WHY TRADE CURRENCIES?
Easy to understand
Exchanging currencies is as old as money itself. You are simply buying one and selling another because you believe the exchange rate will rise or fall.
Largest Market
The forex market is the largest financial market in the world, with an average daily trading volume of $6.6 trillion in April 2019.
Highly liquid
Due tohigh liquidity, this market can absorb substantial trades without significant movement, which is an advantage over a relatively illiquid asset class like penny stocks.
Cheaper to trade
The forex market offers affordability with tight spreads and often no commissions, making it advantageous for active traders and those increasing transaction sizes.
Available 24 hrs a day
The forex market operates continuously from Sunday to Friday, ensuring there's always an active session globally, unlike stock markets with shorter daily sessions.
Leverage
Forex trading offers leverage, enabling traders to control larger positions with a relatively small amount of capital, amplifying potential gains (but also risks).
About Tradewithconfidence
Find all Tradewithconfidence Brokers Reviews on our website with Ratings and Trust Scores. Our mission is to fact the Broker’s offering points that will help you to choose the best suitable Broker for own trading needs. Our Tradewithconfidence broker list is updated on a regular basis and includes Regulated Forex Brokers and Brokers to Avoid. Fund security is always first in Forex trading, that’s why we recommend opening an account with well-regulated brokers and avoid unregulated brokers at all cost.
Ways to read the main types of Forex Charts
1. Tick Charts
If you are just learning forex trading, this list should give you a good overview of how to read primary forex charts. You will find that certain forex charts give you more useful information than others. One trader might achieve soaring success using a tick chart while another hates reading tick charts and makes good money using candlestick charts.
While you may get recommendations from your friends or
colleagues, you should try all these charts until you find one that you feel works best. You should not feel you are attached to one chart that worked in the past if
2. Point and Figure Charts
One of the most popular types of charts used by professional forex traders is the point and figure chart. This allows them to filter exchange rate moves, identify clear support and resistance levels, and even trade-specific patterns. Like the tick chart, this type of chart does not have consistent time intervals on the x-axis, so it also allows a trader to focus purely on the exchange rate action. Point and figure charts are typically constructed on graph paper by using an X to fill a rising column of boxes and an O to fill a fallin column of boxes. Each box represents a specified value that the exchange rate has to attain to justify
3. Line Charts
• Line charts connect a set of single exchange rate observations taken per time period with a straight line. These charts most often use closing prices, although they could be drawn through high, low or opening prices instead. • Since line charts offer a relatively simplified picture of exchange rate movements, they can be used to identify overall trends and other large-scale patterns on charts. Unlike the tick chart, a line chart has an x-axis with fixed time intervals. • A line chart also helps you see short-term trends that can affect any asset. For example, you may see a steep decline related to a selloff, and you will see the
4. Bar Charts
• Bar charts show the high, low, open, and close for each time period which together form a bar. The high and the low are connected with a vertical line, while a small horizontal dash is shown at the open level protruding to the left. The closing level is shown by a horizontal dash to the left. These bars are not connected to each other like the data points that make up line and tick charts are, but they do give much more information. Like line charts, bar charts also have fixed intervals on the x-axis. Bar charts are particularly useful for identifying exchange rate gaps where the range of the first time period does not
5. Candlestick Charts
• Candlesticks chart are a Japanese invention that offers even more information than a bar chart because the color of the candle’s body signifies whether the market rose or fell
during the particular time period.
For example, a white body can be used to show a rising or
bullish candle, while a black body shows a falling (bearish)
candle. The vertical lines between the low and the open and between the close and the high are called wicks. Some candles have long wicks, others have short
ONE MARKET TO RULE THEM ALL
Often overlooked by retail traders, the massive forex market has become very accessible to just about anyone. All you need to start trading currencies is a relatively modern Internet-connected device and a modest deposit to use as margin. Once you achieve consistent profitability trading forex, even while operating in a small trading account, your strategy can scale up to produce even more profits in a much larger trading account. Yet, this sounds easier in theory than it is in practice. The forex market requires patience, planning and discipline. You will have to resist the temptation of entering a trade for the sake of simply being in the market. While the forex market is typically slower-paced than some other asset classes, like stocks or commodities, currency trading is not without perils. Violent movements (like the Swiss franc shock in January 2015) do happen, and you must remain vigilant when trading currencies. Using a regulated broker is the first step in the right direction, but ultimately, success in forex trading
