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What is the Bid-Ask Spread in Trading?

Trading involves tight margins. As such, it is important to know the spread of a trading pair. Understanding this is important because the spread is a factor of liquidity—the ease of converting from one currency to another. What, then, is the 'spread'? It is the difference between the ask (buying price) and the bid (selling price) of a currency pair.

How Brokers Fight Fraudsters

If it's money, there are always folks who want to acquire them in devious ways. There are perhaps millions of fraudsters and scammers out there, targeting both brokers and traders. If you are a trader, there are various ways of countering scammers—one is reporting these fraudulent schemes to the police. On the other hand, Forex Brokers have robust systems to squash fraudsters and bring them to book.

Why VIX is Helpful for Traders

The Chicago Board Options Exchange (CBOE) VIX uses the S&P 500 Index to capture the expected volatility within the next 30 days. This, in turn, has a direct bearing on the trading community's view on the economy. VIX is also known as the 'fear index’. Volatility measures the rate of change of the underlying asset. In this case, it can be a stock, a commodity, or even an FX pair.

Everything you need to know about a countrys Forex Reserve

To get started, one should understand that Forex Reserves are assets—which may include gold, treasury bills, bonds, or more -- depending on the preference of the country's central bank. These assets are in foreign currencies—mainly the USD—but can include Euro, GBP, Yuan, and even the Yen. The USD is mostly used because it is used for trade.

What is a Floating Exchange Rate?

Jumping straight in, a floating exchange rate is a style where the currency of a sovereign nation is determined by market forces relative to other currencies. Accordingly, the government through the central bank is barred from 'intervening’. In this pure arrangement, the USD price, for example, would fluctuate relative to the Euro/GBP/ZAR—and others, depending on their respective level of demand and supply.

What is the role of the Bank of International Settlements in Forex Trading?

Forex is a melting pot of financial activities. There are central banks, global banks, government, hedge funds, traders, and the BIS. The BIS is the bank of central banks, the bankers' bank expressly created to meet the financial needs of 56 member central banks. Besides providing gold and facilitating FX transactions, they also hold central bank reserves.

Did you know that Forex Brokers must comply with the following laws?

If anything, regulation is primal, more so in trading. Now, you have chosen a reliable and trusted Forex broker like Altum FX, but do you know just how thorough compliance means to them? At any time, for example, a regulated broker must have enough funds to cover their clients' investments. Besides, there shouldn't be a case where the broker fails to honor their contractual obligations with the client. If they fail and the client reports to the regulator, their license will be revoked.

Understanding Divergences

If you jumped in straight to the deep end, you'll by now understand how price action of various currencies pans out. Trends are not in straight lines, even if their respective fundamentals are rock-solid. Momentum matters in trading. From momentum—the pace of price change—users can pick out divergences. Divergences print out when the price action of a currency and signals of the secondary indicator 'clash’.

Fun Statistics about Forex

There is plenty of talk in Forex circles around profits, regulations, and whatnot. But what are the numbers behind the space? What makes Forex trading so super attractive? Well, first, Forex is the undisputed king of liquidity. Liquidity measures the ease of converting an asset to cash. Since we are dealing with money, it explains why Forex is the most liquid. Converting USD to Euro, for example, is in mere seconds.

How Technology is transforming the sector

Circle back to the 1960s or the 1970s, the era before the internet. Foreign trading was esoteric, only accessible to banks and the wealthy. FX wasn't devolved and liberal as it is. Thanks to technology, Forex is creating millions of opportunities for traders across the world. Because of new technology, such as blockchain, for example, there is flexibility and more freedom.

The Pros and Cons of Trading Bots

Forex is different from other markets because of its liquidity and participation levels. Because of the number of available pairs, signals can be overwhelming for manual traders, especially in lower time frames. As such, more traders would prefer to deploy Forex Trading Robots. These 'bots' often automate trading decisions. However, they can be programmed to perform other functions, not just trading.

Why Refusing to be wrong is a Poor Trading Strategy in Forex

Trading the Forex market is a skill nurtured over time. Yes, one may opt to use the skill of other traders and copy trades. However, if you have the time and patience to be one of those expert traders, you should know early on to befriend the market. It means not 'refusing to be wrong’. A trader may deploy a refined risk management strategy—stop loss, take profit, trailing stops, and continuously improve a strategy.

How will you benefit from trading with a regulated broker?

Trading is fun. The joy of acing a trade is incomparable. While the market moves fast, it means numerous opportunities. While some traders make money, some would move money. Provided they have a risk management strategy in place, their losses would be limited.

The Pros of FX Trading

Forex trading is fun and is just like any other economic activity. Therefore, while one may find active trading favorable, another trader may encounter unfavorable characteristics forcing them to deploy a different strategy. One of the main attractions of Forex trading is its accessibility. A trader, regardless of experience, can begin trading in less than 30 minutes.

What is Copy Trading in Forex?

Here's one thing: Trading from platforms such as MT5 is popular because of the broad user base. There are hundreds of thousands of traders at any one point actively looking to make money from the fast-paced FX markets. Some are experienced, others intermediate, and most newbies.

Do you Know that the Forex Market is Decentralized?

Comes across as odd, for some, but the FX market is technically decentralized but its players are regulatory compliant. The decentralization is because of the nature of its operation. Unlike traditional bourses, FX is continuous, operating 24/5. Operations from different market participants--including global banks, jurisdictions and time zones ensure trade every day of the week, except, of course the weekend.

Here are the three main methods of Forex Trading

The beauty of Forex is its global nature. Influenced by various fundamentals, and it is simply not short of fun. Talking of fun, do you know that Forex trading can take various forms? One way to trade Forex is from the spot market, where currencies are exchanged in real-time as per the current exchange rates.

These are the Worlds Richest Forex Traders

Executed right, Forex trading can help one make an enormous fortune. It makes sense; Forex is, after all, the world's deepest market, transacting trillions every day. Clipping a small percentage is enough to break a bank account and promote a trader to a billionaire's category. George Soros, who broke the GBP in 1992, is living proof. His bet against the GBP and the Bank of England in Black Wednesday paid off, earning him a cool $1 billion.

Understanding the Fibonacci Indicator

Trading is ever-evolving, diverse, and dense with remarkably skilled market participants. Different strategies apply, with the bottom line being making money. If anything, traders would always want to be money printers. The bad news is that the market rewards the patient and the skilled.

Understanding a Carry Trade

Forex traders benefit from price fluctuations of different currencies. Each of these currencies is influenced by several fundamental events. What's more, every central bank implements a monetary policy that suits its interests. Accordingly, interest rates vary between countries in line with their central bank's objectives. A 'carry' trade is a strategy that extracts value from differences in interest rates.

What is the best indicator to trade Forex?

The Forex market is the most liquid and deepest. Over $5 trillion is traded every day, according to the Bank of International Settlement (BIS). Traders across the world, therefore, seek to exploit market inefficiencies every day and profit. A natural question in all their efforts, therefore, is: Which is the best indicator to trade Forex? There are fundamental and technical indicators. Both are useful.

The Relationship Between Leverage, Pips, and Lots

When trading Forex, traders encounter different terms and acronyms that they must fully understand to become successful. There are already over 180 currencies across the globe. When trading them, you'll notice that they are available as pairs. There are the major and exotic pairs.

Forex Trading is Not a Pyramid Scheme

If you ask yourself whether Forex trading is a pyramid scheme, the short answer to this will be No. And it is crystal clear to see why. The Forex market is the largest globally, where trillions of dollars are moved every day between corporations, countries, and even individuals. Therefore, the involvement of governments means the scene is legal. Again, it is important to distinguish forex scams and other fraudulent schemes from approved and regulated Forex trading.

What Drives the Forex Market?

Market forces! That might be the first answer. Obvious, right? But that's true. The thing is, any global financial market is gauged by the level of market participants. The Forex exchange market is the world's deepest because of the millions, even billions of traders every day, bidding and asking on a variety of currencies.

Best Practice for Beginners

The truth is, Forex and crypto trading is not a quick-rich scheme or gambling. Forex requires patience and tact. It may take months or years before one becomes a successful trader. The bottom line is that a beginner Forex—or even crypto trader—has to start somewhere and develop some best practices to remain profitable.

What is a Re-Quote in Forex Trading?

Without getting into details, Forex traders say Requotes are unfair. True. They are. All we can say is that some brokers do requotes. And it happens when the market maker (working for the broker) doesn't want—or is unable-- to execute the order on the price you entered.

What is a Japanese Candlestick in Forex Trading?

Unfortunately, stuff that seems obvious can be disastrously deceiving. History is littered with lessons of how assumptions ruined people's lives. And most traders jumping into Forex can sometimes skip basics. Like crisply understanding the Japanese candlestick. For technical analysts, a Japanese candlestick is the center of all their analysts.

What are Trading Bots?

Trading can, at times, be very intensive. Then it gets even more challenging for more would-be traders. Before you start making money consistently, they must make ends meet and therefore maintain their day job. For those who aren't working, staying glued on your trading the whole day while keeping track of various trading charts can be overwhelming.

Which is Better: Day Trading or Long-Term Trading?

Different traders employ various strategies to achieve a given goal. It's like a business—but some do it for fun…envious? Fact is, regardless of time frame or strategy, both day and long-term traders make and lose money. Some long-term traders will have sour grapes if they try to trade short-term. In contrast, day traders wouldn't have the patience in the weekly or monthly charts, inadvertently losing money in the process.

Why Money Supply is an Essential Metric for Forex Traders

The Forex market is the most liquid as it is global. From this characteristic, there are equally high influencing factors that can impact market volatility and Forex traders' trading strategies. One of them is the money supply. In a more straightforward definition, the money supply is the total amount of money circulating in an economy at a point in time—including those in checking and saving accounts.

What are Economic Indicators in Trading?

According to data from the Bank of International Settlements (BIS), the Forex market is the world's most liquid, transacting over $5 trillion daily. It is a global phenomenon, easily explaining why the Forex traders keep track of the so-called 'leading economic indicators’.

Why Inflation Counts

The past year has been exciting and more of a roller coaster ride for traders. Due to the coronavirus pandemic and subsequent interventions, there was a recalibration where previously critical economic data were relegated. At the same time, those considered flaccid took prominence, forcing traders to keep tabs.
Coronavirus mitigation is critical for the Forex Market

Forex Explained: Why Coronavirus Mitigation is Critical

Did you know that the Coronavirus pandemic shaved over $3.75 trillion from the global economy in 2020? 

Forex Tip: Employment and GDP Now More Important than Interest Rate Changes

Forex fundamentals are as fluid and liquid as the underlying market. This shift is perfectly reflected in the market status and how central banks are scrambling to intervene for normalcy.

Forex Explained: What is Bond Purchase Tapering?

Know your FX Lingo. What exactly is meant by the term, Tapering?

How to Trade the News

News trading is an important part of any forex trader. We've prepared this article to help you understand what's involved in trading the news, the common strategies applied and what to expect. 
What is Forex

What is forex, exactly?

Want to know exactly what is forex? Jump right on in and check out our article, What is forex, exactly? We'll cover well, what forex is, and the key points you should know before beginning your trading journey. 
Candlestick Chart

Candlestick charts and how to read them

So, you’ve just started your trading journey and you’ve been using the charts available to you on the AltumFx MT5. However, you’ve been hearing the term 'candlesticks' and you’re not sure what a candelabra has to do with trading... Fear not, we've prepared this article for you to explain everything. 
Relative Strength Index

Technical Analysis 101: Relative Strength Index RSI

Our second article in our Technical Analysis 101 series. We look at the popular Relative Strength Index (RSI) and how you can use it to identify buy and sell signals.
Moving Averages

Technical Analysis 101: Moving Averages

The first article in our Technical Analysis 101 series. We look at the different types of moving averages and how to start using them in your market analysis.
Candlestick Chart Patterns

Candlestick chart patterns and how to use them

We discussed in our previous article what candlesticks are and why they’re so important in trading. Today, we’ll be tackling what the top 5 candlestick charts patterns are and what you can do to benefit from them.
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ISPASS Technologies Ltd, a software provider, is a registered company in Cyprus, with registration number HE394419 and has its registered address at Nikolaou Nikolaidi 3, Flat/Office 205, Paphos 8010, Cyprus.

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AltumFx does not accept residents of certain jurisdictions such as USA, Canada, Iran, North Korea and Russia.

Since AltumFX is not under the supervision of the JFSA or ESMA, it is not involved with any acts considered to be offering financial products and solicitation for financial services to Japan or in the European Union countries and this website is not aimed at residents in Japan or in the European Union countries.

Risk Warning: Trading any kind of financial instrument, including derivatives, carries a high level of risk and may result in the total loss of your investment. You should only trade with money you can afford to lose. Trading derivatives may not be suitable for all investors. By trading with AltumFx, you acknowledge your understanding of this risk warning and your agreement with the Terms and Conditions. AltumFx always recommends you seek independent advice if necessary.