What is a forex robot?

A forex robot is a piece of software that analyzes the market based on settings entered by the user. A forex robot makes automated trades that can be carried out even as you sleep. Forex robots are a good way to trade a mechanical system that requires no human evaluation.

What is an Expert Advisor?

An Expert Advisor is a piece of software written specifically for the MetaTrader Platform. An Expert Advisor can just advise traders which trades to make or can be programmed to automatically execute the trades on a live account.
Expert Advisors are very flexible pieces of software that can take any information into account that is available on the metatrader platform. They are written in their own proprietary programming language called MetaQuotes Language Version 4.

What is Forex?

Foreign exchange market

From Wikipedia, the free encyclopedia

"Forex" redirects here. For the football club, see FC Forex Braşov.

Foreign exchange
Exchange rates Currency band Exchange rate Exchange rate regime Exchange rate flexibility Dollarization Fixed exchange rate Floating exchange rate Linked exchange rate Managed float regime
Markets Foreign exchange market Futures exchange Retail foreign exchange
Assets Currency Currency future Non-deliverable forward Foreign exchange swap Currency swap Foreign exchange option
Historical agreements Bretton Woods Conference Smithsonian Agreement Plaza Accord Louvre Accord
See also Bureau de change / currency exchange (office) Hard currency

The foreign exchange market (forex, FX, or currency market) is a global, worldwide-decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.^[1]
The foreign exchange market assists international trade and investment, by enabling currency conversion. For example, it permits a business in the United States to import goods from the United Kingdom and pay pound sterling, even though its income is in United States dollars. It also supports direct speculation in the value of currencies, and the carry trade, speculation on the change in interest rates in two currencies.^[2]
In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s after three decades of government restrictions on foreign exchange transactions (the Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states after World War II), when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of

• its huge trading volume representing the largest asset class in the world leading to high liquidity;
• its geographical dispersion;
• its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday;
• the variety of factors that affect exchange rates;
• the low margins of relative profit compared with other markets of fixed income; and
• the use of leverage to enhance profit and loss margins and with respect to account size.

As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks. According to the Bank for International Settlements,^[3] as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007. Some firms specializing on foreign exchange market had put the average daily turnover in excess of US$4 trillion.^[4]
The $3.98 trillion break-down is as follows:

• $1.490 trillion in spot transactions
• $475 billion in outright forwards
• $1.765 trillion in foreign exchange swaps
• $43 billion currency swaps
• $207 billion in options and other products

What is a Forex Broker?

A Forex broker is middle man that matches up buyers and sellers for forex transactions. There are are several types of forex brokers, but the main job is the same, give buyers and sellers access to the forex trading market.

What is MetaTrader

MetaTrader is an independent trading platform that was developed for trading forex, options, and futures.

MetaTrader is made by the MetaQuotes company and it was created in 2002. MetaTrader was one of the first truly programmable trading platforms that came complete with its own programming language.

MetaTrader is a software platform that is independent of the forex broker. The brokers that support using the metatrader platform do package their own versions, but the back end software is maintained by the MetaQuotes Software Corporation.

The metatrader platform is most well known for it's diverse technical analysis ability and the ability to run Forex Robots and Expert Advisors.

What is a take profit order?

A take profit order is an order that closes your trade once it reaches a certain level of profit.
When your take profit order is hit on a trade, the trade is closed at the current market value.
Take profit orders are also sometimes referred to as limit orders.

What is a stop loss?

A stop loss is an order that closes out your existing trade in order to limit losses.
Stop losses are literally used to stop the loss of your trading capital. When your stop loss order is hit on a trade, the trade is closed at the current market value.

5 Things to Look for in a Forex Broker

1. Low Spreads

The spread is the cost of doing business in forex trading. Forex brokers should provide a reasonably low spread. It is important to note that some brokers have a variable spread that changes with market conditions.

2. Low Minimum Lot Size

Being able to trade smaller lots will allow for tighter risk management. Look for a broker that can offer you the ability to trade small lots. For beginning traders, mini lots or micro lots are recommended.

3. Fast Order Execution

Any trading style can benefit from an order being filled quickly. Delays in filling an order can cause losses in volatile markets. The broker should be able to fill your order in less than a second in any market.

4. Extensive Technical Tools

The broker should offer you a wide array of technical tools to use for chart trading. As you develop a trading style, you may find that you feel comfortable using new tools. The availability of a wide range of technical tools can help you to find your trading strategy.

5. Adjustable Leverage

A good broker will offer you the ability to change your leverage as needed. A broker that forces you to use high leverage is probably trying to help you lose your money. There will be times when more leverage is appropriate and times when less is appropriate. You should be able to call your broker and have your leverage changed any time that you need it to be.

When does the forex market open?

The forex market is open almost all of the time! It opens on Sunday night around 21:00 GMT and closes on Friday afternoon around 21:00 GMT. Forex traders can initiate trades at any time between Sunday and Friday.

What are the best forex trading hours?

The best time to trade the forex markets is between 8:00 GMT and 16:00 GMT. These are basically the hours of the London market with the last 5 hours being in overlap with the US market. This is the time when the most traders and biggest banks are in the markets making their trades. It is widely considered the most profitable time to trade.

What is a Pip?

PIP stands for Percentage In Point. It is equal to 1/100 of 1 percent, or .0001.

In forex, currency prices are typically quoted to the fourth decimal. For example, if the EUR/USD pair moves from 1.3410 to 1.3420 it has moved by 10 pips. If the EUR/USD increases by 1 full cent in value (from 1.3410 to 1.3510), it has increased by 100 pips.

How much money do I need to get started?

The amount of money that you will need to open an account depends on the broker. Brokers such as Oanda will allow you to open an account with as little as $1 while brokers like FXCM require at least $300. If you aren’t ready to commit real money yet, you can always start with a demo account.

Why do Brokers Give You so Much Leverage?

Brokers make their money on the spread. They are happy to provide leverage to forex traders because the bigger the trade, the more the pips in the spread are worth.

For example, let’s say you used no leverage and were just trading a $1,000 account. You make a trade for the full amount of $1,000 and the spread is 3 pips. Each pip would be worth about 10 cents. The broker would make 30 cents as a payment for handling your trade. Let’s add some leverage now. You use the same $1,000 at 50:1 leverage. Now your trade on the market is worth $50,000. Each pip is now worth around $5! The broker makes $15 for handling your trade. The broker gets to keep that money whether you win or lose your trade. This is why you see some brokers out there offering 200:1 leverage. They can make the most money from your trading and at the same time make it very easy for you to trade by letting you open an account with a small amount of capital.

Is forex trading risky?

Forex trading can be very risky if you don't use proper risk management. Forex is considered to be one of the most risky forms of investing because of the availability of leverage. New forex traders can minimize the risks by learning proper risk management and developing a solid trading plan.

What is a Currency Pair?

In forex trading, all currencies are quotes in pairs. For example, in comparing the Euro Dollar(EUR) to the US Dollar(USD), you would quote the currency pair EUR/USD. A currency pair is a set of currencies that are being quoted against each other. In a currency pair there is always a quote currency and a base currency. The first currency in the pair is the quote currency and the second currency is the base currency. When we render a forex quote for this pair, we are saying how many dollars each Euro is worth. If the quote is EUR/USD 1.31 that says 1 Euro is worth 1.31 US Dollars.

What is a Forex Trader

A forex trader is someone that practices the art of trading on the foreign exchange market.
Forex traders trade currencies with the intent of buying currencies when they are undervalued and selling them when they are overvalued and making money in the process.

What is a trailing stop?

A trailing stop is a stop loss order that moves as the price progresses in the direction that you are trading. If the trade moves back towards the trailing stop loss order, the order will stay stationary until hit.
A trailing stop will continue to follow the price reducing your trading risk with every move and ultimately locking in profit.

Is Forex Trading for Everyone

Forex trading is something that everyone can do, if they are determined.
That being said, forex trading is not for everyone. It takes a certain amount of persistance and the ability to adapt to changes easily.

Here are a few things that would be helpful for someone that wants to trade forex.

1. Be Able to Deal With Your Emotions

Trading should not be emotional. You should be able to be cold and disconnected from the charts. This will allow you to see what the charts are telling you, rather that seeing what you want to see.

This is easily one of the most difficult things to master.

Is Forex a Scam

Forex is not a scam, but there are plenty of scams associated with forex.
Scams are a big problem faced by everyone in the forex industry. As with any new industry, there are plenty of people out there looking to take advantage of new comers.
Forex itself is a legitimate endeavor. Forex trading is a real business that can be profitable, but it must be treated as such. It is not a get rich overnight business, no matter what you may read elsewhere, however, it is possible to have a profitable legitimate forex business. Like any other real business though, there is no free lunch.