Forex Trading Platforms - 3 Questions To Ask When Comparing Trading Platforms

Assuming you've already done you initial research into forex, and understand the basics and the risks involved, you'll probably start searching for a forex trading platform next. Here are three questions to ask when comparing your options to help you make the best choice for your situation.

Tip #1: Is A Demo Account Provided?

Almost every company that offers a forex trading platform will provide a demo account for you to practice and learn on first. Stay away from any trading platform that does not provide this option. It is in every company's best interest for you to learn to trade as well as possible, and demo accounts are one way of encouraging this. Also, once you've chosen your platform, make certain to actually use the demo account first before risking any actual capital.

Tip #2: Is Solid Training And Responsive Support Included?

No matter which platform you choose, you'll likely need some help along the way. See how much training information is offered by the company. Make sure they have a support email and phone number - and test them out. Call and email with a few questions, and see how fast they respond - and how helpful their responses are. This will give you a good indication of the type of personal service you'll be getting if you decide to invest in their platform. Beware of any company that provides canned responses on the phone, or boilerplate email replies.

Tip #3: What Is The Minimum Amount You Can Start With?

Once you've narrowed down your choices with the questions above, you'll need to find out which platform will let you effectively trade with the amount of money you have to initially invest. Keep in mind, although you'll be able to trade larger amounts if you have larger amount to start with - never risk more than you can afford to lose.

Day Trading - What is It?

Day trading is basically the buying and selling of stocks over a relatively short period of time, sometimes minutes. It was once only available to floor traders and investment banks but now the Internet has made day trading accessible to anyone with a computer system. There is good money to be made (and lost) using this method.

As an example, a day trader might buy 1000 shares of stock A at 10:00 as the price begins to move upwards on good news, then sell it at 10:04 when the stock price has risen (for example, by $0.50). The day trader would make $500 profit, less his commission which with today's low commission rates of around $30 or less per trade, that's a nice $440 or better, excluding taxes.

Day trading usually follows one of two approaches, either beating the spread or attempting to catch short term trends. The spread is the difference between what is being offered for a stock (the bid) and the price being asked for the stock (the ask). With spread trading, you attempt to buy at the 'bid' and sell at the 'ask' as many times as possible. Spread traders can make hundreds of this type of trade every day.

ECNs or Electronic Communication Networks are a recent development. They are completely electronic exchanges with very low commissions and very fast execution of orders. As a method of encouraging traders to use their networks, some ECNs offer incentives in the form of a rebate. In some cases, this can allow a day trader to make money simply from buying and selling a stock at the same price.

Day trading can be very profitable if you get it right, but you need to research as much as possible and take advantage of the free simulation software that is available for you to practice with before you take the plunge. Remember, day trading isn't for the faint hearted!

Factors in Choosing a Forex Trading Broker

Before you can implement any of your Forex trading strategies, you must select an appropriate broker. However, keep in mind that not all brokers are created equal. Below are several factors to take into consideration.

Industry Experience - It's always a good idea to see how long your broker has been in business. Investigating the background of any particular firm will give you a good sense of their professionalism and that your money is not at risk unnecessarily. You should always choose a firm that is established and has a strong reputation in the industry.

Demo Account - Especially if you're a beginner, you need to familiarize yourself with the mechanics of how the broker operates. You should always use a broker that offers a free demo account so that you can test out your Forex trading system. These accounts usually come with all the research tools that are important for your Forex education. It's always an intelligent idea to test our your system, their trading platform, and your comfort level before you start Forex trading in earnest.

Forex Trading Spread - When choosing a broker, it is important to take in to consideration the spread. In Forex trading, the spread is the difference a currency is being offered to be purchased and the price it is offered to be sold. Brokers make their money on this difference. The smaller the spread, the better it is for you. It's always best to choose a brokerage that offers the smallest spread in order to maximize your currency trading strategies.

Leverage in Forex Trading- Almost all brokers allow you to trade at a level much higher than the amount of funds in your account, often hundreds of times this amount. If you are confident in your Forex trading techniques, the higher the leverage a broker offers you, the greater your profits will be.

Forex Trading Tools - Most brokerage will allow you access to a variety of research tools. However, keep in mind that the quantity and quality can vary greatly. Regardless of the broker you choose for your Forex trading, you need real-time quotes, various charting possibilities, professional research reports, and live news capabilities. If you are a novice and unfamiliar with computers, then you might want to choose a brokerage with easy-to-use software.

Whoever you choose for your currency trading purposes, you should always be well prepared before you start. Educate yourself, practice, and test out all your strategies beforehand. No one ever succeeds in Forex trading without being well-prepared first.

Forex Trading With Candlesticks

With everything that is at stake when you are trading Forex, it is only logical that you would want the best tools available to help you. Forex trading is the epitome of volatile trading and even the best trading systems seem to fail eventually. This is why over 90% of new forex traders blow through their accounts and go bust. Don't get me wrong, volatility is a good thing and can lead to quick profits. But we have to remember that the same effect can also lead to quick losses.

So now that I have stated the obvious you are asking yourself what is needed to analyze a currency chart and that is the purpose of this article. When we analyze a chart we need only look for signals that indicate one of two emotions; fear and greed. These two emotions are found quite frequently in forex markets due to the high leverage and quick gains or losses. By using a trading system like Japanese Candlesticks with your trading plan and research, you are giving yourself the best chance for success in Forex trading.

What's so different about candlestick trading forex? When you are watching your favorite chart as the market moves it's easy to forget that what we are watching are the collective trading activities of every trader, both institutional and individual, leaving their tracks for us to interpret on the chart. This is very important and I want you to stop and think about it for a minute! No matter how small the timeframe, the chart will show us not only the collective trading activity but the collective emotions as well. Fear, greed and uncertainty are easy to spot with the use and understanding of candlesticks and are also easy to learn.

Japanese Candlesticks have been around for centuries and have proven their effectiveness in all tradable markets. With forex however, we need to adjust our thinking a bit because the patterns form differently due to the fact that forex is traded twenty-four hours a day and there is no open or close to the trading day. Many traders are under the false misconception that candlestick trading won't work in forex due to this feature of the forex market. In actuality, there isn't a better market to use candlesticks than forex once you learn to spot the different nuances in the candlestick reversal patterns.

With everything at stake while trading forex it's time to stop relying on useless indicators and start concentrating on the chart itself. A candlestick chart if you want to learn to quickly asses the mood of the forex market. I urge you to spend a little time studying forex candlestick trading and see for yourself how easy it is to spot these changing tides of emotions that lead to price moves and reversals.