OnlineForex.biz

Getting Started with Online Forex

Education

OnlineForex.biz covers major events in the foreign exchange industry while also offering educational materials, reviews, and broker comparisons. It provides a wide range of articles and trading resources suitable for both beginners and advanced currency traders

Introducing the Foreign Exchange Market -The Industry & Regulatory Scheme

Forex stands for FOReign EXchange and is a 24-hour, five-day global market where world currencies are traded against each other. » More about Forex

Forex is the largest financial market in the world, with daily transaction volumes estimated to exceed $4 trillion. Major currency centers include London, New York, Tokyo, and Sydney.

🔗 More: » Liquidity Providers | » Institutional Forex

As the Forex market is a decentralized OTC market, proper brokerage regulation is a top priority for all traders and partners. Regulatory authorities oversee Forex brokers to ensure they follow legitimate business practices. They can impose heavy penalties and even revoke licenses if a firm misbehaves. This creates a strong incentive for Forex brokers to operate with ethics and transparency.

🔗 More: » More on Forex Market Regulation

The ECN Forex Network and Forex Brokerage Models

The global currency market operates through an electronic communication network called ECN. This computerized system automatically matches buy and sell orders, which is especially helpful in connecting participants across different geographic locations.

NDD & DD Brokers

Before proceeding, it’s important to understand the main brokerage models in the currency market. Brokerage firms are divided into Non-Dealing Desk (NDD) and Dealing Desk (DD) types:

NDD: Non-Dealing Desk brokers include ECN and STP brokers and provide direct access to interbank exchange rates. This means traders receive better quotes and faster order execution.
DD: Dealing Desk brokers, also known as Market Makers, create an internal market within the main market. They are generally not a good choice for intraday Forex traders.

The Forex ECN network acts as an electronic bridge connecting large liquidity providers, such as banks, with smaller market participants like retail traders. Forex brokers use this network to give clients access to the deep liquidity of the ECN market. These brokers, called ECN brokers, earn money by charging trading commissions only.

STP, or Straight-Through Processing, refers to the method of sending retail trading orders directly to liquidity providers without any dealing desk intervention. STP brokers typically offer transaction speeds between 70 and 150 milliseconds.

🔗 More: » ECN/STP Forex Brokers

Trading Strategy

Forex Educational Resources

Knowledge is power when trading the foreign exchange market. OnlineForex.biz offers a variety of educational and technical resources.

Forex Currency Pairs or else Exchange Rates

A currency pair is a quotation of two currencies (e.g., EUR/USD). The first currency listed (EUR) is the base currency, while the second (USD) is the quote currency. The most liquid pairs in the foreign exchange market include EUR/USD, GBP/USD, USD/JPY, CAD/USD, AUD/USD, EUR/GBP, EUR/JPY, and NZD/USD.

🔗 More: » Most Tradable Forex Currency Pairs

Trading Strategy and Money Management

Selecting and implementing a trading strategy is essential for every Forex trader. Forex strategies may involve various trading styles (scalping, news trading, swing, etc.) and multiple timeframes (intraday, daily, weekly, or monthly). A successful trading strategy must incorporate money management principles and reflect each trader’s risk appetite. Money management helps protect portfolios by guiding investors on how much to risk on each trade relative to their total available capital.

🔗 More: » Forex Money Management

Forex beginners

Forex trading is demanding and requires significant skills to trade successfully. The importance of preparation before starting to trade is consistently emphasized on this website. Education and preparation are the only paths to profitable trading in any financial market. You can find various educational resources for Forex beginners here:

🔗 More: » Forex Trading for Beginners | » Forex Trading Resources

The MetaTrader Platform & Automated Forex Trading

MetaTrader is a free and very popular Trading Platform The MetaTrader platform by MetaQuotes is the industry standard for Forex trading. There are two versions, MT4 and MT5, both allowing trading of Forex, CFDs, and Futures. MetaTrader meets the needs of any trader by offering features such as a full range of trading orders, complete customization, one-click trading, a built-in programming language for developing Expert Advisors, historical back-testing, depth of market (MT5), and much more.

🔗 More: » MetaTrader-4 Tips and Tricks

Forex auto-trade refers to a method where a trading system (hardware/software) automatically executes and modifies trading orders in the Forex market on behalf of a specific trading account, without any human intervention. These orders follow predefined criteria (rules) set by the system’s administrator.

🔗 More: » Compare Forex EAs | » Forex Auto-Trade Systems

Forex Trading Orders

Forex trading offers a wide range of trading orders.. 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. Forex trading offers a variety of order types, generally divided into market orders and pending orders:

A market order is an instruction to buy or sell a financial asset immediately at the current price. This type of order guarantees execution but does not guarantee the exact execution price.
Pending orders are executed at a specified market price. They can be placed in advance or after a position is opened and can be modified at any time. The main advantage of pending orders is their ability to eliminate the risk of slippage.

🔗 More: » More on Forex Trading Orders

News & Events -Covering the Foreign Exchange Market

Forex trading is popular worldwide, with thousands of providers and millions of traders. OnlineForex.biz aims to cover the main news and events in the foreign exchange market.

Forex Expos

Numerous high-profile Forex expos take place every year across the globe, from New York to Cyprus, Dubai, and Hong Kong. These events provide opportunities for retail traders and Forex companies to meet in person and discuss Forex trading. Additionally, Forex expos often offer strong educational benefits through seminars, workshops, and presentations by key industry speakers.

🔗 More: » Forex Events | » Market News

Forex Affiliate Programs

An affiliate program is a marketing system that rewards individuals for referring clients to specific businesses. These rewards typically fall into three major categories of financial incentives:

Cost Per Action: CPA → One-time payment that requires a client registration and usually the first deposit
Revenue Share: Paying commissions based on referred clients' trading volumes, these commissions are measured in pips or lots
Hybrid Method: Combining CPA and Revenue Share in one program

🔗 More: » More about Forex Affiliate Programs

Find Online Forex Reviews & Ratings

Forex Reviews

OnlineForex.Biz specializes in trading reviews for brokers and trading systems. You can read these reviews much like a business card, finding information about the company, account types, and trading environment. Additionally, Forex broker comparisons are available based on key trading factors:

🔗 More: » Compare Forex Brokers

Forex Brokers Ratings

OnlineForex.Biz has developed a unique rating formula to evaluate Forex brokers. Created by financial analyst Giorgos Protonotarios, this formula is used under license.

The rating formula incorporates various parameters, grouped into four major trading aspects:

■ Safety of Trading Funds | Trading Cost | Trading Options | Efficient Technology

Currently, OnlineForex.Biz uses the second version of the formula, though a fifth version by the same developer also exists.

🔗 More: » Rating Formula v.1.0 (OnlineForex.Biz) | » Rating Formula V.5.0 (TradingCenter.org)

□ Getting Started at Online Forex

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Forex Trading Orders

Money Management

💱 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 you give to your broker to buy or sell a financial asset on your behalf. Modern exchanges use order-driven systems to automatically match buyers and sellers.

Using trading orders properly gives you better control over your positions, reduces risk, and lowers trading costs. Since brokers may offer different order types, it’s important to choose one that provides a full range of trading orders.

Forex Trading Strategy and Risk

Money Management

♔ Forex Trading Strategy

Designing and implementing a trading strategy is essential for every Forex trader. Forex strategies can involve various trading styles (such a

Key Principles for a Successful Forex Strategy

A Forex strategy must align with your trading profile and risk appetite.
Forex strategies tend to be more effective when focused on a few currency pairs rather than the entire market.
A successful Forex strategy should be simple and clear. Overcomplicated strategies often fail over time because they are difficult to implement.
Testing a trading strategy with historical data is useful, but remember that the currency market evolves, so past success does not guarantee future results.

Basic Money Management

Always include basic money management, which means using (i) a stop-loss (either simple or trailing) and (ii) a take-profit order.
Adjust your stop-loss and take-profit levels based on key support and resistance areas and your chosen timeframe.
Use leverage wisely, keeping in mind that high leverage can be disastrous, especially for beginners. Remember, leverage increases both your risk and trading costs.
Evaluate your trading strategy’s performance over the long term, avoiding overreaction to short-term gains or losses.

Portfolio Management

Money Management

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

📊 Money Management

This article presents three basic investment concepts along with key 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 an investor can earn without taking any market risk. It is typically calculated based on the annualized interest from holding a three-month treasury bill. Any investment offering returns below this guaranteed rate is considered unacceptable.

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

(ii) Standard Deviation

Standard deviation (SD) is a statistical measure estimating the amount of variation in a set of values. A low standard deviation indicates values close to the mean (expected value), while a high standard deviation shows larger variations from the mean.

Why is a low standard deviation important for a portfolio? Because it ensures that the portfolio’s positive performance is consistent over time and more likely to be repeated in the future.

Most Tradable Forex Currency Pairs

Resources

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

■ There are 8 major currencies: United States Dollar (USD), Euro (EUR), Japanese Yen (JPY), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), Australian Dollar (AUD), and New Zealand Dollar (NZD).

■ There are also 7 major currency pairs, known as the ‘Majors,’ which pair the US Dollar against EUR, JPY, GBP, CHF, CAD, AUD, and NZD.

These are some of the most actively traded Forex currency pairs.