Forex Tips and Advice

The Internet is one of the most useful tools that you can take advantage of today. With the advancement of communications technology, you can send and receive data to and from the Internet for free or at a very cheap price.

Since the development of the Internet and introduction to the public, people have been using it to communicate with family and friends. With the Internet, you can chat for free even though the person you are talking to is half way around the world.

Today, because of the advancement of the Internet, and the availability of a cheap broadband Internet connection, it is now possible for people to start an online business, work online, and even trade in the financial market.

Trading in the financial market online has a lot of advantages. You no longer need to be inside the market floor to trade. All you need is a computer with a high-speed Internet connection, and trading software and you’re ready. If you are thinking of trading in the financial market, you might want to consider trading in Forex.

In the past, because the Internet was still in its infancy and the Forex market have strict sanctions and policies, regular people, such as yourself were not allowed to trade in the Forex market. Only multinational companies and financial institutions were allowed and it also required huge amounts of investment capital to start trading in this financial market.

The Forex market is the largest and the most liquid financial market in the world. It operates 24 hours a day and generates currency exchanges that amount up to 2 trillion dollars each day. With this kind of feature, people would really want to trade in the Forex market.

With the advancement in the Internet technology, it is now possible for people to trade in the Forex market. The Forex market also opened up its doors to individual traders and brokers.

Forex trading is considered to be a great money making tool that you can take advantage of. With the right skills and knowledge, you can really be successful in the Forex market and earn that money you have always wanted.

It is also a fact that many people who have traded in the Forex market have earned quite a lot of profits. Some even considered it to be a great full time career and decided to leave their regular jobs to trade fulltime in the Forex market.

However, the Forex market also carries an equal risk to traders. There is also a chance for you to lose money when you trade in Forex. It is also a fact that Forex took people in the brink of financial collapse. However, with the right skills, knowledge and strategy, you can minimize the risk and maximize your earning potential when you trade in this very liquid market.

If you are looking for a great fulltime career that you can do in your own home, you can consider the Forex market as one of the best career choices.

The first thing you need to have in order to start trading in the Forex market online is by having a fast computer with a fast internet connection. Fast Internet connection is very necessary in order to let you have access to real time information on what is happening in the market. This will also prevent slippage.

The next thing you need to do is hire a firm that is available online that specializes on Forex trading. The online Forex trading firm will give you access on using their online software that is necessary for you to start trading. For inexperienced Forex traders, it is recommended that you hire a firm in order to have first-hand knowledge on how to trade currency, and also help guide you on your trades.

If you don’t want to hire a firm, there are a lot of software programs in the market that you can use to start trading in the Forex market. The most important thing you have to consider in a trading software program is that it should allow you to gain access to the Forex market instantly. It should also give you the tools you need, such as charts and other indicators that are necessary for you to trade effectively.

Software programs are recommended for experienced traders who don’t want to spend money on Forex trading firms.

These are some of the things you should consider when trading in the world’s largest financial market online. Always remember that there are no guarantees in Forex. You should be prepared to lose money during your first few months of trading. Once you completely understand how Forex works, you can be sure that you can earn a lot of money in no time at all.

Forex trading is one of the growing markets for making money in today’s world economy. If you are part of the forex trading game, you need well thought out and planned strategies. You also need up to the minute information and reliable data to help you along the way. With this said, in order to be successful at forex, you’ll want to invest in high quality products to help you analyze, watch and track the forex market. No little project at all. The good news to you is that there are options out there to help you do just that.

First of all, realize that forex trading is an excellent market to trade in. It has the ability to make you money without a whole lot of investing. And, you can trade with whatever you have, not necessarily millions of dollars. To get into the forex market, it makes sense to pay attention to the numbers for some time. Then, you’ll have a good feel for it long before your dollars are involved.

But, once you do get in, you’ll need up to the minute information. Consider the purchase of and use of valuable forex trading software programs. These programs can help you to track what is happening and in some, it will help you to better analyze the information as well. Of course, this in turn will help you to make the right decisions about your investments.

While market trading is always risky, many find that forex trading, when done right, is one of the most profitable without much start up investment opportunities out there. With the ability that you have to monitor and respond virtually instantly to the world’s market in forex, you are better able to make the right decisions which will then lead to those gains you are seeking.

Have you ever wondered how the Forex market works? Are you curious about becoming a trader, but don’t know how to get started? Well, believe it or not, it’s very easy and you don’t even need any money to get started. Let me introduce you to the world of currency trading.

Forex, or foreign currency exchange, trading can be broken down into several key elements. These include a market, your broker, your broker’s trading software, and yourself. In short, you will make decisions, enter them into trading software, and watch the results. It isn’t necessary for you to know very much else about your broker at this point.

However, the most important thing to know about your broker is that any money you deposit in your account is protected. Find out where each broker you are considering is located and see if they are required to work with local regulatory agencies. Honestly, the best way to scope out brokers is to find a trading forum and ask others for advice.

Once you have found some candidate brokers that meet your trust and regulatory requirements, then it is time to dig a little deeper. Two things you will want to consider are the features found in their trading software and the cost of entering a trade. Simply download their software, generally referred to as a platform, and start trading with a faux money game account.

The cost of entering a trade is known as the pip spread. Without getting technical, the difference between the market buy price and the market sell price is the spread, expressed in points or pips. The larger this spread then the more the market has to move in your favor for you to make a profit. However, it is certainly appropriate to accept a slightly higher pip spread if you find a broker or trading platform that you really like.

Let me summarize this to show you how simple it really is. Find a broker. Download their trading platform. Open up a free game account. Buy and sell currency pairs in order to get familiar with market movements and your trading platform. Continue using a game account for several months until you have witnessed a wide variety of market activities.

That’s it. Now, once you’ve started trading in a game account, it is time to start visiting some online trading forums and reading everything you can. You’ll want to learn about charting, fundamental and technical analysis, stops, limits and plenty of other arcane terms that are actually very simple to learn once you are actively involved in trading.

Finally, don’t worry about whether or not you have chosen the best broker, because you’ll have plenty of time to move to another. In fact, by the time you are ready to graduate to a live account, you will surely know whether or not your broker’s platform offers all of the charting or trading capabilities that you desire. Now, get out there and start trading.

Trading in financial institutions is one of the best ways to earn money. It is also one of the most promising career choices that people make today. With the opportunity to earn a lot of money, more and more people who are interested in trading in the financial institution have left their jobs to get a piece of the action in the financial market.

Today, the Forex market is the best choice for people who are considering making a career out of trading in the financial market. Besides, who wouldn’t want to trade in the largest and the most liquid market in the planet which involves all the countries in the world?

The Forex market operates 24 hours a day with currency exchanges that can go as high as 2 trillion dollars each trading day. Also, it is the most liquid market in the world which also means that traders can enter the market anytime they want and get their profits easily.

In the past, Forex was limited to large financial institutions and multinational companies. Only banks, central banks and large companies were allowed to participate in the Forex market. However, thanks to modern communications technology and high speed internet and decreased sanctions in the Forex market, ordinary people can now trade and participate in the world’s largest financial market.

Because the Forex market is now open to everyone and because it is a very profitable industry, online Forex brokerage firms began improving their services and accessibility. They now also designed different trading platforms suitable for different Forex traders. Not only has online Forex brokerage firms made their trading platforms accessible, they also began and still continuing to improve their software.

They also allow people to register with a Mini Forex account that can let them trade with a minimum margin of 100 dollars only or even less.

If you are interested in joining the Forex market, you only have to have a few things to get you started.

First, you need a computer with a high-speed internet connection. The high-speed internet connection is very important for an effective trade to work. It will also minimize the risk of slippages that can cause you to lose money. So, if your area doesn’t have any high-speed internet connection available, you should forget about trading in the Forex market online. This will only make you lose a lot of money.

Second, you need to choose which Forex brokerage company you should hire. These companies will provide you with the Forex trading platform that you can easily download and install in your computer. The Forex trading platform is simply a software program that is essential for an online Forex trader.

It is important for you to choose a trading platform that you are comfortable using. You should also make sure that the trading platform you choose provides accurate and up to date real time information, security, and stability.

It is also recommended that the trading platform you choose should provide information on at least 16 currency pairs, execute orders with just a click of the mouse, have charting tools to perform technical analysis, and should also have a recording feature that will store your trading history.

With all these features, you can really improve the way you trade in the Forex market and also minimize the risk of losing money.

Look for a Forex trading platform that is simple to use and easy to understand. If you wish to know more about the Forex trading platform that a Forex trading brokerage firm offers, you can consider opening a dummy or practice account. By doing this, you will never risk real money on trades while learning the ropes.

You will also get hands on experience on the Forex trading platform and really determine if the platform is for you or not.

Risk management is also a very important feature that you should look for. If it takes too long to select a risk management order, you should consider looking for another Forex trading platform.

These are some of the things you should look for in a Forex trading platform. With a little practice in the dummy account, you can be sure that you can get the hang of it in no time at all and start making money through online Forex trading with a reliable Forex trading platform.

Test-driving an online forex demo account is the preferred method of potential traders to minimize risk.  A demo account readily allows a cautious person to go online and observe exactly how a paid account would work. Think of it like playing the popular wargame Command and Conquer: you send in the troops (gobs of fictitious money), make a few tactical maneuvers (invest in speculative exchanges) and conquer territories (reap profit).

It can be addictive. Without investing and risking any real money, the investor plays with ghost money in an account and initiates buys and sells the same way it would be done in reality. The software used for these demo accounts parallels what the real trading platform does. Real figures are pulled from exchanges, trend charts are generated, and profits are calculated from buy/sell maneuvers., A trader sees at the end of the day the net loss or gain should real money had been used in the transactions.

Even a novice can trade. Let’s assume an investor pretends to open a margin account with ten thousand dollars. He watches trends in the currency markets and believes that the dollar will go up in value against the British pound. The demo software empowers him to purchase at a ten to one margin; he then authorizes a buy of one hundred thousand dollars of dollars and sells one hundred thousand dollars of Pounds. There will be a spread, or difference, which accumulates to the gains, or “profit”.

Why invest time with demo accounts? Simple. It’s safe to learn the currency trade without having real money to lose.

Think of it like crashing your car in driving simulators or doing crazy rolls in an F-14 – on a Playstation. You stretch your creativity, test your reflexes and build your skills all behind the safety of a highly immersive computer screen. Your mind gets a full reflex workout without incurring damage to property and incurring lawsuits!

The same holds true for forex trading. Spending time with a demo account allows the potential trader to gain skills and learn the ins and outs of the game and the market place. A person is then able to see if they truly have the instincts necessary for the market and have sufficient knowledge to “play with the big boys.”

Almost all online companies involved in forex trading offer demo accounts, sometimes free and sometimes for a small fee. Even if a fee is paid, it is usually worth it because a forex trader can flex his skills and knowledge for vast profits after spending some time practicing with the forex demo software.

Setting up a demo account requires nothing more than a valid email address and your name. Upon activation, you will have access to the usual charts, graphs, ordering system and even prediction tools. The latter are quite interesting, particularly predictive implements based on Fibonnacci… but take care that such tools can never predict swings in the market. Too many social, political and environmental variables cause erratic fluctuations and no software can ever take those into consideration.

Richard Peyton, my good friend,  benefited from a forex demo account. After months of study of the forex market, Jackson was convinced that he could make a go of it as a day trader in the forex market. His girlfriend, however wasn’t convinced and feared the inherent risk. She considered forex nothing more than sophisticated gambling.

Richard went to a brokerage company online that he felt held good reputation. He set up a demo forex account and began to make trades as though he were using real money. After several days, on paper, Richard garnered consistent profit. He continued learning and his confidence increased that he grew anxious to open a real forex account and invest a percentage of disposable income. His girlfriend also saw how on paper he had made a nice profit and relaxed, withdrew her objections.

Today Richard and his family do very well financially through forex trading, With a demo account, he leapt into a world of vast financial potential and built a fortune. He retired his day job.

Today’s modern world offers a lot of convenience for people. There have been great changes which brought about many inventions and critical lifestyle changes for most people around the globe.

Life was quite simpler before, many people engaged in trading were able to trade goods and/or services within a specific location. After a while, when it was already possible to travel on the seas, trading was done from different places. Today, almost everyone is engaged in a certain trade, for him or her to be able to live a normal life able to get all their needs.

These days, people who have no work, or does not earn any income whatsoever goes hungry. If you have no money, then you can’t buy food, shelter, clothes, and other necessities. We live in a modern world which requires people to be effective and hard working individuals.

Perhaps the most popular of all trades is the so-called forex trading. You probably have heard of it already. In this type of financial market, currencies are traded. Yes, currencies; and did you know that you can really earn a lot from this kind of trading?

Before the internet was even introduced into the global market, forex trading was only for big corporations, the rich ones or the elite. Most large organizations also take part in this trade. But now, things are different. Because of the help of the internet, people from around the globe can actually do forex trading, whether you’re rich or middle class.

If you have an internet connection at home, then you can do your trading there. If you want to be part of the online forex trading, it is best if you can secure an effective system which you can use in your trade. If you have a system, you can now generate signals.

Automatic trading signals will help you a lot in spotting opportunities in the forex market. These opportunities may just be the ones that you’ve been waiting for to hit it big in the market.

You can also get trading signals from the daily newspaper, radio, television, and online forums. But there are times when these signals are somewhat biased. There is therefore a need for unbiased automatic trading signals.

To be able to get automatic trading signals, the first thing that you should accomplish is choosing the best and the right system. There are many systems available on the net. In case you don’t know yet, a system is a method, software, or course that is designed especially by forex trading experts.

These systems are not offered free, however, you can avail of trial versions available on the internet. Before purchasing any system, make sure that you have chosen the best one. It is wise to stick with systems that have been in existence for a couple of years and have established a reputable name in the business. This way, you can stay away from individuals who just want to fool you into buying a system that does not really work.

With a little research, and participation in discussions online, you may be able to get a good idea on which system will work best for you.

Once you’ve chosen the system, you need to subscribe for automatic trading alerts. After you’ve made a subscription, you can now receive live alerts which you can use in your currency trading.

These automatic trading signals provide alerts about entry and/or exit points for the different major currencies (in pair) for example the US dollar and Japanese Yen or the Euro and US dollars.

These alerts are all provided in real time, making possible for you to tap into your forex trading all day long, and all throughout the week.

Each time an opportunity turns up; you will receive an instant automatic trading signal. You can receive the signals through your email. But if you are a busy person, who needs to go out more often and carries a cellular phone with you, you can receive the alert on your phone, and most providers makes no extra charges.

Usually, most providers offer added features on their automatic trading signals, like the one mentioned about receiving alerts on your cell phones, to stay competitive in the market.

Automatic trading alerts can really help you a lot in making decisions pertaining to forex trading.

The forex market, also known as the foreign currency exchange market, has been around for quite some time. The reason it has become only recently popular is because once upon a time only the financial elite had enough assets and access to the foreign currency exchange market. Only major corporations, banks and opulent individuals who possessed great wealth were allowed entrance into these chambers of currency commerce. Alas, the world has evolved and a new entity has come into existence and altered the human way of life. Technology. The greatest invention being the Internet. Now time and space have practically lapsed and we have the ability to contact anyone, anywhere, at anytime. This makes the world quite different from what it used to be.

Today any individual can open up an online forex account and begin trading. He needs no qualifications, no justifications, just a suffice bank account. One can open up an online forex trading account for as little as $5000. That’s incredible. Whereas the New York stock exchange is centered in New York and has specific trading hours, the forex market is global and not tied down to a specific location. An investor may conduct trades from wherever he is on earth, no matter what the local time is. The forex trading day actually commences in Sydney, Australia. From there it progresses gradually east, sweeping through financial centers like a ghost of finest velvet. Barely tangible yet so lucrative. The average daily turnover in the forex trading market is $2 trillion US dollars. To be part of something that is so fantastic must be great, no?

Surely you have already begun to fantasize about the luscious millions you will earn overnight. Thought this is technically possible and there have been quite a few accounts of individuals who have earned great sums in the span of just twenty four hours, one still needs to take the proper precautions when investing money in such a volatile market. As high as the profit is, so is the risk. That’s why it’s not enough just to know about stocks, bonds and trading strategies. You need an in depth education.

First of all, you need to know basics. Forex trading is an automated system and so you must realize that most of the things you’ll have to learn will be part of a much greater system of signals and signs. The most basic and primary thing you should be aware of is that you buy and sell currencies, at the same time. Meaning, as you buy one currency, you are selling another. Furthermore, you attempt to purchase a currency when it’s value is low and sell a currency when it’s value is high. So far, so good.

Next you need to learn the terminology and currency pairs. You will find them listed in a different chapter on this website and they are explained in layman’s terms so that anybody can understand them.

There are so many websites and online tutorials that teach about forex trading. There are also tons of college or university classes that really teach everything you need to know. If you are serious about becoming a forex trader and understanding the automated forex system, you will have to study hard and open your mind to learning.

After abstract theories and learning the nooks, you will be advised to practice forex trading on a ‘dummy’ account. Trying to become a forex trader without this practice would be like trying to become a lifeguard without ever learning how to swim. It would never work.

The reason there are so many options for ‘dummy’ forex accounts is simple. It’s because any experienced forex trader or broker know that entering the forex trading system, especially the automated forex trading system, is not an easy task if you’ve never actually done a trade. You would not want to open up a real trading account and spend real money without having any clue how to do so. That’s why there are so many options for these ‘fake’ accounts and you should put them to good use.

After you feel you’ve experienced enough fake trading and demos, you need to decide what sort of automated system you would like to use for your trading purposes. The reason you need a system is because you need constant updates about currency values and alerts for trades you would like to conduct. Automated systems allow you to conduct several transactions at one time through creating different trading platforms. The system you choose will present you with the required charts that express the market trends that have happened within a certain time frame. That’s why you need to know not only how to read charts and understand how to manipulate them, but also which type of automated system will serve your trading needs best.

Forex is considered as a financial system on the foreign exchange. It allows the trader to purchase foreign stocks or currencies. The forex trading system is popularly increasing in the internet in leaps and bounds each day. It provides useful information about the companies wherever it is located. The traders stay informed so that they can make a wise decision when purchasing and investing their money. Several forex trading systems are allowing the traders to make withdrawals, online inquiries and purchases so that they can create additional wealth by using their invested money.

Forex trading systems involves money investments from a company which is located overseas. Learning more information regarding the company is helpful because you can obtain the latest available programs and processes. You can also double or triple your invested money within a short period of time. You can avail of the forex trading system that only requires a small amount of investment, as low as 5 dollars, while other forex trading system can require a large sum of money to be invested, as high as 500 dollars. Remember, one forex trading system is different from another forex trading system. Each has its own terms regarding the duration period of your investments.

If you are wondering how long your money will remain invested, then you must carefully read the company’s fine prints where you are investing your money. Some company may require a 48-hour investment while others may require a 30-day turn around time.  Always read the information being provided. It will explain your current money status upon investing it and its future outcome.

Forex trading systems allows the trader to purchase companies, stocks, or other country’s investments. It does not matter where you live since forex trading systems are also located in any parts of the world, as well as the company where you are investing your money. The traders can invest their money in companies located in China, Japan, United States, Russia, Germany, Africa, and other countries which are recipients of the investments on forex trading systems. It does not necessarily mean that you have to be living in the country where you are planning to invest. This is the secret of the forex trading system. Your personal wealth and personal preferences can be enhanced while investing.

This is also the major reason why forex trading systems are well known. It can really make extra money by investing the cash since forex trading is about putting the money on another currency either for a short or long term period in order to earn bigger sum of money. Most forex trading systems are typically based on how stock exchange works. You will find out that forex trading systems can permit currency rate investments, currency change from one country to another, and investment from a foreign company. Hence, forex trading systems are built upon global investors, global companies, and global currencies.

Remember, there is no difference between online and offline forex trading systems with regards to the projected results. However, online forex trading systems can quickly access your money. The traders can move, invest, remove, and trade their money faster compared to offline forex trading systems.

Somehow, it could bring wealth to the investors who are willing to invest and trust the brokers when making additional decisions. But the question is who you are going to trust. It is advisable and helpful in any kind of trading systems or company investments to trust the person whom you are transacting with. It is a wrong company if you cannot reach the representatives on forex trading systems either by fax, email, phone, or even in person. A company which utilizes forex trading systems and offers opportunities to the traders to worldwide investments is good. However, they should communicate with the traders any time during business days.

Moreover, it is advisable to look for a company that uses forex trading system that puts your invested money first and foremost, how you are going to invest it, and listen to the things you wanted to do. If a forex trading company is just calling you at all times and giving you little space for decision making, then avoid doing business with them. Remember, this company should realized that being the end user and consumer of their forex trading systems, they should listen to you and learn about your plans regarding with investing your money before making the investment.

As the popularity of Forex increases so do the number of scam artists attempting to cash in on the Forex gravy train. Since Forex involves trading money internationally, often over the Internet, a whole new breed of scams have come about. Ironically many of these scam artists are finding their marks through newspaper, television or other print media advertisements.

While these scams are generally easily spotted by experienced traders, new speculators may have problems knowing the difference between what is real and what isn’t. It is absolutely essential to thoroughly research Forex trading, and any potential companies you may trade with before making an initial investment. The last thing you need is to find out that the company you have invested with is under investigation by the SEC for fraud. In this type of circumstance it can often be impossible to retrieve your money as the claims from all fraud of participants will be higher than the total payouts the government can guarantee.

One way to spot a scam on Forex is when someone promoting a Forex system guarantees no risk. It is a fact that there is risk with Forx trading, and generally anyone who claims otherwise is a liar, or more likely a criminal. Trading in Forex successfully requires knowledge, discipline, and a trading strategy. But there is no magic software or no risk way to assure that you will make money.

Another red flag indicating a sure sign of a Forex scam is a web site that guarantees profits. Nobody can guarantee profits and Forex trading. It is up to you as an investor to perform. If it were possible to guarantee profits in Forex trading then nobody would need to start a business showing others how to make guaranteed profits. The profit potential for anyone who could guarantee profits would be so enormous in Forex trading, that they would quickly become a billionaire by trades. So why would they waste time teaching others?

Another common tactic of Forex scam artists is to promise employment opportunities for people using their system. This is usually a trick to get you to spend your money with them. They are fishing for people with capital who can fund their enterprise. They typically promise to offer firm money to people using their system. But why would they do this? Instead what happens is they lure people into their training systems and convince people that they have done so well in the training session that they should start using their real money in order to make a fortune.

All reputable Forex trading web sites will be a member of the CFTC or the NFA. Make sure to check the company’s claims out and assure that they are members of one of these organizations before dealing with them.

Keep in mind that Forex is a relatively unregulated system of exchanging money. In many cases Forex scams can become highly technical, involving brokers manipulating prices in ways that cannot be tracked by the average trader. Because of this is essential that you not become a mark for such brokers.

In the United States the CFTC is the federal agency responsible for regulating the trade of Forex currency. If you suspect that you have been a victim of some type of fraud contact the CFTC. They have jurisdiction for investigating and enforcing the laws.

Learning the basic skills in forex, such as how to read forex charts, is really important.

This is because once you have this vital skill under your belt, it will be a lot easier and quicker when the time comes for you to learn and practice an actual forex trading system.

By the time you finish this article, you’ll learn how to read forex charts, as well as know the pitfalls that can occur when reading them, especially if you haven’t traded forex before.

Firstly, let’s revise the basics of a forex trading as this relates directly to how to reade forex charts.

Each currency pair is always quoted in the same way. For example, the EURUSD currency pair is always as EURUSD, with the EUR being the base currency, and the USD being the terms currency, not the other way round with the USD first. Therefore if the chart of the EURUSD shows that the current price is fluctuating around 1.2155, this means that 1 EURO will buy around 1.2155 US dollars.

And your trade size (face value) is the amount of base currency that you’re trading. In this example, if you want to buy 100 000 EURUSD, you’re buying 100 000 EUROs.

Now let’s have a look at the 5 important steps on how to read a forex chart:

1. If you buy the currency pair, that is, you’re long the position, realise that you’re looking for the chart of that currency pair to go up, to make a profit on the trade. That is, you want the base currency to strengthen against the terms currency.

On the other hand if you sell the currency pair to short the position, then you’re looking for the chart of that currency pair to go down, to make a profit. That is, you want the base currency to weaken against the terms currency.

Pretty simple so far.

2. Always check the time frame displayed. Many trading systems will use multiple time frames to determine the entry of a trade. For example, a system may use a 4 hour and a 30 minute chart to determine the overall trend of the currency pair by using indicators such as MACD, momentum, or support and resistance lines, and then a 5 minute chart to look for a rise from a temporary dip to determine the actual entry.

So ensure that the chart you’re looking at has the correct time frame for your analysis. The best way to do this is to set up your charts with the correct time frames and indicators on them for the system you’re trading, and to save and reuse this layout.

3. On most forex charts, it is the BID price rather than the ask price that’s displayed on the chart. Remember that a price is always quoted with a bid and an ask (or offer). For example, the current price of EURUSD may be 1.2055 bid and 1.2058 ask (or offer). When you buy, you buy at the ask, which is the higher of the 2 prices in the spread, and when you sell, you sell at the bid, which is the lower of the two prices.

If you use the chart price to determine an entry or exit, realise that when you place an order to sell when the chart price is say 1.330, then this is the price that you’ll sell at assuming no slippage.

If on the other hand, you place an order to buy when the chart price is the same price, then you’ll actually buy at 1.3333. A forex system will often determine whether your orders will be placed simply according to the chart price or whether you need to add a buffer when buying or selling.

Also note that on many platforms, when you’re placing stop orders (to buy if the price rises above a certain price, or sell when the price falls below a certain price) you can select either “stop if bid” or “stop if offered”.

4. Realise that the times shown on the bottom of forex charts are set to the particular time zone that the forex provider’s charts are set to, be it GMT, New York time, or other time zones.

It’s handy to have a world clock available on your computer desktop in order to convert the different time zones. This is important when you’re trading major economic announcements.

You’ll need to convert the time of an announcement to your local time, and the chart time, so you’ll know when the announcement is going to happen, and therefore when you need to trade.

5. Finally, check whether the times on your forex charts corresponds to when the candle opens or when the candle closes. Your charting software may be different to someone else’s in this way.

The reason I mention this, is that if you need to trade major economic announcements, either by entering a trade based on the movements that happen after the announcement, or to exit a trade before the announcement in avoid getting stopped out during it, then you need to be precise (to the minute!) as these trades are performed according to what happens at the 1 minute immediately after the announcement, not the candle afterwards!

So there you have it.

You now have the 5 essential keys to how to properly read forex charts, which will help you to avoid the common mistakes which many forex beginners make when looking at charts, and which will speed up your progress when you’re looking at forex charting packages, and forex trading systems that you want to trade!

Now that you know this, practice looking at forex charts with each of these 5 points in mind.

So get to it!