roughly .03% of a trade. In the stock market, the spread is often 20 times greater, or about .6% of the cost of the trade PLUS the commission to complete the trade. All in all, the costs of trading the foreign exchange market are much cheaper than the stock market.
In our example from the previous article, we actually alluded to a few things. The first, is that there were a few costs in our example trade of 1 lot of GBP/USD. The hidden cost is the “spread” or the commission the broker earns for completing our trade.
How Forex Spreads Work
Unlike stocks or other tradeable securities, there is no set commission rate. With stocks, you may be accustomed to paying $6.95 to complete an online trade. In forex, we don’t pay commissions, instead the cost to trade is built into the forex bid and ask prices.
Bid and Ask
The bid and ask prices can be confusing, but we’ll make as much sense of the two prices as we can. The bid price is the price you would get when selling the pair. The ask price, is the price the market is asking for the pair. For instance, the pair GBP/USD may offer a bid price of 1.6101 and an ask price of 1.6104. If you bought the pair at 1.6104, you would immediately be able to sell the pair, at a loss, for 1.6101. Your net profit/loss would be negative 3 pips.
Why the Difference?
The difference between the bid and ask price is the illusive spread mentioned above. This spread is for the broker, for completing our trades. By selling to traders at one price, and buying from traders at another price, the broker is able to make money by completing our trades. A spread of 3 pips would create a profit of $30 for the broker, for each lot traded. This may seem to be horribly expensive, $30 a trade vs $6-7 for stocks, however the spread in forex is actually less than in the stock market.
Stock spreads vs. Forex Spreads
Spreads occur naturally in the stock market as well as in the foreign exchange market. The difference is that the forex market is not a centralized market like the stock markets. When you go to buy stock, there is a spread in the bid/ask price which is profit for the marketmaker, or the person who sits on an exchange and completes orders. In forex, the spread goes to the broker, who is a market maker in that they pair two orders to complete a trade.
All in all, spreads on the stock market are much, much higher than on the foreign exchange. The spread on the foreign exchange market adds up to roughly .03% of a trade. In the stock market, the spread is often 20 times greater, or about .6% of the cost of the trade PLUS the commission to complete the trade. All in all, the costs of trading the foreign exchange market are much cheaper than the stock market.
How Money is Made With Forex
How Money is Made With Forex
So, you know how the forex market works, now its time to find out how investors make money with forex. The premise of the foreign exchange market is simple, to exchange one currency for another currency which you believe will go up in value. The basics are much like the stock market, so anyone with any financial experience should pick up the foreign exchange market rather quickly.
Making Money With Forex
You make money in the foreign exchange market when one currency rises in value against another. For this portion of the tutorial, we’ll use the pair GBP/USD as our example.
We’ll start with 1 lot, or 100,000 units of GBP/USD. We think the Pound will strengthen against the US Dollar, so we buy one lot at 50:1 leverage and a price of 1.60. This means that we are buying $160,000 of the Pound, and staking $3200 and “borrowing” the other $156,200 through leverage. In the backend, our forex broker is moving $160,000 from a US bank account to a Pound denominated account. We’ve essentially sold, or traded, $160,000 for 100,000 pounds.
Cashing In
Four hours have passed and the GBP has strengthened against the USD by 50 pips. The forex broker’s quote is now 1.6050 and our 100,000 pounds are now worth $160,500, giving us a total profit of $500 on a $3200 investment. That’s not a bad return at all, it’s a gain of nearly 15% in just a few hours. Granted, we have used 50:1 leverage, but even then, results like these are more than typical!
Is Making Money in Forex Really That Easy?
Actually, it is. Making money on the foreign exchange market is as easy as knowing in which direction a currency pair is likely to travel. See, the difficulty is not in making money itself, but in knowing how to make money. In the following chapters we’ll reveal how to know in which direction a currency pair will go, but we still have a lot more to learn about the foreign exchange market itself.
So, you know how the forex market works, now its time to find out how investors make money with forex. The premise of the foreign exchange market is simple, to exchange one currency for another currency which you believe will go up in value. The basics are much like the stock market, so anyone with any financial experience should pick up the foreign exchange market rather quickly.
Making Money With Forex
You make money in the foreign exchange market when one currency rises in value against another. For this portion of the tutorial, we’ll use the pair GBP/USD as our example.
We’ll start with 1 lot, or 100,000 units of GBP/USD. We think the Pound will strengthen against the US Dollar, so we buy one lot at 50:1 leverage and a price of 1.60. This means that we are buying $160,000 of the Pound, and staking $3200 and “borrowing” the other $156,200 through leverage. In the backend, our forex broker is moving $160,000 from a US bank account to a Pound denominated account. We’ve essentially sold, or traded, $160,000 for 100,000 pounds.
Cashing In
Four hours have passed and the GBP has strengthened against the USD by 50 pips. The forex broker’s quote is now 1.6050 and our 100,000 pounds are now worth $160,500, giving us a total profit of $500 on a $3200 investment. That’s not a bad return at all, it’s a gain of nearly 15% in just a few hours. Granted, we have used 50:1 leverage, but even then, results like these are more than typical!
Is Making Money in Forex Really That Easy?
Actually, it is. Making money on the foreign exchange market is as easy as knowing in which direction a currency pair is likely to travel. See, the difficulty is not in making money itself, but in knowing how to make money. In the following chapters we’ll reveal how to know in which direction a currency pair will go, but we still have a lot more to learn about the foreign exchange market itself.
Forex Market Trading Times
Forex Market Trading Times
The foreign exchange market is the only market in the world that is open 24/7. Investors are able to place trades every single day of the week, however, most pairs will move very little on the weekends as very few investors stick around to trade.
When Various Markets Open
When one market closes, another one opens, allowing traders to trade the market 24/7. Below is a list of the various open and closing times for the Tokyo, London, and New York forex markets.
forex market open times, london, new york, tokyo
The Best Times to Trade Forex
The best times to trade the foreign exchange market is when the most traders are trading. As such, investors should look to trade when more than one major market is open. As you can see in the chart above, the Tokyo and London markets overlap for 1 hour each day, and the London and New York markets overlap for 4 hours each day. This is when the most currency is traded, as more than one location is actively buying and selling different currency pairs.
Different Times, Different Currencies
Though anyone can trade any currency regardless of their country of origin, some currencies are more often traded during certain periods of the day. During the London trading session, the US Dollar (USD), the Great British Pound (GBP), and the Euro (EUR) are the most actively traded currencies. During the Tokyo session, the Japanese Yen (JPY) grows in volume. If your broker offers sliding spreads, those that change depending on volume, your best bet is to place trades during these market times in order to pay the lowest price in spreads and maintain the highest amount of market movements.
The foreign exchange market is the only market in the world that is open 24/7. Investors are able to place trades every single day of the week, however, most pairs will move very little on the weekends as very few investors stick around to trade.
When Various Markets Open
When one market closes, another one opens, allowing traders to trade the market 24/7. Below is a list of the various open and closing times for the Tokyo, London, and New York forex markets.
forex market open times, london, new york, tokyo
The Best Times to Trade Forex
The best times to trade the foreign exchange market is when the most traders are trading. As such, investors should look to trade when more than one major market is open. As you can see in the chart above, the Tokyo and London markets overlap for 1 hour each day, and the London and New York markets overlap for 4 hours each day. This is when the most currency is traded, as more than one location is actively buying and selling different currency pairs.
Different Times, Different Currencies
Though anyone can trade any currency regardless of their country of origin, some currencies are more often traded during certain periods of the day. During the London trading session, the US Dollar (USD), the Great British Pound (GBP), and the Euro (EUR) are the most actively traded currencies. During the Tokyo session, the Japanese Yen (JPY) grows in volume. If your broker offers sliding spreads, those that change depending on volume, your best bet is to place trades during these market times in order to pay the lowest price in spreads and maintain the highest amount of market movements.
Forex Training
Forex Training
There are plenty of forex training websites today but very few are free and even less are worth reading. We hope that through our free email newsletter and forex training tools on our website that you’ll be able to learn the forex market and make money. Forex is something that can’t be learned in one day and it takes studying to become profitable. Don’t pay thousands of dollars to learn the foreign exchange market, our forex training program is free to all.
Forex Brokers
We keep a neutral stance with all forex brokers, and do not do independent reviews. However, we can make a recommendation. EarnForex allows traders to make their own judgments about brokerage firms. Check them out at: Forex Broker – Sortable list of the on-line Forex brokers, divided into 11 categories. Detailed broker descriptions, reviews and rating by the traders.
Forex Trading
Forex trading is both gratifying and profitable, encompassing elements of both the stock market and other tradeable securities. Investors interested in trading forex should be ready for a steep learning curve however, but the results from the proper training can be incredible. Learning to trade forex is not a one step process, rather it is a long term investment in both your financial future and your own forex education.
There are plenty of forex training websites today but very few are free and even less are worth reading. We hope that through our free email newsletter and forex training tools on our website that you’ll be able to learn the forex market and make money. Forex is something that can’t be learned in one day and it takes studying to become profitable. Don’t pay thousands of dollars to learn the foreign exchange market, our forex training program is free to all.
Forex Brokers
We keep a neutral stance with all forex brokers, and do not do independent reviews. However, we can make a recommendation. EarnForex allows traders to make their own judgments about brokerage firms. Check them out at: Forex Broker – Sortable list of the on-line Forex brokers, divided into 11 categories. Detailed broker descriptions, reviews and rating by the traders.
Forex Trading
Forex trading is both gratifying and profitable, encompassing elements of both the stock market and other tradeable securities. Investors interested in trading forex should be ready for a steep learning curve however, but the results from the proper training can be incredible. Learning to trade forex is not a one step process, rather it is a long term investment in both your financial future and your own forex education.
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