Forex Education

OnlineForex.biz

Getting Started at Online Forex

OnlineForex.biz covers major news and events in this Foreign Exchange industry. In addition, you can find educational material, reviews, and comparisons regarding the online Forex market. There is a wide variety of articles and trading analysis for beginners and advanced currency traders.

MiFID is the European Markets in Financial Instruments Directive (Directive 2004/39/EC)Introducing the Foreign Exchange Market

Forex means FOReign EXchange and it is a 24/5 global market where world currencies are traded one against the other. Forex is the largest financial market in the world, as the daily volume of transactions is estimated to exceed $4 trillion.

■ The most significant Forex centers include London, New York, Tokyo, and Sydney

More: » The Forex Industry | » Regulation  | » Forex Partners

  • Forex Currency Pairs

A currency pair or else an exchange rate is a quotation of two different currencies (i.e. EURUSD). The first listed currency of a currency pair (i.e. EUR) is called the base currency, and the second currency is called the quote currency (i.e. USD).

The most liquid pairs in the Foreign Exchange Market are: EURUSD, GBPUSD, USDJPY, CADUSD, AUDUSD, EURGBP, EURJPY, and NZD/USD

  • ECN & STP Forex Trading

ECN means Electronic Communication Network and it is an electronic bridge connecting large liquidity providers (i.e. banks) with smaller market participants (i.e. retail traders). This connection works through an ECN Forex Broker who charges trading commissions for offering access to the ECN market. STP means Straight-Through Processing and refers to the method of transferring retail trading orders straight to liquidity providers, without any dealing desk intervention. STP Forex brokers usually offer a transaction speed between 70 and 150 milliseconds.

■ NDD Brokers: They include ECN/STP brokers and provide direct access to interbank rates. That means traders get a better quotation and faster order-execution

■ DD Brokers: They are known as Market Makers and they build an internal market following the ECN market. Not a good choice for intraday Forex traders

» ECN/STP Forex Brokers 


Find News & Events -Covering the Vast Foreign Exchange Market

Find Forex Expos..Forex trading is quite popular around the globe, and this means there are thousands of providers and millions of traders. OnlineForex.biz aimd to cover the main news and events in the Foreign Exchange market.

  • Forex Expos

There is a great number of high-class Forex expos happening every year. These expos are held all over the world, from New York to Cyprus, Dubai, and Hong Kong. During these events, retail traders and Forex companies have the chance to meet in person and discuss Forex trading. Moreover, Forex expos usually offer a strong educational incentive by offering seminars and workshops, and by hosting important spokesmen.

» Forex Events | » Market News


Find Online Forex Reviews & Ratings

OnlineForex.Biz is specialized in trading reviews, and that includes Forex brokers and trading systems. You may read these reviews like reading a business card. More specifically, you may find:

■ Company info | Trading info | Account Info

In addition, you can find Forex Brokers comparisons based on certain important trading aspects:

» Compare Forex Brokers | » Compare Forex EAs

Forex Trading Orders

The Full Set of Forex Trading Orders

Forex trading offers a wide range of trading orders..

  • What is a Trading Order?

A trading order is an instruction to your broker to buy or sell a financial asset on your behalf. The order-driven system in all modern exchanges automatically matches buyers and sellers.

The proper use of a trading order adds control to your positions and significantly reduces risk and trading costs. Different brokers may offer different sets of trading orders, and therefore, when choosing a broker, you must ensure that the full range of trading orders is available.

Market and Pending Orders

Generally, trading orders are divided into market orders and pending orders.

  • What is a market order?

A market order is an order to buy or sell a financial asset immediately, at any given price. This order type guarantees execution but does not guarantee the execution price.

  • What is a pending order?

Pending orders are executed at a pre-specified market price. A pending order can be placed in advance, or afterward, a position is opened, it can also be modified at any time. The great advantage of a pending order is that eliminates the risk of slippage. 

  • What is Slippage?

Slippage refers to the difference between the price expected and the price at which the order is actually filled.

Forex Trading Strategy and Risk

 Forex Trading Strategy

Designing and implementing a trading strategy is essential for every Forex trader. Forex strategies may involve several trading styles (scalping, news-trading, swing, etc.) and multiple timeframes {intraday, daily, weekly, or monthly}.

 

Key Principles for a Successful Forex Strategy

1. A Forex strategy must be compatible with your trading profile and your appetite for risk

2. Forex strategies will prove more efficient when they focus on a couple of Forex assets than when they cover the whole currency market

3. A successful Forex strategy must keep things simple and clear. Overcomplicated strategies tend to fail in the long run as they are very difficult to implement

4. Testing a trading strategy using historical data is a logical step, but keep in mind, the currency market is evolving so past data success is not a promise for future success

Basic Money Management

5. Incorporate always some basic Money Management, and that means (i) a stop-loss (simple or trailing stop) and an (ii) take-profit order

6. Adjust your stop-loss and take-profit according to the major support and resistance levels, and your timeframe

7. Leverage your funds wisely and keep in mind that high leverage can be catastrophic, especially for beginners. Don't forget that trading leverage increases your risk but also your trading cost

8. Evaluate the results of your trading strategy in the long run and don’t get too enthusiastic/disappointed based on short-term results

 

Portfolio Management

This article presents three basic investment concepts and a series of significant portfolio management ratios...This article presents three basic investment concepts and a series of significant portfolio management ratios.

 

Three Basic Investment Concepts

  • risk-free rate
  • standard deviation
  • max drawdown

(i) Risk-Free Rate

The 'Risk-Free Rate' refers to the annual return that an investor can secure without taking any market risk. Usually the 'Risk-Free Rate' is calculated based on the annualized interest paid by holding a three (3) month treasury bill. Any investment offering lower returns than this guaranteed rate is considered an unacceptable investment.

  • In the EU, the 3-month Euribor is used
  • In the USA, the 3-month US Treasury bill

Free Forex Trading Tools

Foreign Exchange Trading ToolsCurrency Trading Tools

There are many free Forex trading tools designed to improve the performance of currency traders. These are some useful online Forex tools.

FOREX MARKET SENTIMENT

The market sentiment tool shows how many traders have taken a particular position in a currency pair. The market sentiment highlights the crowd behavior.

Dukascopy SWFX Sentiment

COMMITMENTS OF TRADERS REPORT

The Commitments of Traders (CFTC) is a weekly report presenting the net non-commercial (speculative) positioning in the US Forex futures market. The report can highlight the change in the positions of the 'smart money'. The COT report is released every Friday at 3:30 pm (EST time) and shows the positions for the prior Tuesday.

► More about Commitments of Traders on TradingCenter

CME Group COT |Scotia Bank Report

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