Sometimes, it is not possible to understand the functionality of every forex white label software package available.  If you are a beginner to forex trading, then you may want software that is simple to use, or price may be a deciding factor.  Another method is to check online reviews to see what other people think.

Forex trading software that is designed for the personal forex trader has become a fast-moving market as more people choose to invest using currency trading.  Software tends to fall into four main types that include technical analysis software, trading platforms, forex robots, and trading signal generating software. 

Technical analysis software uses a variety of programs to analyse foreign exchange rates.  You will be able to do a range of analysis, from simple trends to moving averages, through to using complex indicators.

A forex trading platform allows personal traders to key in and execute their currency trades with their online broker.  You will need to download a client-side version of the software that the broker uses, although there will, perhaps, be only one or two possible software options available.  You will be able to manage a number of trading accounts, chart, and back-test your trading decisions.

Forex robots are generally automated software trading options that carry out a pre-determined trading system based on historic trading results.  These can save time, but should be tested in a demo account before running on a live one.

Finally, forex signal generators provide indicators where a trader can choose to trade on a particular market by flagging up opportunities.

Some software suppliers will provide you with demo versions of the software for you to try.  You can download a trial or demo version and, if you feel it does not suit your needs, you could uninstall it.

The Consumer Price Index (CPI) increased by 3.5 per cent for the UK in March. When the report came out in April the market went upwards, sending the pound in a bullish run against the dollar.  An inexperience trader might sell pounds quickly upon hearing of the increase in the UKs CPI but a more seasoned one would not.  Intuition may play an important part in the buying and selling of currency but it can be wrong unless based on experience.  Time spent with a FOREX demo can give the necessary experience needed to augment the release of FOREX news, saving the trader from making a basic mistake.

It is worth noting that traders are often not so much interested in what is happening as in what will happen next as a result.  It is also important to remember that no one event determines whether a currency’s value will go up or down, each event must be taken in context.

Currency trading versus stock trading

The biggest difference between the foreign exchange market and the stock market is the fact that in Forex, you are trading commodities instead of stocks. In the stock market, you’d simply evaluate a stock’s value and then purchase shares of it if you believed it would increase in value over time. With currency trading, however, there is a significant difference.

You won’t see currencies listed individually but, rather, as currency pairs, which show their value against other national currencies. For example, you might see the Pound Sterling expressed against the Euro in a currency pair that reads “GBP/EUR”. The monetary amounts next to the abbreviations represent how much one pound is worth compared to one Euro. Typically, you would want to purchase a currency that you think will become stronger over time.

Analysing market risk

Market risk is also somewhat greater in the Forex market than in the stock market. Currency values can fluctuate in a turbulent manner from day to day, since they are affected by many factors that cannot be predicted. Natural disasters, unexpected upheavals, and international conflicts can all have an impact on the value of a national currency. Since the Forex market is open for trading 24 hours a day, five and a half days a week, you could go to sleep and wake up to a currency that’s changed in value dramatically. Just take it slowly at first and you will be unlikely to suffer losses.

Forex is now the largest worldwide market and profits are made by correctly forecasting movements in exchange rates and buying and selling currencies based on those predictions. A number of factors lead to fluctuations on the foreign exchange market; they include inflation or changes in industrial production, which can signal a time that a particular currency pair should be bought or sold.

Currencies are always quoted in pairs on the foreign exchange market, with one currency’s value being expressed in terms of another. An typical currency pair is the Great British Pound and US Dollar, this currency pair would be shown as GBP/USD. Currency A is shown first followed by currency B. A prediction is made by the trader based on the value of one currency in relation to the other; for example, if they expect the value of the GBP to increase over the USD, they will purchase GBP using USD. If the prediction is correct the trader will then sell the currency back, thus making a profit.

There are three different types of forex charts: bar charts, candlestick charts, and line charts. Bar charts, also called OHLC charts, are made of vertical bars in which the length of the bars are dependent upon the opening and closing price of the currency. Candlestick charts are comprised of identical lines where the high is the top of the line and the low is the bottom, and the block in the middle represents the space between the opening and closing currency rates. Line charts are a simple way to connect the closing price of specific currency over a period to see how the price fluctuates.

While it is true, that over 300 major brokerage companies and financial institutions use MT4, it isn’t just for the big guys.  With access to financial news and events and instant real time quotes you to get the best price and make the best decisions for your portfolio.  There is no need to leverage to reach your profit margin.

The user interface is very intuitive and you can be up and running within just a few minutes of downloading the software.  MT4 is one of the premier trading platforms in use today both because the price point is right and the features are useful.

In such cases, there is a range of options whereby currency trading can be transacted on the investor’s behalf. Automated electronic trading platforms and trading robots and signals reduce personal involvement in trading and allow for fast and flexible currency trading solutions.

Examples of online forex trading platforms are eToro, MetaTrader and FXCBS. Investors may set up accounts online with these platforms for profitable currency trading.

Managed currency trading accounts are another option for investors who prefer professional or automated forex trading. A broker manages their personal account once ‘limited power of attorney’ (LPOA) is granted to them.

Investors receive compounded returns from being linked to the broker’s master account, where trades are made in volume. Brokers deduct performance fees and investors are able to view the progress of their managed currency accounts online.

A simple internet search will reveal many websites that will provide the necessary information to perform fundamental analysis on any country or currency. One of the most popular is the Economic Calendar, which is updated periodically throughout the day, depending on the specific website being viewed. These websites will also typically provide news updates and opinions from forex experts. It is beneficial for every forex broker and trader to have a few of these websites bookmarked.

It makes more sense to explain possible calculations that you might want to make. The moving average is assessed over a set period of time and that time frame is constantly moving. Therefore, if you wanted to look at a five period moving average over a two-hour charting period, you would add up all the closing prices for the last ten hours and divide the total by five. This would provide the mean price of your currency over the last ten hours. If you repeat this every two hours you will get a simple moving average.

Fortunately, if you use a software platform such as MetaTrader 4, it will do these kinds of calculations for you. Making sense of a moving average is important, as it helps you develop trading strategies that reflect changes in the market.

Moving averages help you understand the trends in the market. By plotting the moving averages on a chart, you will be able to see if the currency price is showing an upward or positive trend or a downward or negative trend. If you use moving averages over various periods, all plotted on the same chart, you can even out the blips on the trends to reflect a more accurate view of the upward or downward trend. This prevents you buying a currency in the expectation of it rising, when it is actually only a slight increase before it resumes falling once more.

The forex, is an international market trading the currencies of countries for profit. It is a unique market with no centralised exchange, open 24 hours a day, from Monday morning to Friday evening and trading almost $4 trillion per day; more than any stock market.

Forex Terminology

Forex brokers trade currency pairs, for example USD/CAD, US Dollar v Canadian Dollar. They are like a set of scales, as the one on the left increases in value, the one on the right decreases and vice versa. In this example, the trader believes the USD will increase in value over the CAD.

Forex traders profit by accumulating pips, Percentages in Point. In forex terms, currency prices are quoted to the fourth decimal place. For example, GBP/USD would be quoted at 1.5025. An increase in that value of .01 means an increase of 100 pips. In monetary terms, that is an increase of between $100 and $1,000.

Trading with Brokers

The profit, $100 or $1,000, depends on the type of account held. A mini account enables the trader to buy and sell in lots of 10,000, while a standard account allows for trade in lots of 100,000, i.e. 100,000 lots of GBP/USD, so an increase in value of .01 would mean a profit of $1,000.

Opening an account with a broker requires a minimum equity of between $500 and $5,000. Brokers make their money on the spread, but some also charge commission. Brokers also offer leverage, a small loan, which can increase profits, but also increases risk. Most brokers offer demo accounts, allowing for risk fee ‘virtual’ trading for a limited time.