Forex Brokers Accepting US Clients

Forex Brokers That Accept US Clients 2019

Would you be surprised if I tell you that there are only a handful of off-shore forex brokers that accept US clients? The country with the biggest economy in the World, the leading advocate of the free market economy and the one that houses Wall Street, is really strict and careful when it comes to the derivatives markets, especially investing in leveraged foreign exchange.

Glad that I am not US citizen or residing there. Mind that the law applies not only to US citizens but also to residents. This means that you could be a non-US citizen but you will still have restrictions if you are a legal resident in the US.

wdt_ID Logo Broker Open Account
1 Forex.com
2 AAFX Trading
3 FXChoice

Why don’t many brokers accept US traders?

It has all started with Great Financial Crisis (GFC), guys. Those of you who have watched the documentary Inside Job or the movie Big Short already got an idea on what I am going to say about strict rules in the US about leveraged investment. Brokers with a passion for big profit have created exotic investment products that promise very high returns for the clients. The clients are not aware of the risk that they are taking by buying those derivative products due to the their complexity.

After the big US banks went bust at the height of the financial crisis in 2008 – 2009, watchdogs like CFTC, SEC and NFA decided to tighten the screws in financial sector as a solution to moral hazard problem. Leveraged products got its lion share on these new stricter financial rules and forex was one of those scapegoats.

Thanks to those stricter rules, the leverage is lower compared to other jurisdictions and required capital to operate in the USD is much higher compared to its peers. Thus profit prospects are not that attractive and we don’t see a lot of forex brokers based in the USD.

Forex Brokers that Accept Clients From US

These are the forex brokers that accepts clients who reside in the US; Forex.com is the first one in my list while AAFX Trading follows as second and FxChoice as the third. The ranking depends on several important criteria for forex traders such as regulation, reliability, customer service, trading conditions, deposit & withdrawal methods, bonus and promotions.

FOREX.COM

Forex.com is one of the few forex brokers that accept clients from the US. The brand is owned and operated by an industry giant; GAIN Capital Holdings who has been around for more than 20 years. The important point is that Forex.com is headquartered and regulated by CFTC and NFA in the US which means that Forex.com is not an off-shore entity. I would recommend Forex.com for all my followers who are residents of the US. It is a reliable and customer oriented forex broker. If safety of your funds and reliability is your primary concern, then Forex.com is the best answer between the three forex brokers that accepts clients from the US.

Forex.com Account Types

Forex.com offers two different account types; Standard Account and ECN Account. Spreads goes as low as 1.0 pips for EURUSD on Standard Account which is very competitive compared to industry standards. Minimum initial deposit required for Standard Account is zero which means that you can open an account and verify it without depositing any funds. The Broker also offers ECN like account on their exclusive trading platform called Advanced Trading Platform.

Forex.com Customer Support

Forex.com provides customer support in four languages; English, Spanish, Italian, Arabic. Live Chat is prompt to answer your questions and very informative. There is customer support for 24 hours. The Broker offers extensive market analysis and educational material on their web site.

Forex.com Trading Platforms

Forex.com offers its own exclusive trading platform called Advanced Trading Platform in addition to conventional MetaTrader 4. So, clients are given chance to choose between those two trading platforms. Advanced Trading Platform comes with a highly customizable dashboard and trade preferences, useful charting tools, more than 80 technical indicators, extensive drawing tools and integrated trading strategies with hundreds of predefined templates to choose from.

Forex.com Withdrawal and Deposit Methods

Investors can deposit and withdraw funds by credit card, bank card and wire transfer. Digital wallets such as Neteller, Skrill, Sofort are not available for the moment.

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AAFX Trading

AAFX is also among those rare forex brokers accepting clients from the US. It is headquartered in Saint Vincent and the Grenadines and regulated by SVG FSA. The company is founded in 2013, so passes one of my criteria of being a reliable forex broker. Negative balance protection feature should be noted as well. Not too many forex firms provide this feature. Those of you who have been trading since 2015 (SNB’s abrupt EURCHF 1.20 removal) would know the significance of Negative Balance Protection. Spreads are tight and they offer a lot of options in terms of deposit / withdrawing funds.

AAFX Trading Account Types

AAFX Trading provides two different forex trading account types for its clients. The first one is Fixed Account. As you can guess from the name, the spreads on instruments don’t change depending on the time of the day or volatility. Spreads are fixed and 2 pips for majors. Traders can choose between USD, GBP and EUR for their account currency. Maximum leverage is 1:2000 for accounts up to $20000 and 1:1000 for account bigger than $20000. AAFX Trading doesnt charge any commission on the top of spreads for executed trades. Traders are allowed to use Expert Advisors (EA) on this account type and minimum deposit is $100.

The second account type is ECN Account. ECN Account has exact same specifications with Fixed Account other than spreads. Spreads could go as low as 0.3 pips on ECN Account compared and the spreads are variable.

AAFX Trading Customer Support

AAFX Trading offers customer support in many languages including Arabic, Chinese, Czech, Croatian, Danish, Dutch, English, French, German, Greek, Indonesian, Indian, Italian, Irish, Japanese, Korean, Malay, Norwegian, Polish, Portuguese, Romanian, Russian, Slovak, Spanish, Swedish, Thai, Turkish, Ukrainian, Urdu and Vietnamese. There is Live Chat feature on the web site where you can get accurate and quick answers to your inquiries. Another important point about AAFX Trading is that the Company is one of the rare off-shore forex brokers that accept clients from the US as I mentioned at the introduction of the review.

AAFX Trading Platforms

MetaTrader 4 is the trading platform that AAFX Trading offers to its clients. In addition to PC desktop version, MetaTrader 4 for MAC, MetaTrader Web and MetaTrader Mobile are also provided by request. MetaTrader 4 is the most commonly used trading platform that comes with a huge bag of trading, charting and monitoring features such as Expert Advisors, Technical Indicators and 9 different timeframes. AAFX Trading doesnt only provides the trading platform but also offers informative tutorials for the novice traders who have not used MetaTrader 4 before.

AAFX Trading Withdrawal and Deposit Methods

AAFX Trading clients can use eight different methods for depositing and withdrawaing money. These methods are Wire Transfer, Debit Card, Credit Card, Web Money, Skrill, Neteller, Fasapay, Bitcoin. I should point out that there are not too many forex brokers that offer Bitcoin as deposit and withdrawal method. Even though, international wire transfer and credit card are my two favorites for financial transactions with forex brokers, having Bitcoin as an option is a big plus.

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FXChoice

FXChoice opens account for investors who are residents of the US as well. Having outstanding expertise as a broker in CFD as well as Forex trading for fund managers, private clients and institutional investors, FX Choice has been around almost for 10 years trying to provide the best service and support to their clients. Their extraordinary service earned FXChoice the prestigious Exceptional Customer Service award by LiveHelpNow 5 times in the year 2016 alone.

One of the things that make FXChoice really special is the fact that they allow traders to trade on more than 40 currency pairs and a plethora of other CFDs. And they offer their clients with amazing trading experience with the help of two exceptional platforms. As a matter of fact, FXChoice executes more than 15000 transactions in a day with the help of their NDD technology.

FxChoice Account Types

There are two types of accounts that are available for the clients of FXChoice. While one of them is a named classic, the other one has been named pro. These two account types have a basic difference amongst them. The accounts belonging to the classic type are completely commission free; thus they come with wider spreads. On the other hand, the pro account type is commission based so they provide the clients with tighter spread as per the norms of ECN. Plus, you can avail either MetaTrader 4 or MetaTrader 5 trading platform as per your choice only if you are using the Pro account. Apart from that, you will have the choice for opening a corporate or individual account as per your wish.

FxChoice Trading Platforms

FxChoice provides their clients with a myriad of choices on the trading platforms. MetaTrader 4, MetaTrader 5, as well as Myfxbook Autotrade these are the trading platforms that a client can choose between. When it comes to the MT4 and MT5 platforms, they do not only offer access to the CFD and forex market but they also help the clients to invest in the options and futures market. Moreover, the MT5 platform allows the client to trade in the stock market too.

FxChoice Withdrawal and Deposit Methods

FXChoice offers their clients to deposit and withdraw funds using different methods. From the debit card, credit cards, e-wallets, Fasapay, Bitcoin, Skrill, Neteller to Perfect Money, ePayments, Trustly, Astropay and PaySafeCard.

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What is FOMC - FOMC Meeting Schedule

What is the FOMC? What Does FOMC Do?

Hardless of whether you are a finance professional or an induvial trader/investor, if you are in finance world, you have heard 'FOMC' tons of times. Perhaps every day. But what exactly is the FOMC? What does the FOMC do?  If you are a forex trader, you certainly have to understand the answers to these questions in order to be able to become a successful trader. Especially, if you are into the fundamental part of the forex analysis.

Short for Federal Open Market Committee, FOMC is the policymaking branch of the Federal Reserve System. FOMC makes monetary policy decisions such as interest rates, quantitative easing programs. There are 12 members in FOMC of which 7 are board of directors and remaining 5 are presidents of the regional Federal Reserve Banks. There are 12 Federal Reserve Banks in the system and heads of those banks take seat in FOMC by an annual rotating basis. With one exception; New York Fed. Since a big portion of open market operations are conducted by New York Fed, its president has a permanent seat in Federal Open Market Committee. Another caveat is that heads of every regional 12 Federal Reserve Bank attend FOMC meetings however only 5 of them have voting rights on monetary policy decisions.

Federal Reserve System - FOMC Meeting

FOMC Meeting Calendar – 2018-2019

FOMC schedules one meeting in about every six weeks which roughly equates to eight meetings a year. The committee may also hold unscheduled emergency meetings just like how they did at the peak of Great Financial Crisis in the fall of 2008. FOMC releases a monetary policy statement that includes the decisions made in the meeting and economic assessment of the committee at the end of every meeting. Following the every other meeting (four times a year), FOMC Chair holds a press conference to offer committee’s economic projections for next two years and additional information about monetary policy prospects.

Date Federal Funds Rate Statement
Past FOMC Meetings
August 1, 2018 2,00 Read
September 26, 2018 2,25 Read
November 8, 2018 2,25 Read
December 19, 2018 2,50 Read
January 30, 2019 2,50 Read
March 20, 2019 2,50 Read
May 1, 2019 2,50 Read
  Next FOMC Meetings
Expectation
June 19, 2019 2,50

Questions to Ask Your Forex Broker

Best Forex Brokers 2019

Here at Top 10 Forex Brokers, I try my best to assist you to choose the most suitable forex broker for your experience and trading style. I consider several factors while reviewing and ranking forex brokers. In this article, I am going to talk about the most important six of those factors.

First things first, I find no excuse for not to repeat that working with a reliable forex broker comes before anything else in forex trading. You may have found the holy grail and your strategy could be making thousands of bucks every month consistently. However what good is it to be if you selected a vulturous forex broker?

These are the most important six criteria to consider when choosing a forex broker;

Regulation

This should be the first and by far the most important question to ask your forex broker. Compliance with strict standards and safety of your funds come before any other affair in trading in my humble opinion and it is ensured by the strict regulation. Imagine that you have a winning trading strategy under your disposal and you are earning a decent amount of money on forex trading, however consider whether it really matters, if you are not going to be able to withdraw your profit from the broker.

FCA (UK), ASIC (Australia), CFTC (US) and SEC (US) are the regulators which I respect the most and I would comfortably say that any broker that are under the jurisdiction of those regulators are to be trusted. They will ensure that the broker you are trading with is not located in a tropical off-shore island where you are going to be able to reach if anything goes wrong with your account and trades. So regulation, regulation, regulation guys… but of course by a reputable regulator.

Questions to Ask Your Forex Broker - Is the Broker Regulated

The Broker's Past

A company’s history tells a lot about its success and customer satisfaction. You know very well that a fraud company cannot stay in the business for long time. This is particularly true for forex sector. I would recommend you to look for your forex broker to operate in forex business for at least five years. Scams only survive for few years and even less if they are regulated by one of the strict regulators such as FCA, ASIC and CFTC.

Spreads and Commission

Spreads and commissions are the primary criteria for many investors when they choose a forex broker. It makes sense since traders’ goal is to earn money and lower the spread and commission higher the profit for trader. Especially for those traders whose trading strategy is based on scalping and short term trading, lower cost of trading determines the difference between a winning and losing trade. No doubt that this is crucial however it is at third place on my list because, again, how it matters if you get super low spreads from a broker but it is not regulated and you don’t know if you could withdraw your profit.

Deposit and Withdrawal Options

Before you start trading and profiting on your trades, you first should deposit funds into your forex account. And in order to be able to spend your profit, you first must withdraw the funds from your account. Therefore you should ask your forex broker how easy it is to deposit and withdraw funds and what options they offer. The most common two methods for deposit and withdrawal are wire transfer and credit card. However, say you are only willing to deposit money into your account by Neteller, so you have to ask the broker if you can do it by this certain way before even sending your application and submitting your documents. Make sure they offer the methods that suit best to your preferences.

Questions to Ask Your Forex Broker - Deposit and Withdrawal Options

Instruments and Products

Okay, you have been trading forex all the way till now however you have just read a report and are convinced that there is a great buy opportunity on gold. You go through your broker’s instrument list and no, gold is not there. Phew, you have just missed a potential profit dude. I am the same. I am trading forex pairs most of the time but I still would like to have other instruments at hand. Not only precious metals though. Make sure that CFD indices, oil, agricultural and soft commodities are present and ready for trading on your platform.

Trading Platforms

You have been trading with MetaTrader for long time and it is the only way for you to trade. Now you have signed up with a new broker just to see that they are not offering MetaTrader. Ouch, big frustration. Most of the brokers offer MetaTrader as the standard trading tool but it is not rare to see brokers developed their own platform and only providing clients with their unique trading software. If you were planning to use an EA programmed for MetaTrader, you were most likely not going to be able to do it. So it is always a good idea to ask your forex broker up front what trading software they provide.

So based on those six criteria, what are the best forex brokers in 2019? After trying and trading with more than hundred forex brokers, these are the top 5 forex brokers considering and combining regulation, withdrawal and deposit methods, spreads and commissions, trading platforms and brokers overall reputation;

Broker Info Regulator Next Step

Headquarters: USA
Min Deposit: $0
Leverage: 50:1

CFTC, NFA, CIMA

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Headquarters: UK
Min Deposit: $5
Leverage: 888:1

CySEC, ASiC, FCA

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Headquarters: Cyprus
Min Deposit: $5
Leverage: 1000:1

CySEC, IFSC

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Headquarters: Cyprus
Min Deposit: $100
Leverage: 1000:1

CySEC

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Headquarters: UK
Min Deposit: $100
Leverage: 500:1

FCA, CySEC, Seyschelles FSA

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Best Bonus Forex Brokers 2019

Forex bonus and promotions are one of the most important factors that affect forex traders’ decision for choosing a forex broker. Forex brokers offer variety of bonus and promotions with purpose of marketing strategy to attract new clients and as a reward to keep current clients loyal to the company. To name a few, bonus programs usually come in the form of welcome bonus and deposit bonus.

Bonuses and promotions are one of the criteria I take into account when reviewing forex companies. However, it is not very smart to open an account and trade with a forex company just because the company offers generous bonus and promotion programs. Other factors such as strong regulation, different withdrawal and depositing methods, convenient trading conditions including platform and assets must come in hand with bonus and promotions.

Purpose of Forex Bonus and Promotions

Bonuses that are credited into your account as welcome bonus or deposit bonus cannot be withdrawn. Rather, you should consider the bonus as a tool that gives you extra leverage.

For example, say that you opened a trading account and invested in $1000 with a forex broker that offers 20% welcome bonus. The leverage is 100:1. Without bonus, you would be able to trade as large as 100x$1000 = 1.000.000. On the other hand, with bonus you can now trade as large as 100x$1200 = 1.200.000.

Best Forex Bonus and Promotions

Forex Brokers with Best Bonus and Promotions

XM Forex Bonus and Promotions

I believe that XM is among the most professional and respected brokers in the industry. Fast execution, generous bonuses, regulated by very respected watchdogs, transparent, reliable, great daily analysis material, extensive educational content, nano account option and customer support in more than twenty languages. Add around ten years of investment services experience to those features and XM becomes a real gem in an industry where a new scam company appears every day.

  1. $30 Trading Bonus. This is a non-withdrawable bonus only available to new clients. The best thing is that you dont have to deposit money into your account in order to be able to become eligble for this bonus and All profits that you earned can be withdrawn.
  2. 55% Deposit Bonus - Your account is instantly credited 55% of the amount you deposited. This bonus works for the amounts up to $500 or equivalent.
  3. 20% Deposit Bonus - Your account is instantly credited 20% of the amount you deposited. This bonus works for the amounts up to $4500 or equivalent.
  4. Zero Fees on Deposits & Withdrawals - XM covers all the commission and fees for your deposits and withdrawals. All e-wallets - 100% covered; all major credit cards - 100% covered; wire transfers above 200 USD covered.

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InstaForex Bonus and Promotions

InstaForex is founded in 2007, headquartered in Russia and regulated by CySEC in Cyprus and FSC in British Virgin Islands. My experience with InstaForex dates back to 2011. I came across with this broker upon my research for a new broker after the firm I used to trade with lost their FCA license and my loyalty still continues. I still have an active trading account with InstaForex where I trade occasionally.

  1. LFC Partnership Bonus 100% - You get 100% bonus on your first deposit. This is bonus cant be used concurrently with other types of bonuses. 100% bonus is credited to your account instantly after you complete the application.
  2. Welcome Bonus 55% - This bonus works each time you make deposit into your account. 55% bonus is credited to your account instantly after you complete the application.
  3. Welcome Bonus 30% - 30% bonus is credited to your account instantly after you complete the application.
  4. InstaForex Club Bonus - Additional bonuses for members of InstaForex Club. This type of bonus can be used with other types of bonuses.

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HotForex Bonus and Promotions

Established in 2010 and headquartered in Cyprus, HotForex is an award winning forex broker that offers a wide range of account types and trading instruments. The broker is pursuing a policy of providing the most convenient and advantageous trading conditions for the traders. They don’t discriminate between traders which means that scalpers, swing traders, day traders and expert advisors are all welcomed.

  1. 30% bonus is called rescue bonus and traders will receive it on every deposit over $50.
  2. 100% Credit Bonus Program which is intended to increase the trading volume. Traders must trade 1 lot per $2 bonus received to complete the terms.
  3. 100% SuperCharged Bonus which offers 100% bonus on each deposit over 250 USD to the bonus account together with the rebates in value of 0.2 pip value for Forex and 2 USD per Gold.

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FXTM Forex Bonus and Promotions

Established in 2011, FXTM is an award-winning forex broker that offers a reliable and secure trading platform. The platform covers more than 300 instruments including forex pairs, stock indices, company shares, commodities and cryptocurrencies. FXTM is one of the most prominent forex brokers in the industry that frequently appears in media and is proud sponsor of a Formula One racing team.

  1. FXTM offers a Switch to FXTM USD30 bonus program. For this bonus program, you need to click and accept the bonus terms and conditions through MYFXTM portal and then make a minimum deposit of $150. If you trade 1 standard lot within 30 days, you can withdraw the bonus USD30
  2. The 30% Bonus Promotion is offered for any amount of the first deposit made and to a minimum of $500 USD for each of any further deposits.

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FBS Forex Bonus and Promotions

FBS was founded in 2009 and regulated by both CySEC in Cyprus and IFSC in Belize. The company offers generous bonuses, useful educational material for novice traders, daily market analysis in various languages and presence in many countries. In terms of account types, FBS provides a wide range of selection for professional and beginner traders. There are six options; cent account, micro account, standard account, zero spread account, unlimited account and ECN account where spread could go below zero at the expense of $6 per lot. The 3000:1 leverage offered by FBS is the highest you could get among regulated forex brokers.

  1. $50 Welcome Bonus – FBS offers $30 welcome bonus with the leverage of 1:500. You don't have to make deposit to be eligible for this bonus.
  2. $123 Welcome Bonus - This bonus is offerred to every trader. No contact details or verification reguired. Valid for 7 days.
  3. 100% Deposit Bonus - Fund your account and get a 100% deposit bonus. You have to send a request to your account manager to get this bonus credited to your account.
  4. FBS also launches trading contests periodically and offers rewards (such as smartphones and automobiles) to the traders conditional on the amount deposited and lots traded.

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AAFX Trading Forex Bonus and Promotions

AAFX Trading is one of the few forex brokers that accepts clients from the USA. After 2008 Great Financial Crisis, US regulators (such as SEC, CFTC) tightened the regulations for finance and investment firms. The company is founded in 2013, so passes one of my criteria of being a reliable forex broker. Negative balance protection feature should be noted as well. Not too many forex firms provide this feature. Those of you who have been trading since 2015 (SNB’s abrupt EURCHF 1.20 removal) would know the worth of Negative Balance Protection. Spreads are tight and they offer a lot of options in terms of deposit / withdrawing funds.

  1. 35% Welcome Bonus - The new traders who deposit a minimum of amount of 500 EUR/USD get the 35% tradable bonus.
  2. 30% Redeposit Bonus - Existing clients will be able to enjoy this special 30% bonus on top the amount they deposited.
  3. AAFX rewards either existing or new clients the opportunity to get a free smartphone conditional on the amount deposited and lots traded.

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AvaTrade Forex Bonus and Promotions

You would like to trade forex and you like to have the opportunity to hedge your spot trades with put/call options as well. On the top of that, you are planning to invest in stocks like Apple, Amazon, Microsoft, etc. Cryptocurrencies such as Bitcoin have been getting more and more popular recently and you like to try those too. AvaTrade is probably one of the best forex brokers all around the world when it comes to the range of instruments offered. In addition, they are regulated by reliable institutions such Central Bank of Ireland and ASIC.

  • AvaTrade assist you to fulfill all your trading goals with a dedicated account manager at your side and up to 25% welcome bonus.

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easyMarkets Forex Bonus and Promotions

Spreads are high but I like their vanilla options feature. When you are on a swing or medium term trade, I strongly recommend you to use different option strategies for hedging and lowering the risk in the case that you are on the wrong side of the market. They are headquartered in Cyprus but they have ASiC license as well. I also like their negative balance protection feature which means you will never owe more than you deposited. People started to appreciate this feature a lot after EURCHF crash following the sudden removal of 1.20 peg by Swiss National Bank SNB. easyMarkets also offer different bonuses depending on the account type and where you reside.

  • easyMarkets offers First Deposit Bonus to all traders who make a first deposit USD 100 or above. The bonus amount is percentage based and linked to the client’s first deposit. First deposits between $100 - $199 receive 30%, $200 - $1000 receive 50%, $1001 - $5000 receive 40%. To claim the bonus, the client shall contact their relationship manager and quote ‘First Deposit’ bonus.

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Alpari Forex Bonus and Promotions

Alpari was founded in 1998 and is one of the oldest online forex brokers. They are now headquartered in Saint Vincent and the Grenadines and regulated by Belize IFSC. Well, odd enough. They still don’t offer negative balance protection but on the other hand fixed spreads account option is there and investors are able to trade with 1:1000 leverage.

  • 120% Deposit Bonus - New and existing clients get their account boosted by 120% of the amount they deposited.

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A Guide to Winning Big in Forex Trading

While the recent trade war has had a deep impact on the supply chains across the globe, this has provided the Forex traders with a myriad of opportunities. Though you will not be able to become a billionaire all of a sudden, you will be able to the competition in the market to help your trade. But how will you do it? Well, there are several things that you need to be assured to profit in Forex trading. Here are a few tips that you can use to master in the Forex trading:

Finding the Best Way to Start

The most important thing that you need to get started with Forex trading is money. If you do not have the money needed then you will not be able to start your journey in the Forex market. Thus, arranging the money and getting started is obviously the first step in Forex trading. Nevertheless, it is not easy for everyone to round up the cash to start trading. Well, in that case, there are only two choices that they are left with. They can either start making small investments and go up the market from what they earn or they can take a loan from others to start trading. But you will have to understand that the second option has its own fair share of risks.

There is another trick you can use if you are above sixty and own a home. Of course, you can use the trick of a reverse mortgage to get the money you need to start trading. In this way, you will be able to make use of the equity that your home holds without the need to pay back the loan till the end of your life. As a result, you will have the money you want without the need to pay the loan.

But you need to remember at all times that the money that you are getting from a reverse mortgage is not free. Of course, it has to be returned eventually since it is a loan. So, it comes with some sort of risk factors. However, if you are completely aware of what you are doing then you will not have to worry about the reverse mortgage.
Above all this, you can also seek the help of sponsors as well as investors to team up with you to benefit from the trade. In this case, you need to have a proven strategy for trading which will provide you with the best results.

A Proven Strategy is Must

When you are trading in the Forex market, you will need a proven strategy or a proper plan of action. Trading in the Forex market may seem like gambling to many. But you need to remember at all times that the Forex market traders do not go into unnecessary trades. They analyse every byte of data available, research the market properly, review different trading models and trade as per their risk appetite. These are a few things that you need to remember vividly if you want to become a winner in the Forex market.

The efficient traders are those who do not worry about the frequency of their trades. But they always make sure that they achieve utmost success from the trades that they enter. They do not try to get success from every trade but they only focus on those from which they can get what they aim for.

So, how will you start trading in the Forex market? As said earlier, the very first thing that you need to do is to carry out proper market research. You can study the market properly, understand the trends by reviewing different models and simulated trades to develop your own trading strategy.

You can also take the help of "Price Action Trading" strategy to trade in the Forex trade. This strategy has been around for a long time in the market. It requires you to study the Forex pricing chart and understand the trends of Forex pricing. It is one of the proven strategies that traders favour since it is simple yet efficient. Then again, you can always develop your own strategy to excel in Forex trading.

Utilise the Time Properly

While most of the people think that trading for the shorter time frames is always best, you must focus for longer time frames when you are beginning as a trader in the Forex market. You may not be able to make use of the high opportunities of the short trades but engaging on the long trades will help you to have a proper understanding of the market. So, do not get into the short trades in the beginning. Improve your understanding with the long trades and become a winner.

Analyse the Market in the Right Way

One of the mistakes that most of the people make is to watch the hourly charts to modify their trade when they are trading on the day to day basis. This practice can compel you to make wrong decisions since you are not trading on an hourly basis. As a result, you need to get rid of this habit. View the charts only before the market opens and after the market closes to understand the trends as well as to make a proper analysis.

Trading in the Forex market requires you to be smart as well as efficient. So, have a look at the tips mentioned above, follow them earnestly and achieve big success in the Forex market.


What are the Best Currency Pairs to Trade?

What does trading in the foreign exchange market mean? Well, it actually means trading in currency pairs. Thus, it is very important for investors to understand the currency pairs clearly before getting started with trading in the foreign exchange market. Without understanding what a currency pair is; the purpose behind the pairing of currencies; the working of these pairs, the best currency pairs to trade and the factors that cause the movement of currency pairs, it is not possible for anyone to be successful in the volatile market of forex.

In reality, the entire foreign exchange or Forex market is grouped in currency pairs which fluctuate 24/5 since the market is closed on the weekends. Though it is said that the currency pairs fluctuate 24/5, it is actually a formal notion. Several important economic, as well as political events, occur on the Saturdays and Sundays which affect the currency pairs directly. Thus, when the market reopens on Monday, the currencies may show a gap in their values.

Classifying the Currency Pairs

The first classification of currency pairs can be made by differentiating the major currency pairs from the crosses. So, what is a major? A major is a basically a currency pair which has the US Dollar as one of its components. The main examples of the major currency pairs are GBP/USD, EUR/USD, USD/CHF, AUD/USD, USD/JPY, USDCAD and NZD/USD. So, it is now easy to understand what a cross is following the very same reasoning. Of course, a currency pair that does not have the US Dollar as one of its components is defined as a cross.

Consequently, one can understand that the currencies are paired with each other as well as with the US Dollar. Understanding this classification is essential as it helps the traders to grasp the concept that works behind the fundamentals of the forex market as well as the importance of the currency pairs.

Best Forex Pairs to Trade

According to the thumb rule, the major pairs are always much more important than the crosses. But why is it so? It is because of the fact that the US Dollar is being the world’s reserve currency and the most traded currency in terms of daily volume. As a result, the volatility that exists in trading a major is much more when compared to trading the crosses.

It is well known that the economy of the United States is hailed as the world’s largest economy. Hence, all the major economies around the world are compared with it which in turn provides this massive importance to the major pairs.

Let us take an example to understand this more clearly. Suppose; the Consumer Price Index (Inflation) or CPI is released in the countries of European Union which have Euro as their currency. And let us assume that the inflation comes in the Euro Zone at a lurching pace of 4.0% which is well above the target %2.0. As a result, it will create a huge buying spree for the EUR/USD pair since the higher rate of CPI implies that the central banks will hike their rates and that is what matters actually when it comes to trading the currencies.

Nevertheless, let’s assume that another important event happens on North American Session concerning the US Economy on the very same day. Consider that the Federal Open Market Committee (FOMC) releases a statement that fosters future increase in their rates. Well, it is understandable that this will create a completely reverse effect on the gains achieved on EUR/USD pair due to the inflation in the Euro Zone. Incidentally, the pair will hit by a big sell-off. This is why the major pairs are so volatile.

The difference in between the bid price and ask price or the spread is always smaller in case of major pairs than the crosses. As an example, on an Electronic Communications Network (ECN) account, the spread of the EUR/USD pair can go below 0.2 pips.

However, it is very rare to see the spread of the AUD/NZD to go lower than 2.0 pips. Though the crosses are very less volatile compared to the majors, a difference must be made for the crosses since some of them (AUD/NZD, AUD/CAD…) moves very slowly whereas few (EUR/AUD, GBP/CHF, GBP/JPY…) moves even faster than the majors.

Making Profit in Forex Market

Like we mentioned before, there are two prices associated with a currency pair. The first is the bid price and second is ask price. The bid price is the one that is always shown on the left whereas the ask price is always displayed on right. Now, it is crucial to understand that the buying of a pair is always done on the basis of ask price; however, the pair is sold at the bid price. Consider that the EUR/USD pair is bought at 1.1750 but the price goes up to 1.1760 after the pair is bought. In that case, profit will be made since the price goes up after the pair was bought.

As stated before, the difference between the bid and ask price is called the spread. As a matter of fact, the currency pairs with low spreads are always much more attractive than the ones with higher spreads because it takes lesser time and distance to even out the spread cost. That is also the reason why the brokers with lower but more stable spreads are favored over others.

Why does a Currency Pair Move?

It is always essential to know why a currency pair moves and the condition that catalysts this movement in order to anticipate the movements in advance while trading. For this reason, a trader must know the economic calendar in advance to foresee the moves that a pair is making. Nonetheless, a currency pair does not only move due to the economic events. As a matter of fact, it can also move based on the law of supply and demand. If a pair has a large number of buyers, naturally its price will be increased. The opposite may also happen if there are large numbers of sellers.

What Makes a Currency Pair to Move

To understand the right time to buy or sell a pair, the traders take the help of technical analysis. It helps to understand the prop in a falling trend as well as defiance in a rising trend. Furthermore, the analysis also foretells the prices on the right side on the basis of the chart patterns that are projected on the left side.

Historical analysis can also be made with the help of trading theories and variety of data available with respect to different time frames. As per the thumb rule, the greater the availability of information; more accurate is the prediction of the currency pair.

To conclude, it must be understood that the importance of the currency pairs is calculated on the basis of the speed of their movements and the distance that they travel and major currency pairs such as EUR/USD, GBP/USD, USD/JPY and USD/CHF are broadly considered as the best currency pairs to trade

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How Does Leverage Work in Forex

What is Leverage? How Does Leverage Work in Forex?

Forex trading has always been one of the most popular types of investment policies. But the thing that makes it so appealing to the investors is the fact that you can obviously get much higher leverage in forex than any other trading option. However, most of the investors do not understand how the leverage works in forex and it sometimes becomes the reason behind their losses. So, without spending much time; let us answer the question ‘’What is Leverage?’’ and ‘’How Does Leverage Work in the Forex Market?’’

Leverage in Forex

Leverage is actually nothing but borrowing some money for investing in some other thing. In forex trading, the money is basically loaned from a broker. Nevertheless, you can usually gain much higher leverage in forex when compared to the other markets. Why is it so? Well, here you can build up as well as control a huge amount of money for a small initial margin.

Leverage in Forex

Working of Leverage in Forex Trading: Actually, the concept of leverage has been used by smart investors as well as companies for a long time now. The individual investors usually use the leverage to increase the profit on their investments. On the other hand, the companies often use the leverage technique to get the finance for their assets and hedge their foreign currency exposure. What does that mean? It means that the companies use the method of debt financing to fund their business operations in order to increase their shareholder value instead of raising their stocks. In forex trading, investors make use of the leverage to gain more from the fluctuations in between the exchange rates of the currencies of two different countries.

As a matter of fact, investors can basically achieve the highest leverage in forex. As I said earlier, leverage is actually a loan that is provided to the investors by the forex brokers. If a trader wishes to trade in the forex market, a margin account must have to be opened first with the broker.

The leverage ratio provided by brokers usually ranges from 50:1 to 500:1 depending on the broker policy and regulation. What purpose does the leverage ratio serve? The leverage ratio actually signifies the minimum margin in forex. If the leverage ratio is 50:1, then it signifies that the lowest margin requirement is 2%. Similarly, the margin requirement for the 100:1 leverage ratio can be calculated as 1% and so on. But what does it mean?

Understanding Leverage through an Example

Let us take an example to understand the leverage ratio and margin requirement in a clearer way. You already know that leverage ratio signifies the minimum margin requirement. So, if the leverage ratio is 100:1, then the minimum margin requirement is 1/100 that is 1%. It means that the trader must have at least 1% of the total trade value in the trading account as cash.

Say you would like to go long 100.000 units of EURUSD at the current price which is 1.19. Without leverage, you would need $119.000 cash in order to be able to transact this trade. On the other hand, with 100:1 leverage, you would only need $1190 cash (or margin) to invest 100.000 units of EURUSD. In practice, the forex broker loans you the difference between $119.00 and $1190 and your trade is closed if your position is in loss of $1190.

Risk Management in Forex

Though a leverage ratio of 100:1 may seem very risky, the leverage is the whole purpose and benefit of trading currencies with an online forex broker. That is why; it is always wise to trade with forex brokers with high leverage.
Although the chances of doubling your profits are great, there are some substantial risks too in leverage in forex trading since the value of the currencies can go in the opposite direction at any moment. This is the reason you must never trade leveraged forex without an emergency stop or a guaranteed Stop Loss order. So, be smart and trade in the forex market with leverage to earn higher profit but never without risk management.


Technical Analysis vs Fundamental Analysis. Which is better?

Forex traders utilize benefits of fundamental analysis or technical analysis (sometimes both) in order to predict the future direction of a currency pair and initiate the trade in the hope of making profit.

Fundamental analysis attempts to estimate the real value of a currency using economic data, monetary policy stance and political factors such as GDP growth, unemployment rate, inflation, interest rates and political sentiment. On the other hand, technical analysis assumes that all of these information is already reflected in the value of the currency and uses past price activity in order to predict future value of the currency.

Same Question, Different Approaches

Both fundamental and technical analysis methods attempt to solve the same question, that is, to predict the direction prices are likely to take in the future. It is just that each method has different approaches to the question. The fundamental method examines the cause of price movement, while the technical method examines the effect.

Fundamental Analysis vs Technical Analysis

The technical trader is convinced that all he / she has to know in order to be able to make accurate predictions is the effect. The causes are irrelevant for technical traders. However the fundamental trader has to know the reason and causes of the price movement.

Most of the time, traders label themselves as either a technical trader or a fundamental trader. However, they are not completely detached from each other and there is a considerable amount of overlap.

Many fundamental traders have working insight for the chart analysis and price action. In the meanwhile, many technical traders have practical knowledge of the fundamental factors such as interest rates, growth, and unemployment rate.

The Clash of Technical and Fundamental Analysis

However, technicals and fundamentals may clash on their prediction about where the value of a currency is directed in the future. This happens frequently at the beginning of big trends. At the early stages of important price moves, the fundamental analysis fails to explain or comply with how the markets appear to behave.

This is because the price discounts already known fundamental factors which means that they are already reflected in the current market price.

Thus, prices are now adjusting itself to the unknown fundamental factors. When some of the biggest bull and bear trends in the history began, there was little or no obvious change in the fundamentals. By the time market players became aware of the reason for the fundamental change, the new trend was already ongoing for a while.

Fundamental vs Technical Analysis

On the other hand, technical traders are used to the situations where price action conflicts with known fundamental factors. Technician knows that the reasons for price movement will be revealed to all market players. It is just that the technician doesn’t see any reason to wait for the additional confirmation.

Technical traders usually find their approach superior over fundamentals because, by definition, technical analysis assumes that every fundamental factor is already priced in and reflected on the chart. This assumption makes the study of fundamentals unessential.

Different Time Horizons

Fundamental analysis is considered as a long term investment approach while technical analysis takes a shorter term approach for analyzing the markets. A change on the monetary policy stance of a central bank could cause a long term trend reversal and create trading opportunities for a period between several weeks to several years. Traders who like to invest in currencies for long run are tended to benefit from fundamental analysis.

However, trading currencies on technical analysis is a short-term oriented approach. Some scalping strategies that are based on technical indicators could last as low as few seconds. Therefore, short term traders use technical analysis more commonly.

Fundamental vs Technical - Which is better?

Which One is better?

It is hard to say whether fundamental or technical analysis is better since they are useful for different trading strategies on different time frames. Fundamental analysis is useful for identifying undervalued or overvalued currencies and finding trade opportunities in the long run.  On the other hand, technical analysis is useful for trading strategies focusing on shorter time periods and timing the order.

As an important final world, I must say that you don’t have to choose between the two approaches. Many forex traders mix both fundamental and technical analysis into their decision making process.

These type of traders look for the trading opportunities where both technical and fundamental analysis agree each other. If technicals and fundamentals indicate contrasting predictions for the future price movement of the particular currency, they tend to be hesitant on triggering the trade order.


How to Use Technical Analysis in Forex Trading

In the past, fundamental analysis used to dominate forex market. Until mid-1980s, when there was no sophisticated trading tools and platforms, investors was primarily trading based on the fundamental factors. However, following advancement of new technologies, technical analysis in forex market has become more popular. More traders joined to the ranks of technical approach by utilizing chart patterns and indicators more frequently. Thus the impact of technical analysis on the forex market has increased remarkably and if you want to become a profitable forex trader, you have to get to learn technical analysis.

Technical analysis concentrates on the study of price action. This type of market analysis use historical data to predict the direction of prices movements. The main premise of technical analysis is that all necessary information to forecast future price action is already reflected on the price chart. Therefore, studying price movements and price chart is all that is required to make high probability trading decisions.

Technical Analysis in Forex Market

Since majority of the long term trends are generated by fundamental factors such as GDP, interest rates and politics, technical analysis could prove very useful when utilized for short term to medium term trades. It complies well with the forex market because majority of short term price movements are driven by human emotions and market sentiment.

Forex Trading - Human Emotions

The most important tool in technical analysis is price charts. Technical traders use price charts to detect trends and patterns so that they can find profitable trade opportunities. In addition, technical analysis tools such as chart patterns, Fibonacci levels, Moving Averages, RSI, Stochastic, candlestick patterns and Bollinger Bands are used by forex traders to get further information about direction of the trend, overbought and oversold levels, support and resistance levels.

One of the biggest benefits of using technical analysis is that it provides traders an understanding about the psychology and sentiment of the market participants. Humans tend to leave clues about their emotions on the price chart and technical analysis is the best tool so far to identify them. Even though, the market participants may change over time, human emotions and human reaction to certain events doesn’t change. Technical approach is used to exploit this fact.

Assumptions of Technical Analysis

There are three assumptions which the technical analysis is based on.

Market Discounts Everything

This assumption probably composes the most important pillar of technical analysis. Unless a trader fully understands and acknowledges this basic premise, he / she won’t succeed at using technical analysis to predict future price moves in the forex market. The technical traders believe that any fundamental factor that can have impact on the price such as political instability, economic releases, interest rates, etc. are already manifested in the price on chart. Therefore analyzing price movements is all that a trader needs.

This argument, which is called Efficient Market Hypothesis, nullifies the claim that technical analysis is only based on price action and doesn’t reflect fundamental factors. The technical traders presume that price chart contains the effects of fundamentals on the supply and demand for the related currency.

Forex Trading - Technical Analysis

Prices Move in Trends

The concept of trend is crucial for the technical analysis. The technical trader believes that price of an asset moves in short, medium or long term trends and main purpose of charting the price movements of an asset is to recognize a trend. A trader profits if he / she is on the right side of the trend and loses if he / she is on the wrong side. Most of the tools that technical analysis employs aim to identify current trends and predict future trends.

History Tends to Repeat Itself

Since majority of trades on exchange market is transacted by humans, it is essential to study human psychology in order to become a profitable forex trader. When you look at a price chart, you are very much likely to see some patterns that repeat itself. This repetitive feature of price action is associated with traders’ emotions like excitement, dismay, anxiety and fervor.

These emotions has been around for thousands of years and not likely to disappear in near future. Technical traders utilize chart patterns which are formed as a result of the human emotions and attempt to predict future trends to make profit in the forex market.  In very simple words, technical traders believe in the notion that future relies on the study of the past.