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Interested in forex trading?

Then you will need a few necessary tools to enable you contact other traders, get market information, and garner information to assist you make profitable trade decisions.

Choosing these tools can be a complicated process especially for a beginner.

Here is a simplified guide on how to make appropriate choices for forex trading tools.

1. Broker

The first tool you need is a brokerage firm that will connect you to the rest of the market. When choosing a broker, the first thing you need to keep in mind is that the very lucrative forex market has its fair share of scam artists.

Conduct due diligence and give primary consideration to firms that are registered under reputable authorities.

There are some reputable firms which are not registered by these authorities so that they can pass the savings they make by offering traders highly competitive prices and spreads.

Thus, registration or lack thereof should not be the sole determining factor. If you personally know of a trustworthy trader in your family or social circles you can ask them for recommendations.

Click here to read an informative guide on how to choose the best broker.

2. Platform

While the broker is your connection to the forex market, the platform is window where all your transactions will take place. Most forex brokerages offer multiple trading platforms and some can be connected across multiple devices.

To make your choice of trading platform, you need to ask yourself a few important questions. For instance, will you be using a shared computer?

If yes, then you are better off trading using a web-based platform that can be accessed from any computer without having to download or install programs.

If no, then you better go with a platform that can be downloaded, installed, and personalized for a better trading experience. Another consideration is whether you will be trading on the go.

There are various mobile platforms designed to work well with SmartPhones, iPhones, iPads, and tablets. However, some of these mobile platforms do not have the full features and capabilities you may find on the desktop platform.

3. Charts

Of course you will need price charts for your traded currency pairs. There are all kinds of price charts and your choice should be determined by which one you can understand best and the kind of timeframes you will be trading.

You may also want charts that feature a specific type of market analysis or charts that feature a combination of multiple analysis methods.

Additionally, most traders nowadays prefer charts that are combined with trading features, such that by clicking on the charts you can directly place your orders without necessarily going to the platform’s mainframe.

Moreover, other desired features include chart drawing tools that enable traders draw support and resistance lines across the price charts.

4. Signals and Indicators

Once you have your forex trading plan, you can check whether the platform you choose has the relevant indicators, oscillators, and trade signals. If not, check whether you can create your own and code them into your platform.

Various merchants also offer signal subscriptions that you can import into your charts and platform. To choose from all the available signal providers take your time to study each of them.

Many on the market are unreliable while some give outdated information in this time sensitive investment field.

Check for online ratings and reviews for some of the best signal providers and only go with those that offer a trial period. Otherwise you might be stuck with a subscription that adds no value to your trades.

5. News Feeds

Most trading platforms send out economic and financial news feeds to their traders. These are usually from reliable sources such as Dow Jones. However, not all economic news is relevant for your particular currency pair.

Decide what kind of news feeds will contribute positively to your making wise trade decisions involving your currency pair before you subscribe. If available, use the filter features to only receive what is relevant for you.

6. Bots

Automated trading is all the rave when it comes to online trading. The search for a fool-proof trading robot that will return profits with every trade has been ongoing ever since the first online broker started trading. Unfortunately, that search will seemingly continue for a long time.

You will receive many enticing offers to use many different kinds of automated systems. If interested, be very careful on how you pick.

Scammers have taken advantage of the interest in robots to create malicious software that captures financial information from unsuspecting traders.

Ensure that you are dealing with a genuine provider before you engage their products. If a money back warranty is offered and a trial period, then that is best.

If you are satisfied on security issues and performance, check that the bot is compatible with your platform. Most of them are specifically designed to work with particular platforms and will not work well with others.

Conclusion

While the mentioned list contains the most commonly used tools in online forex trading, it is not a comprehensive list. There are many other tools with claims of making your trading an extremely profitable no-brainer.

Some perform relatively well than others while some are outright scams. Beware of merchants who hide their identity as they are most likely to sell you malware that will infect your platform and steal your credit card information.

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Forex trading involves the exchange of different currencies against each other through a broker or a market maker. Anyone can decide to trade in forex as long as you have what it takes but there is no guarantee that you are going to make profits.

Sometimes people suffer losses and only the strong forge ahead to realize their goals. As in every other business, there are beginners and professionals and the same goes for forex trading.

The professional forex traders have devised ways of winning. For instance, they keep a keen eye on the changes in the market and act quickly according to how the market changes.

They know that time, patience, knowledge, and resources are some of the important things that are required to win in this game.

Every professional also knows that it is not about what the news says about the forex exchange trend but instead it is about the pricing at hand. Every trader should have a strategy set and should follow it strictly in order to achieve the set goals.

Some of the ways that forex trade professionals use to win may seem simple but only a focused trader can make it on the top bar.

Some of the rules they follow include:

1. Time Management

Professional Forex Traders are effective time managers. They seem to know the pain of losing one minute. To them losing one minute may equate to loss of money.

Unlike beginners, professional forex traders do not take time on analyzing the trend of forex on a daily basis neither do they trade on short time charts instead they exert their energy by looking at the bigger picture of the forex market.

Equipped with the experience they have in this trade, they are able to place their orders with a clear mind by setting their goals on a long term basis and not the hourly rates.

2. Focus

In order to be ranked at the top on the forex market, it is important to always remain focused. Most professional traders are people who know exactly what they want and will therefore remain focused on their goal and not succumb to being swayed by any little change.

They stand firm whether they lose or win. An amateur trader is sure to be shaken a little bit when he realizes a loss but a professional knows that in forex trade, sometimes you lose other times you win and will therefore not get his eyes off the prize because of a loss no matter the magnitude.

3. Strategy

Professional traders are known to be strategic personnel. Most new entrants in the currency trading believe that by getting involved in many trades they are set to making big money within a short time.

A professional trader on the other hand knows it is not about the number of trades you order but about the strategy you create in making your orders.

Professional traders will trade less frequently because more often than not, they will pick higher time frame trades that ensure they don’t make their orders frequently but still make more money in the end.

It is not the number of times you place orders but when and how.

4. Patience

Patience is a virtue that any trader in any business must possess. Professional traders in the forex market must have mastered the art of patience.

People believe that professional traders do not make losses. The truth is that they do, sometimes they incur massive losses but only the patient ones make it in the end.

The professionals know that in order to succeed you have to lose a few times and will therefore continue trading even after a loss. One of the biggest differences between a professional trader and an amateur trader is that while an amateur might give up after a loss, a professional will still allocate his capital to cover his margins and risks until they win.

A professional keeps his emotions away from his business, does not let his emotions take a toll on him and remains cool, level headed, and patient until he starts gaining. That is why professional traders always stand to win all the time.

5.  Networking

The professionals in this game actually know each other and will therefore network with others to know how the market is trending.

They meet either offline or on online forums and discuss about currency trading and help each other out and advise one another on how to improve their trades and increase their chances of winning it big.

Most of these professionals do not view forex trading as a hobby or a part time job instead they take it as a full time career, a profession they have always desired and that is one way they have ensured they stay at the top of the game.

These professionals have also mastered the art of adaptation. Sometimes the trading may be off course and this is the time they work hard to make adjustments and fit into the current situation.

Summary

If you are thinking of becoming a professional trader in the forex market, the time is now. You have to understand that currency trading is a complex venture that only requires complex strategies to pull through it.

Since this is a venture that makes money, it is important not to view it as a money maker project. Instead, keep in mind that it is a profession like any other.

Treat it as the dream career that you have always wanted for a long time. Also, create a specific edge in the market place that will define you and that will help you climb the ranks as a professional trader.

One thing anyone who wishes to become a professional in the forex market must know is that it takes time and effort and some losses along the way before you can finally hit the top bar.

Persistence and continuous learning are the keystones of turning a novice into a professional.

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Forex trading ought to be regarded as an investment and not as a job replacement. Therefore, to succeed in the business of trading currencies, it is important you carry out thorough analysis of the market before executing any trade.

Analysis of the forex market entails predicting the price trend and identifying the best places to enter and exit the market.

There are three main types of analysis:

  1. Technical analysis
  2. Fundamental analysis
  3. Sentiment analysis
Which approach is best?

The truth is that among the three types of analysis, there is no approach that is better than the other.

Technical analysis, fundamental analysis, and sentiment analysis are all just different ways to look at the market.

The best approach is to combine all of them to get better trade ideas. Remember the keyword here is COMBINE.

It is important to note that fundamental factors shape sentiment, whereas technical analysis assists traders to visualize that sentiment and identify the best places to enter and exit the market.

All of the three work hand-in-hand to assist you in increasing your profits in forex trading.

You should not take side with anyone who is promoting one type of analysis while disregarding the others. If you find such type of one-sided extremists, run!

Let us take the following example that illustrates the danger of relying on one type of analysis:

You carry out technical analysis on the EUR/USD and identify a perfect set up for a long trade. You then decide to pull the trigger without a second thought on the trade.

However, almost immediately, the trade goes against you by 100 pips.  Little did you know that the U.S. is releasing the Non-Farm Payrolls data, which has come out better than expected.

Immediately, everyone’s sentiment towards U.S. economy becomes positive and this result in massive sell-off of the EUR/USD.

What would you do in such a case? Cry? Smash the screen of your computer?

If you want to become a professional forex trader, then you should know how to combine these three types of analysis when making trade decisions.

Remember that too much of something is not good; thus, if you focus on too much of one type of analysis, then your death as a forex trader may come sooner than you expected.

Summary

In trading forex, you should never rely on just one type of analysis, rather you must know how to balance the use of all of them for every trade decision you make.

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Forex trading is a global and highly lucrative market to trade in. According to recent estimates Forex has a daily turnover of over $5.3 trillion, making it the largest market in the world to trade in.  

Despite such a global phenomenon, a number of wild myths and misconception exist in public minds about what Forex is and how to be successful at trading in Forex.

The best Forex brokers always educate themselves about the realities of the Forex market and avoid the following myths:

1. Forex is a ‘Get Rich Quick’ Platform:

This misconception is all too common among inexperienced traders.  Best Forex brokers see this day-in-day-out, the misconception that Forex trading is easy and it is an easy way to make passive income.  

People often read a couple of books on the subject, set up a Forex account and assume they can begin making big money instantly. Many newbie traders go as far as assuming that they will be able to live off of the income from the Forex trading the begin.

Many marketers to push their wares, either in training or research products often create unrealistic expectations in people about becoming financially independent by working a few minutes or an hour or two a day.

2. The Higher the Leverage, the Greater the Return:

The availability of large leverage in Forex account is not a new phenomenon, yet it remains the least understood thing among Forest traders.  

Best Forex brokers will advise you to watch out for having too much leverage on your trades.

It is because although the potential rewards on the upside of high leverage are very profitable, most traders become blind to the idea that it also magnifies the risk associated with each up or down move with each pip.

3. The More Complex the Strategy, the More Money You Make:

There is an overwhelming misconception among Forex traders that complex strategy alone and technical is all they need to successfully make money in the Forex market.  

While best Forex brokers know that blindly relying on complex strategy in Forex trading can sometimes render catastrophic results and can even doom your entire portfolio.

Old hands and best Forex brokers remember the storied fall of Long-Term Capital Management, a company that blindly believed in their complex trading algorithms and strategies, also known as “Absolute Return” trading strategy designed by master mathematicians and PhDs.

The strategy brought them an unbelievable return of 40% per year before dramatically tallying up losses of £3.3 billion.

The best forex brokers know that the key to profitability in Forex lies in operating efficiently in Forex markets via minimal fees, low trade-related latency and practicing structured money management.  These strategies will provide healthier and more consistent returns than any sophisticated strategy.

4. The Forex Market is Rigged:

There is a consistent fear, myth or misconception in trader’s minds that Forex is rigged or is a giant scam against traders cooked up by the brokers.  

It is true that there are always some bad apples in any group that taint the reputation of the entire flock, but the best Forex broker has the best overall interest of the market at heart.  

How else could these many people trust a system to trade over $5 trillion every day? Yes, it is true that a Forex broker gets compensated via the bid-ask spread, which is the difference between the buying and the selling price, but this is clearly discussed with the clients before any trades are conducted.

5. You Need Lots of Money to Trade in Forex Markets:

Gone are the times when you need a minimum of a million dollars to begin trading on the Forex market.  You need not be a large brokerage firm or international bank to be able to trade foreign exchange.

With the advanced computer technologies, you can now trade on forex in your PJs in your living room.  You can even become a Forex trading services provider by becoming what they call a Forex white label service.

Forex brokerage accounts can now be opened for as little as $25 by anyone around the world.  With the help of an adequate internet connection and little money, you can trade currencies online from literally anywhere in the world.

Conclusion

In conclusion, there are many myths and misconceptions about who can be a Forex trader and how to become successful at Forex trading, but the realities are starkly different from those misconceptions.

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If you think about the right performance in the trading process, a lot of things are necessary.

Your trading edge will have to conclude strategies like a proper signal technique and proper selection of the profit targets.

Then the traders will also have to learn about the right placement of the stop-loss and take-profit. All of those are necessary for the right performance in the trading business.

When you will be able to make the right setups for the trades, there will be good executions. From there, the proper income is possible for a trader to make.

Then the traders will also have to learn about the right placement of the stop-loss and take-profit. All of those are necessary for the right performance in the trading business.

When you will be able to make the right setups for the trades, there will be good executions. From there, the proper income is possible for a trader to make.

In this article, we are going to talk about the right strategies implementation for the trading process.

All of them must be followed properly without thinking about the losses. Throughout the process of trading, the traders will be stable with the system from there. The right management of the trades will be possible.

From there, you can supply a very good performance for the currency trading platform like forex.

Determining your profit target

In the title of this article, we mentioned that you can be right from your side of the trading process. That is good for proper trade execution.

As the market will be a lot more volatile than any other financial markets in this world, the trading process will have to be disciplined.

That kind of performance will have to start with a proper selection of the profit target. If you want to deal with the signals, it is necessary.

You may think that your assumption may not be right in the beginning. It may be too much for the signal analysis.

If something happens like that, you can deal with that from the stop-losses and take-profit placement.

The benefit will come in another form and that would be proper control of the trades. First, the traders will have to learn about the right control of the trades.

So, try to make the right choice for your trades. Then go for a controlled performance.

Finding the mistakes in the system

You might have bought the best trading system in the world but there is no assurance you will make money from it. You need to back-test your trading strategy by using a forex trading demo account offered by reputed brokers like Rakuten.

Nothing is certain in the investment world. You have to be always ready to deal with unexpected incidents. At times, switch to the demo accounts so that you can find the faults in the system. Most importantly, you will have read on regular basis to make things work in this industry.

Finding the right signals

After the right selection of the trades, the traders will have to do the signal analysis. It will be done for the right placement of the trades. The right selection of the profit targets will have a good reference for the stop-losses and take-profits. The traders will have to manage pips from the market.

That will be done with the proper selection of the signals to trade with. In this process, the traders will also use their profit targets as a reference.

Thus, the working process will be very easy. Say, your profit target is about 2R and the risk is very minimal for your mind to handle. From there, the right performance is not very hard for the traders to maintain.

Following a simple trading plan

Besides the right thinking about the proper management of the trades, the traders will also have to maintain the method. It will define how long your trades will stay running in the market.

From there, your trading sessions will be designed. Also the stress limit will be depending on that. That is why we tell the novice traders to get into the swing trading process for a better experience in the business.

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Many people do not know but a small change from the mindset can be helpful for the traders.

The market is intense, the patterns are changing and every time there is a new pattern. All these make the analyses complex and people get lost in the pattern.

Though there are indicators and strategies, it all comes down to how effectively a mind is used to predict the trends.

After the trade has been placed, it is the most important time. If there are no distractions, he will again engage himself with the industry and make the analyses complex.

Sometimes, we need to distance ourselves to understand the volatility. This article will tell about small distractions and how they can be used to improve the performance.

Do not ignore the importance of a break as it can boost the chance of success.

Our minds needs rest

The first thing that is needed is rest. Without breaks, the mind works continuously and have a chance to break down. The patterns look simple but only investors know the battle. The moment money has been invested, it is inevitable that the direction will change.

What more surprising is, this does not happen in a demo account. Only in live accounts, the traders get to experience all the surprises.

After spending some hours, take a break and forget about this sector. Spend time with the family, read the newspaper. A common mistake is reading the same financial news on papers. Ignorance can be bliss as the more you try to understand the more complex it will seem.

Small breaks in trading

Many people become addicted to the trading profession and lose a significant portion of their investment. Just after closing a losing trade, they execute high-risk trades.

During this time distractions will save a huge amount of money. Distractions act like small break and allow the traders to analyze the important variables in SaxoTraderGo trading platform.

You are here to make money. So be prepared to work hard and learn about this market. Always remember, trading is not a short cut way to get rich.

It’s more like a business where you need to focus on long term strategy.

Mastering the art of trading is really easy but controlling your emotions is extremely hard. Learn to trade with patience or you will lose money like the majority of retail traders.

Get a hobby

A hobby can be proven effective in distracting the mind from the patterns and trends of the industry. The professionals never keep themselves busy all day long. They will get some work to do and through these hobbies, the tensions never get in the head.

Spending that time sitting will allow negative thoughts to come into the mindset. It can affect the strategy, start doubting the plan and can result in taking the wrong decisions.

Less is more in Forex, every investor is trying to get wealth but only the smart traders can find a winning trade. If there is no hobby, develop one to achieve the expected result.

Walk away from the chart

The chart is the tool that gives us the tensions. If you keep looking, the price will not come to your favor. Accept this and learn how to manage the volatility.

The mind will fancy to look back but simply walk away. Slowly, the patient will develop and this can help to make the profit. When the past trades no longer affect you, the performance gets improved by every trades.

Find the mistakes

There is no person who can have perfect investments. Every time, there is a small mistake and this explains why trading is a never-ending process.

If we kept on looking back to the past trades, we can never find the mistakes. Accept the mistakes as part of life and move forward.

A small distance from the market can make us better over time with more perfect strategies and techniques. To get the expected profit, distract yourself from the industry.

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MACD (pronounced “ MAC – dee“ or “M-A-C-D“) stands for Moving Average Convergence Divergence.

In forex trading, this popular and versatile tool is used for technical analysis. Majorly, it is used either as a trend or momentum indicator.

MACD was developed in 1979 by Gerald Appeal, who was an experienced trader and market technical analyst.

And, over the past few years, the use of MACD has become widespread among forex traders.

MACD calculates the difference between the 12 and the 26 exponential moving averages (EMAs). The 12-period exponential moving average is the faster one while the 26-period exponential moving average is the slower one.

The difference between the two moving averages is what is shown in a single line that is the MACD main line. Often, MACD indicators comprise of one extra line, which is a simple moving average of the main line. This moving average usually has the default setting of 9 in most trading platforms.

In MT4 trading platform, the default MACD lacks the main MACD line, but instead it has bars (histograms).

However, on other trading software, both the MACD main line and the MACD histogram are easily identifiable.

 Advantages of trading using MACD

One of the key reasons why most forex traders experience huge losses is because of being impatient.

Majority of traders are not patient enough to wait for a trade setup to develop to maturity. After glaring at their computer screens for an extended amount of time, they lose their patience and try to compel the market to obey them, instead of them obeying the market. As a result, they lose a lot of cash.

On the other hand, there is a group of traders who exit quickly winning trades with a small amount of profit.

They do so in the fear that the market may turn against them and erode the already won profits.  This means that they are not patient enough to remain in the trade till it hits the target. As a result, they limit the amount of returns per trade.

The good news is that MACD provides a good solution to this common problem. Since MACD is a lagging indicator, its delay compels you to wait more for sharp and clear signal.

As such, when you are waiting for a ripe opportunity to enter a trade or you’re already in a trade, you will not make hasty decisions.

From experience, we have learnt that there are some instances that other indicators and even the price chart indicate a trade opportunity but MACD gives the reverse – it indicates that waiting is still necessary to avoid going against the trend and causing unnecessary damage to the trading account.

There are also some other instances in which we think it is the right time to follow a trend but MACD makes us to re-think because it signifies that we are too late and the trend is worn out and may soon change its direction.

In this article, we will give you all the details on how to make MACD become a useful tool for your trading.

Uses of MACD in forex trading
  • Analyze momentum and measure the strength of the trend
  • Identify divergences between MACD and price to signal potential market turning points
  • MACD cross-over used for giving entry and exit signals

i)                    Analyze momentum and measure the strength of the trend

When MACD is plotted on a price chart, its use becomes clearer. As earlier mentioned, the histograms give the difference between the 12 and the 26 exponential moving averages.

On the chart below, 12 (aqua) and 26 (red) exponential moving averages are drawn.  On the chart, it is evident that any time the distance of these two moving averages become longer, the histograms are also longer.

And, any time these two moving averages cross each other, the length of the associated histograms is zero.

As it is evident on the chart, when there is bullish momentum, MACD bars go above the zero level. And, when there is bearish momentum, MACD bars go below the zero level.

MACD is also very helpful in measuring the strength of the trend. The zero level of the MACD determines the trend of the market.

If MACD is above the zero level, then it indicates an uptrend. On the other hand, if MACD is below the zero level, then it indicates a downtrend.

Importantly, MACD can help you avoid placing trades against the trend. Since MACD is said to be a lagging indicator, when you spot a reversal signal in the market and you want to take a position against the trend, the indicator advises you otherwise.

Therefore, you can use MACD in forex trading to your advantage.

ii)                   Identify divergences

Divergences are one of the prominent and reliable trading signals that MACD generates. Divergences are seen by comparing price action and the movement of the MACD indicator.

In the forex market, price and momentum usually move hand in hand. Therefore, if price is making higher highs, then the indicator giving momentum ought also to be making higher highs.

On the other hand, if price is making lower lows, then the indicator ought also to be making lower lows.

And, if this is not the case, then it implies that the price and the indicator are diverging from one another. This is what is referred to as ‘divergence.’

MACD divergence is seen when either price makes higher highs and MACD bars make lower highs (bearish divergence) or when price is making lower lows and the bars are making higher lows (bullish divergence).

Here is the rule: price will ultimately follow the MACD direction and will reverse to the downside or the upside, based on whether the divergence is bearish or bullish.

Nonetheless, we have realized that it’s not easy to know when the reversal to the MACD direction will take place.

Therefore, if you are impatient and enter a sell order immediately you spot a bearish MACD divergence, then you can be in for a big shock, as price may continue rising by numerous more candlesticks.

As such, it is advisable you enter a sell order when MACD divergence is followed by a good confirmation such as a clear break of a major support level.

MACD divergence normally appears towards the end of up trends or downtrends. Thus, it signifies a weakening trend or an imminent trend reversal.

iii)                MACD cross-over

To illustrate this better, we will use another version of MACD (It does not come with the metatrader platform).

Since there are two moving averages with different speeds, the quicker one (fast moving average) will clearly respond to price action than the less quick one (slow moving average).

If a new trend takes place, the quick line will respond first and ultimately cross the slower line. And, if this “cross-over” takes place, the quick line starts to diverge or move away from the less quick one.

This is what depicts that a new trend has emerged.

From the chart above, it is evident that the fast moving average closed below the slow moving average to rightly identify a new downtrend.

And, when the lines crossed one another, the histogram temporarily disappears because the difference between the lines at that moment is zero.

As the downtrend starts and the fast moving average moves away from the slow moving average, the histogram starts getting bigger. Thereby, this indicates a strong trend.

Here is MACD cross-over:

Therefore, you can use MACD cross-over points to identify places of entry and exit in the market.

For example, in the example above, you could reap big pips if you placed a long order immediately after the cross-over.

Summary

Just like with the majority of technical indicators available out there, it is important that you use MACD as a secondary indicator when trading currencies.

You should not use MACD the same way you use primary technical indicators such as trend lines, chart patterns etc.

It is essential that you use MACD in forex trading only for confirming the signals that your primary indicators are giving.

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Forex industry is growing fast. People all over the world find forex trading worth spending since it offers easy and profitable trading options to make money with a little investment.

If you are interested in this currency trade, you will need a forex broker to start with. When the options are many, it can easily confuse new traders. In this article, we will discuss two popular brokers, ECN and STP.

ECN Brokers

ECN brokers provide a clear view of the other side of a trade. It will enable the traders to know other parties who are interested in their trade that might be money managers, commercial banks, funds, or institutional traders.

However, you will have to pay for this transparency. ECN brokers have big expenses. Also, even the best ECN brokers are unable to provide micro-lots to their customers.

If some broker is claiming to offer micro-lots, then be sure that he is not a true ECN broker. True ECN brokers work in some specific conditions. They can enable you to start trading with a minimum amount.

ECN brokers offer a marketplace to enable all the participants including banks, individual traders, and market markets to trade against each other.

The best ECN brokers show the highest bid with the lowest offer. They reveal the market condition using a data window to display the order size. They offer the best possible spread and they do not mark-up spreads. They make their money from fees and commissions.

Benefits

• Better spreads deriving from different sources

• Higher liquidity & direct market

• Since the order is passed to other participants of the industry, ECN brokers cannot trade against their clients

• No conflict of interests

• The trades will remain unidentified on an ECN platform. That will help traders to execute a transaction that reflects the real market condition. They will not be guided by any strategies.

• No spread mark-up

• The executions will be carried out and the confirmation will come immediately

Cons

• You need to pay high fixed commission for each and every transaction

• You need to make a big deposit to open your account and to start trading

• Variable spreads will make it difficult to calculate stop-loss levels

• The platform is not user-friendly

STP Brokers

They pass your orders directly to a counterparty that might be STP broker, market broker, or even an ECN broker. They charge commission and also make money from the spreads.

The key benefit is that you will get both variable and fixed spreads with STP brokers. Also, they can trade against their clients, unlike ECN brokers. STP brokers are generally considered transparent.

They offer faster and better filling of their clients’ orders. The best STP brokers provide access to liquidity and interbank market structure.

Benefits

• Fast order processing and quick execution

• The correct price of the currency pairs

• Automatic execution of orders

• Clients will have the freedom to avoid quotes

• Less risk in comparison to other types of brokers

• Provide live market trends

Cons

• Price can change within a few seconds

• Major conflict interest

ECN vs STP: Which One Is Better?

From the above discussion, you might have an idea about both these types of brokers. Both have positive sides and negative impacts.

Before choosing any of them, it is important to understand your budget and objective.

For example, if you want to start investing in forex trade with a restricted budget, it is better to choose STP. STP brokers do not charge a high amount to open an account or to start trading.

Similarly, if you have a flexible budget and you want a transparent platform, you can consider choosing ECN.

ECN will charge more to open an account. As they make money from commissions, they will charge a decent commission for every transaction. However, they offer a number of opportunities to make money from forex trading.

Trading with STP brokers like FBS Markets will be easy and fast with quick order execution. However, they will be the clash of interests as they can trade against their clients. ECN brokers are better.

They do not trade against their clients and make the process completely transparent. Also, it is hard to find a true ECN broker in the current condition. You can find the one that combines both ECN and STP.

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Forex Trading Big by Bigtrader - 6M ago

Click here to open a trading account with FXVC.

FXVC is an online CFDs trading platform that is owned and operated by a Cyprus Investment Firm (CIF) referred to as Central Spot Trading (Cyprus) Ltd. The parent company operates under the license number 238/14 issued by the Cyprus Securities Exchange Commission (CySEC).

FXVC is an online CFDs trading platform that is owned and operated by a Cyprus Investment Firm (CIF) referred to as Central Spot Trading (Cyprus) Ltd. The parent company operates under the license number 238/14 issued by the Cyprus Securities Exchange Commission (CySEC).

The broker head office is located at Lophitis Business Centre, Office 102, 249, 28th October Street, Limassol, 3035 Cyprus. FXVC was established in 2018 by a group of financial professionals.

This group believed that each clients of a brokerage firm should be valued and treated well. It is for this particular reason that FXVC strive to offer its clients with the highest level of customer support and services.

Security and regulation

The FXVC brand is managed and owned by a Cyprus Investment Firm (CIF) called Centralspot Trading (Cyprus) Ltd. As a CIF based in Cyprus, Centralspot is regulated by the Cyprus Securities Exchange Commission (CySEC).

This mean FXVC operates by the strict regulatory requirements imposed by CySEC. One such requirement is the need to have segregated accounts for the clients.

In addition, FXVC is also required to have regular audits by an impartial third party to ensure it has sufficient liquidity are all times to meet its contractual obligations.

As a CySEC regulated broker, FXVC is also MiFID compliant and is a member of the Investor Compensation Scheme. Under this scheme, your funds are covered up to a maximum of 20,000 euros  in the event FXVC becomes insolvent.

Trading Platforms

For the trading platform at FXVC, the broker offers a proprietary trading platform that is accessible using any web browser. The platform is also available as a mobile trading app which can be downloaded from Google PlayStore.

FXVC Broker Account Types

There are two types of accounts at FXVC: a demo account and a standard account.

Demo Account

The demo account lets prospective clients of FXVC to try out the services offered by the broker without having to risk any real money.

It also lets beginner traders to get a sense of how live trading can feels like. Because you only trade with virtual money as opposed to real money, the demo account can also be used to test new trading strategies.

Islamic Account

To meet the trading needs of muslim traders who wish to trade the markets in compliance with Sharia law that prohibits the charging of interest, FXVC has made available swap free accounts to them. A swap free account does not incur or earn any interest on overnight positions.

Standard Accounts

Standard trading accounts are live trading accounts which clients of FXVC must open and fund before they can start trading the financial markets. At FXVC, there are 5 different of live trading accounts. They consist of the Basic account, Silver account, Gold account, Platinum account and VIP account.

Live trading accounts

FXVC has different types of trading accounts to suit different category of traders.

1. Basic account

This type of account is geared towards novices and beginners. It has the lowest minimum deposit requirement which is 500 euros.

This type of account gives the account holder access to 305 different types of instruments. This account also comes with a Widget Analysis Alert.

2. Silver account

  • Minimum deposit 5000 euros
  • 305 tradable assets
  • Widget Analysis Alert
  • Forex Ebook + Videos
  • Daily/Weekly Market Review
  • Dedicated Client Relationship Manager
  • Email Analysis Research Alert
  • Personalized Trader’s Education
  • Chapter 1 – Terminologies

3. Gold account

  • Minimum deposit 10,000 euros
  • 305 tradable assets
  • Widget Analysis Alert
  • Forex Ebook & Videos
  • Daily/Weekly Market Review
  • Dedicated Client Relationship Manager
  • Email Analysis Research Alert
  • SMS Analysis Research Alert
  • Personalized Trader’s Education
  • Chapter 1 – Terminologies
  • Chapter 2 – How to use Trading Central Research

4. Platinum account

  • Minimum deposit 25,000 euros
  • 305 tradable assets
  • Widget Analysis Alert
  • Forex Ebook + Videos
  • Daily/Weekly Market Review
  • Dedicated Client Relationship Manager
  • Email Analysis Research Alert
  • SMS Analysis Research Alert
  • Personalized Trader’s Education
  • Chapter 1 – Terminologies
  • Chapter 2 – How to use Trading Central Research
  • Chapter 3 – Risk & Money Management Tool
  • Chapter 4 – Economic Calendar
  • Loyalty Store
  • Lower spreads

5. VIP account

  • Minimum deposit 100,000 euros
  • 305 tradable assets
  • Widget Analysis Alert
  • Forex Ebook + Videos
  • Daily/Weekly Market Review
  • Dedicated Client Relationship Agent
  • Email Analysis Research Alert
  • SMS Analysis Research Alert
  • Personalized Trader’s Education
  • Chapter 1 – Terminologies
  • Chapter 2 – How to use Trading Central Research
  • Chapter 3 – Risk & Money Management Tool
  • Chapter 4 – Economic Calendar
  • Chapter 5 – Time frame & Candlestick analysis
  • Chapter 6 – Support & Resistance Indicators
  • Chapter 7 – Price Patterns
  • Loyalty Store
  • Lower spreads
Deposit and withdrawal at FXVC

With FXVC, you have several options for making deposits and withdrawals. The available methods include the following:

  • Major Credit/Debit cards
  • Bank Wire Transfer
  • Electronic Fund Transfer
  • Skrill

The processing time for deposits is near instantaneous. Withdrawals on the other hand take around 1 business days to be processed and completed in a time frame ranging from 5 to 7 business days.

Education, customer support, and supported languages

Customer support at FXVC is top notch as the broker takes the welfare of its clients very seriously.

The support service is available in multiple languages and can be accessed through email, live chat and the telephone from Monday to Friday (5am to 5pm GMT time).

Other means of support at FXVC include a comprehensive trader’s education package and a FAQ page.

Advantages of FXVC Broker
  • Comprehensive Trader’s education
  • CySEC Regulated Broker
  • Dedicated Support
  • Wide range of trading assets
Disadvantages of FXVC Broker
  • Higher than normal minimum deposit requirement
  • No Support for MT4 trading platform
Conclusion

Our review of FXVC shows that the broker is a dependable broker for both beginners and experienced traders.

While the broker is fairly new, it is regulated and gives proper protection to its clients in terms of regulatory oversight as well as coverage under the Investor Compensation scheme.

Although FXVC does not support the MetaTrader 4 trading platform, its proprietary trading platform is more than sufficient to meet the needs of even the most experienced trader.

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The forex industry is dynamic and numerous changes have taken place in the market over time. And, two of the most recent developments are the MiFID II directive in 2017, which sought to regulate the levels of transparency to greater heights and the growth of cryptocurrency space.

The new directive is designed to influence and augment investor protection by ensuring increased transparency in trade assets such as fixed incomes, exchange-traded funds, equities and foreign exchange with the aim of tightening control over the forex industry.

The MiFID II directive of 2017 has forced some European traders to seek other businesses and trade offshore in jurisdictions that are less regulated. Those who were keen to continue offering services in Europe have had to adjust their businesses to match the set regulation requirements.

The cryptocurrency craze has been catching up, and in 2017 it gained ground pretty fast. More and more people have been venturing into the crypto world globally as the digital currency gains popularity.

Bitcoin and other cryptocurrencies have been more attractive to investors due to their volatility which enables the investors to anticipate extraordinary profits that are unlikely on other financial markets.

Digital platforms have been emerging over time enabling traders to conveniently offer their clients the opportunity to grow their investments in the crypto world.

Incorporation of Cryptocurrency into the Forex Industry

The innovative blockchain technology has led to several changes in the financial markets—similar to the way Netflix changed the film industry and social media disrupted the internet.

Cryptocurrency experts refer to it as the “digital gold” and believe that the technology will change the course of business in the next 5 to 10 years. The Blockchain refers to an incorruptible ledger that exists in the digital space to improve transactions between parties in the financial world as a result of enhanced trading conditions.

The blockchain is not limited to the financial sector. As much as the technology is helpful in the forex industry, it is embraced in various sectors of the economy, from health to the legal sector, to the environmental industry, and so on.

Cryptocurrencies are popularly used as a short-term means of payment and are useful instruments for simplifying Know Your Client (KYC) on one hand and curbing Money Laundering on the other.

For example, the European Legal framework seeks to incorporate cryptocurrencies in their system to maximize the benefits of digital currencies and enlarge the list of instruments available for investment portfolios.

Present-Day Trends in the Forex Market

Investors have been embracing more civilized trading recently, forcing small brokerage firms operating under quasi-legal schemes to close shop.

Traders are now concerned with the types of products and services availed to clients and proprietary technologies used by companies as opposed to earlier trends where they were more interested in the bonuses and the number of rebates offered by a company.

In recent times, the web tunnel has made it possible for trading to take place in different markets after multi-asset cloud platforms were cropped up.

The blockchain technology has made it possible for investors to track information as traders share results of trading signals and trading charts.

This has led to the increase in social trading services enabling inexperienced businessmen or new entrants into the forex market to trade and achieve similar results to experienced traders.

The use of algorithmic trading in the forex market has also enabled unskilled traders in the programming field to develop their own trading robots, controlling the technical aspects of forex trading and automating routine activities.

Forex in 2018 and Beyond

The European forex market has room for expansion now that the numerous brokers who had been operating under quasi-legal systems have been faced out to offshore jurisdictions.

Thanks to the new MiFID II, consolidation of market players and improved transparency have made the forex market more attractive to clients with high expectations of a stronger financial space.

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