Tag: Forex

Demo vs. Real Trading: Things to Know Before Making the Switch

It is generally suggested to practice your strategy and accuracy on a demo account while you are new in forex until you know inside out of all the conceptual strategies and nuances in this typical world of trading. And of course, demo account and real account are not different, means you can learn everything you need to learn to make profitable trades. In fact, it is always suggested to that trader’s transition to real account only after they have realized consistent results on a demo account.
New traders generally tend to start their journey with a demo account and yes, it makes sense practicing on a demo account as it is convenient and a practical way to gain knowledge and basics of trading. Here, things get a little tricky. Once the traders have consistent profit, they start expecting the same results from real accounts. But, not only these expectations are unrealistic, but they will also set you up for failure.
It is obvious to understand a sort of psychological block, and fear of losing real money can be scary and distracting. After some period of trading simultaneously, the thought of real losses won’t actually affect the traders’ minds much. If the trade fails traders unconsciously think of a better position with a new opportunity so that they can recover the loss they made instead of being agitated about the losing positions.
Before making the switch from practicing in a demo account to real trading, it is vital to understand and experience what makes these accounts different from one another. Considering these points and planning accordingly will better prepare you and give you the confidence to shift into a real account.

Let’s be conscious of some of the essential points:

Know the risks

You don’t have to face a monetary risk when trading demo. Losing streaks on a demo is not upsetting or discouraging as you have the comfort of knowing you can replace your account with more funds whenever you wish to do so.

Understand the psychological difference

The bottommost line is that trading on a real account reminds the rollercoaster of emotions, especially, during the first shifting from demo trading to real. You are bound to feel uneasy, restless, excited, nervous throughout your first couple of trades. Exaggerated feelings of frustration or anger may also make an appearance.

Accept the volatility of the market

The Market is volatile as it changes in the blink of an eye. Lots of traders are not prepared to handle volatility, while some traders may find it difficult to trade when the market is a little slow or within its sideways. Make sure you have plenty of plans and strategies for all types of market conditions before taking the leap into real trading.

What Currencies are traded in Forex?

Forex Trading- Forex simply means foreign exchange trading. It is all about buying and selling currencies in pairs. You need to have information about the currency in the pair that how much worth ful are they to each other. A currency pair quotes two currency contractions, followed by the values of the base currency which is based on the currency counter.
An international code is always there that specifies the setup of currency pairs. For an example, a quote of EURUSD 1.23 means that one EURO is worth $1.23. In this pair, the base currency is Euro (EUR) and the counter currency is the US dollar, Hence, every currency pair is listed in most currency markets worldwide.
Tell me a market that never closes during the working week which has the largest volume of the world’s biggest business and with people from all countries of the world participating every day?
Yes, the Forex Market. It is the global premier financial market, which mirrors the financial dynamics of the world trade pretty clearly.
When you start trading Forex online, you may find yourself stunned and confused by the absolute number of currency pairs.

With over than 200 countries in the world, you can find handful of currency pairs to indulge with trading, though, these currency pairs may not have the potential to deliver the great results to traders.

So, what are the currency pairs
Before examining about the best currency pairs, it is good to enhance our knowledge on the most popular currencies that can be found
• US Dollar (USD)
• Euro (EUR)
• Australian Dollar (AUD)
• Swiss Franc (CHF)
• Canadian Dollar (CAD)
• Japanese Yen (JPY)
• British Pound (GBP)

Although, there are lots of traders who trade in exotic currencies such as the baht or the Czech koruna, the majority of dealers trade the seven most liquid currency pairs across the world.

Let’s have a look at the major currency pairs
• USD/JPY (dollar/Japanese yen)
• GBP/USD (British pound/dollar)
• USD/CHF (dollar/Swiss franc)
• EUR/USD (euro/dollar)
• EUR/USD (euro/dollar)
• AUD/USD (Australian dollar/dollar)
• USD/CAD (dollar/Canadian dollar)
• NZD/USD (New Zealand dollar/dollar)
Now, the question is, what is the best currency pair to trade?
The answer is not easy, you cannot get the straight answer as it varies from trader to trader. Take some time and analyze different currency pairs which is best suits your strategy in the best possible way, it may depend on Forex session you take and may vary accordingly.
So, decide wisely which currency pair you should trade in Forex Market.

What are the differences between Forex and commodity trading?

Generally, commodity market (also known as Comex) trades in goods such as, gold, silver, crude oil, coffee, cocoa and all the mined products. In global market, Forex is also shortened as FX which trades in currencies such as dollars, Euros, yen etc. Many of the analysis and approaches of both the markets can be stated as identical to one another. Whether you trade in Forex or commodity, you should feel yourself comfortable. Nothing in the world can be achieved without interest, hard work and passion.

The market which you prefer has a lot to do with your comfort level with the following factors:

Personal Choice

A number of people feel comfortable and relaxed with certain types of markets. Because, the commodity trading is physical market they can relate and communicate to, people feel easy and like to trade in this market.
As sugarcane and wheat can be seen in everyday life, many of the traders prefer commodities because they can connect to these things.

Differences in Regulation

The foreign exchange market is a slightly unregulated spot market and with such big volume it’s volatile like anything. On other hand commodity market are very regulated.

Leverage in Forex and Currency Market

There is a major amount of leverage in Foreign Exchange market and people don’t have to go through a complicated procedure to have it. All you need to do is fund a small amount or a few hundred dollars of account and you can have thousands of dollars in the end.
The commodity market also has an option of leverage but the leverage in forex trading is amazing.

Exchange Limits

While Forex is traded over-the-counters and with the help of brokers or in the interbank market, commodity trading can be done on exchange.
Commodity market has daily collection limits by trading on an exchange and these limits are called limit up or limit down and you cannot place a trade when these limits go beyond.

Compromise

If you are a trader and looking for an option you can probably trade commodity based currencies.
The commodity based currencies include Australian dollar, Canadian dollar, New Zealand Dollar, Russian Ruble, Colombian Peso and Peruvian Sol. As per history, the Australian dollar has an optimistic connection to the price of spot Gold (even if the strength of the connection varies eventually), the new Zealand economy correlate with the whole milk powder prices and the Canadian dollar has a positive connection with the price of crude oil.

Can You Really Become a Millionaire from Forex Trading?

I simply have 2 answers for this question

  1. Yes, you can
  2. No, you can not

Forex trading depends upon some of the special conditions alike all other business. Making money is really not easy, you simply have to go through some rules and conditions that you can apply to you and some strategies that work well.
It depends on how significantly you can apply your rules on yourself and work on that. If Someone has the proper condition, he can become rich and wealthy through Forex Trading. When he doesn’t have proper rules, conditions, and strategies he will do nothing but waste his time and money.
So, what are those conditions?
If you are in those who want to make millions with $5000 or even at $50000, then I have to tell you that you will have to experience a difficult journey.
But, as you know that even the word “impossible” has hidden ‘I am possible”!
So, everything is possible in the world.
Now, let’s talk about the conditions that occur during the journey.
Forex needs an extraordinary level of controlling your emotions, you have to be patient, relaxed as it can’t be done overnight, or even in one year. It’s not the game of short time.
You will face challenges in finding the right provider or broker for your profitable trading that doesn’t cheat you.
Wrong brokers will never let you grow in Forex Trading and make you consistent profit as in most of the cases your profit is their loss.
It is not a “get rich quick” deal.

Forex Trading is not an easy way of making money. It’s not a ‘become rich over the night’ scheme. You need discipline, passion, and sleepless nights to become a millionaire.
To make consistent profit in Forex trading, you have to go through some important stages.
It’s not a way that can make you a millionaire. It’s you, who has to follow the rules and conditions to be a millionaire.
To know how to Make consistent profit in forex or get a consistent profitable trades or become rich first you need a source of income that supports your currency investment. It means you should have an income that covers your expenses.
There are plenty of investment advisory companies in the market. Get proper education on, learning courses from them, keep on pra

What are the benefits of Forex Trading?

Forex simply stands for Foreign exchange trading or currency trading. It’s a large scale international market, and exceedingly liquid, with an extreme daily trading volume.  

There are many benefits as a result millions of traders attract to Forex market.

Let’s have a look at some of the unique advantages of Forex Market-

It’s a 24-Hour Market

The Forex market is global hence the trading is practically continuous as long as the market open somewhere in the world. Forex trading starts when it gets open in Australia on Sunday Evening and gets closed in New York on Friday.

There’s High Liquidity if we compare it with any other trading sector.

Liquidity is the capability of a wealth to get converted into cash quickly and without any price discount. In the forex market, it means that we can shift large amounts of money into minimal price movement.

You can use Leverage

Forex brokers permit traders to trade the market utilizing leverage, which is the capability to trade greater money in the market than what is really in your account. If you were to trade at 100:1 leverage, you can trade $100 on the market for every $1 which was in your account. It means you can manage the trade of $50,000 using only $1,000 of capital. 

There’s profit possible from rising and falling prices irrespective of the direction in which market is moving.

The Forex market doesn’t have any restrictions for directional trading. It means that if you think a certain currency pair is going accelerate in value, you can actually buy and go along with it.

The same way, if you think that the value of a currency is going to decrease in value, you can sell it or go short.

Forex volatility

The towering volume of currency trades each day translates to billions of dollars every minute, which makes the price progress or movements of some currencies extremely volatile. 

The advantages of trading in the Forex market are significant and they keep newbies coming into the market every month. But forex traders need to balance those benefits with some of the risks involved. A 24*7 market can also mean that a little move can happen against you when you don’t concentrate on your trading and not watching the screen as happened with a flash crash. High volatility and volume can be a boon or a curse depending upon the how well one can manage things.

How Risky Is Forex Trading?

Like any other business, Forex trading involves risk. The market of currency may practice sharp variation, just like the stock, bond and commodity markets. Hence, the Forex traders are advised to consult an investment advisory company before making any transactions or diving into the Forex trading.
With regards to specific risks, the Forex market can present investors some less liquidity risk because of this specific market’s top liquid nature. You should also be aware of some fraud broker in the market who promise to give you 80% to 90% profit.
It’s important to have knowledge that the huge majority of Forex transactions are made by banks and not the individuals and they are actually trading in Forex to decrease the risk of currency fluctuation. They actually use some complicated algorithms in their computerized trading systems to maintain risk management. Any business that provides possible profit also has shortcoming risk. You can also lose much more than what you invested in your business.
Let’s have a look at some of the risk factors that you can face in Forex trading
• Exchange Rate Risk
• Interest Rate Risk
• Replacement risk
• Settlement risk

Let’s know in brief:

  1. Exchange rate risk
    This risk is caused by changes in the value of currencies. It is based on the consequences of the consistent volatile shifts in the unline demand and supply and demand balance.
    The most familiar tactic executed in trading is cutting losses and riding profitable positions so that we can see the losses are kept in manageable limits.
    Let’s have a look at some of the important methodology.
    (a) The position limit
    (b) The cross limit
    (c) Simple risk ratios
  2. The Interest rate risk
    The Interest rate risk specifies to the profit and loss produced by the variations in the forward spreads. This risk is related to currency swaps.
  3. Replacement risk
    This risk arises when Forex brokers find that they are at risk of not receiving their funds from the failed bank.
  4. Settlement risk
    Settlement risk takes place because of the dissimilarity of time zones on a different continent.
    Well, the risk is everywhere, whether you invest in trading or in any business. You will have set the right strategy and act accordingly. You need discipline, patience, compassion, and rules on yourself to get success. Because these are the key to your success.

Why should I trade in Forex? 

The Forex Market is getting popular day by day but the question is, why? What makes people attract to Forex?

Let’s look at the few suggestions to answer that question:

Size: Let’s begin with the most understandable thing. The size of the Forex Market is unparalleled and exceptional by any other market. The daily trade estimated to be 2 trillion to 5 trillion daily in the Forex Market. This is what attracts most to the Forex Traders.

Accessibility: The Forex market is open 24*7, 5 days a week. The traders don’t have to wait for the Forex market to open. People can trade on currencies from anywhere, anytime. This is the most beneficial thing about Forex trading that trader can access their account online from any device from anywhere on the globe.

Leverage: This is something tricky. The Forex market has an exceptional feature in terms of what it provides to simple traders. You don’t need a huge account to make a huge profit you can trade with a tiny account as well. There are lots of brokers in the market who offer 100:1 leverage on your investment. And this is what makes it huge downside of the Forex market

Volatility: The Forex market is unstable and rarely stands still. It makes large movements and keeps moving always. A trader can make a huge profit in the forex market if the trading is done strategically.

Profitability: No matter to which direction the market is going you can always make a profit. In Forex, a lot of money can be made even if the currency is going down, all markets don’t have this feature. Forex is a two-way market, you have to work with pairs, so if one currency is decreasing, it is obvious that another is increasing. In the Forex Market, there is always a possibility to make a profit whether the currency is going up or going down.

Transparency: The transparency is always a benefit in Forex market when considering an investment. Have you ever faced with the danger of being surprised by this event or another that will have an effect on the market and it’s movements? In the Forex market what you can see is what you can profit. Evaluate the news, understand the charts, they don’t have a surprise. If you understand the thing that you are doing you can predict the direction of the market with relatively high percentage accuracy.

Some brilliant tips for the Forex Trading beginners

It’s necessary to review proven trading process and techniques constantly if you want to make profits in Forex trading on a regular basis.
Learn to limit your losses.
The technique of successful trading is not only dependent on making profit but also on avoiding losses. Your main objective should be the necessity to control drawbacks and avoid losing trades from considerably grind downing capital in any type of trading.
To decrease losses, most of the traders choose to use a significant plan with pre-arranged exits. Stop-loss orders can be used to control making stupid decisions while in a trade.
Furthermore, losses should not only be limited but all the situations must be evaluated consistently to assure that your total trading capital risk is minimum.
Know your limits before you open any position!
Never trade out of your budget, trade-in a limit that you can bear your losses and always maintain plenty of cash reserves. While evaluating the position, size and cash necessities, assure that funds for ongoing trades are not blended with capital for other purposes.
At the beginning of each month, it is important to set loss limits. The process should be stopped for that period when your loss limits are reached. Without a doubt, you should stop trading when your losses are higher than your gains. Stay back and take a short leave.
Start with a fresh and emotional controlled mind, judge your current trading tactics and evaluate your most recent trades to gain knowledge from your failures and go ahead.
Create your strategy and utilize it wisely.
It’s not easy to make good profits without knowing the fundamental and technical analysis. The best trades are those who can predict the deficiencies of their particular trade.
One thing, most importantly, just don’t use complex or advanced method because they are simply complex to understand and apply and you want to feel like a pro.
Avoid and abort your strategy straightly if it’s not suitable for your financial situation no matter how attractive it appears to be. Every strategy has a risk, isn’t it?
Learn to have patience
Trading needs analysis and judgment in advance. You must understand the initial trading, perfect timing, and knowledge of market trend.
Be attentive and stick to your plan!
Success will touch your feet when you create a constructive balance of hard work, sound judgment, and patience. Don’t give up just because you lost some of your trades. Learn and observe various required methods for profitable trading.

Is forex trading profitable for a part-time gig?

Yes, definitely even an irregular Forex Trading can be a great and successful way to enhance your source of income.
There’s a saying that, where there’s a will there’s a way. It means if you can steal some quality time from your day to trade in this possibly profitable market, you can definitely make some potential profit to supplement your source of income even if you are holding a full-time job. Use a strategy that works well and for long.
Finding the Right Pairs to Trade

I agree that the forex trading arises 24 hours a day throughout the week, it’s great to trade during the mountain volume hours to specify liquidity. Liquidity is a trader’s aptitude to sell a position, which is much easier when the market is most active.
Let’s assume that you are a full-time job holder and you cannot be available for the trading all the time. You can only be available either in day or late in the day. So, it can be of great benefit to you.
For the traders who are beginners lacking experience and have small accounts, they should trade with US currency against lots of various foreign currencies. The wisest decision for the people who are job holder should be to trade Forex as a secondary option.
Let’s see the most tradable currencies
• USD/EUR
• USD/JPY
• USD/GBP
• USD/CHF
• USD/CAD
• USD/AUD
For the people who are Trading Forex as a secondary option but have great experience, the following currency pairs also offer high liquidity.
• EUR/GPB
• EUR/JPY
• EUR/CHF
The trading experts advice trading only the USD/EUR pair for the people who have a small account and not trading as a full-time trader. USD/EUR pair is traded repeatedly as plenty of information available on these currencies across all forms of media.

  1. Apply Disciplined Decision-Making

Trading discipline is most important to get success who refuse to automated systems and apply their own decisions.
Amateur traders are advised to have a try and make profit instead of hoping to get profit.
Unprofessional traders who have a few and no experience are advised to start trading with small amount.
Great strategy, dispassion, discipline and trading the suitable currency pairs based on your daily availability are the property of a successful trader.
The automated trading program is suggested for the beginners who have lack of knowledge about Forex Trading.
Well there’s no guarantee that you will always make profit due to the unstable nature profitable market. So, it is advised to learn, be knowledgeable, disciplined and control on your emotions.

How does Forex Trading Works?

Foreign exchange is No doubt the biggest financial market in the world with a daily turnover of $5 trillion, this industry keep growing everyday ever since it exists Foreign exchange or simply Forex is the trading of currency pairs.

Foreign exchange is No doubt the biggest financial market in the world with a daily turnover of $5 trillion, this industry keep growing everyday ever since it exists Foreign exchange or simply Forex is the trading of currency pairs. 
Over the period of time Forex trading has been a popular choice of traders and investors who seeks to make profits in this market by buying or selling a particular asset in less time. Since Forex trading is highly rewarding due to its high volume, volatility and leverage, traders often look to create great profits even with small price fluctuations. So how does this works? 
Well, In order to make profits in Forex, a trader needs to know the basics of fundamental analysis as well as technical analysis. When put together, traders come up with strategies that are highly rewarding.


There are hundreds of brokers out there who offer trading in the currency market and mainly, Day trading in the Forex Market has been a choice for many traders. 
Unlike the traditional stock market, the Forex market is open 24 hours a day and 5 days a week and nowadays it is mostly traded online. Hence, one can simply trade sitting at the comfort anywhere, with just a computer/laptop/phone and a stable internet connection. 
There are various types of trading methods that can be applied in Forex such as 
Day trading, Swing trading, Scalping and long term investment. 
Day trading is where you open your position with an aim to close it on the same day. However, there is no obligation to keep your position open as long as you desire. 
Swing traders are tend to trade in the direction of the trend and often enter their positions when a swing in the trend is confirmed. 
Scalpers on the other hand have a tendency to take multiple trades of small profits. Every trader in the world at some point has tried each of these methods and settled with the one that suits them the best. 
Trading in the financial markets involves high risk and one must take proper education before trading with some real cash. In terms of education, there are institutions, agencies, online websites, video tutorials and forums that provide huge amount of knowledge about Forex trading and most of this can be accessed for free. 
So if you are excited about trying out the Forex market, make sure you get a proper knowledge and understanding of it and then definitely you can take a step into this industry. Always remember, Forex trading is no gambling. Hence, this has to be treated as a serious business. 
Proper knowledge, guidance, and experience will definitely make you a successful Forex trader. 
Conclusion: 
Based on our years of experience, Trades Factory consistently scrutinize the market. We are passionate about serving our clients sensibly with the latest innovations in Forex tools and resources to train you in trading.