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best forex trading platform malaysia Malaysia offers a local market with notable business potential for forex brokers, so several have established offices in Malaysia. Still, relatively few of them offer customer support or websites translated into Malay, so you may need to understand English to have a broader selection of brokers to deal through. Local traders will be familiar with the Malaysian ringgit (MYR) that serves as Malaysia’s national currency. According to the Bank for International Settlements (BIS), the ringgit accounts for roughly 0.4% of daily turnover in the forex market and was ranked 25th among 2016’s most actively traded currencies. The country also offers decent financial regulatory oversight by Securities Commission Malaysia (SCM) that was established under the Securities Commission Act 1993. The SCM regulates futures and exchange-traded products, although forex products are not formally regulated yet. The SCM does, regulate how brokers operate in Malaysia, and the National Bank of Malaysia (Bank Negara) manages the Malaysian ringgit’s value. Bank Negara has committed itself to promoting a stable, sound and progressive financial sector. Furthermore, traders of the Islamic faith may find Malaysia a particularly good place to open Islamic swap free trading accounts that comply with Sharia law since Islam is Malaysia’s official religion. Malaysia’s strong financial services sector specializes in providing Islamic investment products and Islamic accounts. Also, the Islamic Financial Services Act (2013) requires such services to comply with Sharia law. Things to Consider Before You Open a Forex Account Since not all online brokers are equal, the most important things to be confident about before opening a forex account is that the broker is secure and offers the services you require. The bullet points below describe the more common considerations you’ll want to review before you select a broker as a trading partner. Regulation The primary consideration when choosing a broker should be the security of your funds deposited as margin. Select a well-regulated broker with at least one reputable regulatory body overseeing its operations and that segregates client accounts from its own. Most foreign brokers accepting clients from Malaysia will be overseen by one or more good regulatory agencies, such as the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) in the United States or the U.K.’s Financial Conduct Authority (FCA). Broker Type Online brokers will typically act either as market makers or as electronic communications network (ECN) brokers. Market makers take the other side of your trades, while ECN brokers pass on the best price of a selection of market makers who use its electronic communications network. ECN brokers typically show narrower variable spreads but may charge a per trade commission, while market makers often have wider fixed spreads but no commission. Dealing Spreads and Commissions The difference between the bid price and the offer price in a broker’s quotation is known as the dealing or bid/offer spread. Since spreads and commissions add a cost to trading, active traders will want to keep them down as low as possible, while less active traders typically seem less sensitive to such considerations. Trading Platform Ideally, you want to find a broker that offers trading software with a customizable interface and that has the analysis features you require, as well as runs on the desktop, mobile or web platform you prefer. Virtually all of the best online forex brokers will support using the popular MetaTrader 4 and 5 trading platforms developed by MetaQuotes that offers a complete technical analysis functionality with numerous valuable trading tools, including a wide range of third-party expert advisors (EAs) and custom indicator software that you can use or purchase. Some brokers also offer access via cTrader, NinjaTrader, their own proprietary platforms and social copy trading platforms like ZuluTrade. Customer Service Most traders, especially those with less experience, know the importance of being able to communicate promptly with their broker’s customer support staff in case errors or issues arise. Traders new to the broker can also appreciate material on how to use their trading platforms. Research, Analysis and Educational Materials These written and visual aids can be a major plus for traders with less experience. Even more advanced traders may appreciate having access to a high-quality news feed and market analysis performed by professionals. The Best Forex Brokers in Malaysia If you want to deal through the best online brokerage available to Malaysian forex traders, choose from among the well-regulated brokers described below. Some of them even have offices in Malaysia and a website translated into Malay. In general, reputable international brokers who have established a Malaysian presence would probably be ideal. This is because local representation often encourages brokers to behave more responsibly due to the greater risk of regulatory and/or other legal action being taken against them in Malaysia if clients complain. Best Overall: FOREX.com FOREX.com ranks as the top U.S. forex broker when it comes to client assets. It is well-regulated in the United States by the NFA and CFTC, and it is also regulated in seven further jurisdictions that include Canada, Australia, the U.K., Singapore, Japan, Hong Kong and the Cayman Islands. Although you’re not able to communicate with them or view their website in Malay, Malaysian clients are welcome to open an account at FOREX.com. Doing so requires just a $250 minimum deposit, and micro lot trading is supported. The broker keeps client accounts segregated from its own funds, and it provides the Islamic account option most Malaysian traders prefer. When it comes to trading platforms, the broker offers desktop, mobile and web-based offerings. They also offer MetaQuotes’ popular MetaTrader4 and 5 platforms and NinjaTrader, as well as its own Advanced Trading Platform and Web Trading platform. FOREX.com only allows clients to trade forex using a rather low maximum leverage ratio of 50:1, and you can find out additional information at FOREX.com. eToro eToro is a social trading platform which provides forex products and to retail clients, and has for over 10 years. With over 10 million account holders worldwide, eToro creates a community for users to be a part of. eToro’s most popular trading features for forex trading are CopyTrader, CopyPortfolios, and the Social News Feed. With the Social News Feed, you can access a Twitter-like feed to trader updates. With CopyTrader and CopyPortfolio, you can find a successful trader and copy the strategy they use. You can copy up to 100 traders; this feature is easy to set up and access. Traders discuss the markets, their strategies, and are able to get alerts based on certain market factors. Next Steps Finding a reputable broker that takes forex trading clients from Malaysia isn’t difficult, so just choose one of the above brokers and set up an account. You can generally try out services and platform using a demo account first. To open a live account, you will then need to provide personal identifying information and make a margin deposit of a suitable size to satisfy the broker’s requirements to do so The Malaysian economy is on the move, having transformed itself from merely an exporter of raw materials some four decades back to one of the major emerging market economies in Asia. Oil and gas are still its primary exports, supplying more than 40% of government revenues, but it has moved dramatically into the regional value-added production chain. By virtue of this transformation, it continues to attract new investment capital in Islamic finance, high technology industries, biotechnology, and services. With these dramatic advances in hand, many local investors have become active in all manner of investment vehicles, including retail forex trading. The Malaysian Ringgit (“MYR”) has appreciated since the global recession in 2009 by 26% before pulling back to lower levels after commodity prices cooled down and the price for a barrel of oil pulled back to a more reasonable price point below $100. In the meantime, the evolution of currency trading in this country has not been an easy one. Malaysia is reported to be an attractive target for forex crooks in a way similar to the situation in many Middle Eastern Muslim nations enriched through commodity exports. The Bank Negara Malaysia is the central bank of the country and manages the Ringgit. Regulatory responsibilities are left to the Securities Commission Malaysia, which is headquartered in Kuala Lumpur. The Securities Commission oversees exchange-traded products, as well as commodity and forex futures and the activities of brokers in the country. Regulations, however, have not been updated to accommodate retail forex trading, and in some cases, pronouncements from government officials have suggested that some forms of trading may be illegal. Finding a legal pathway often involves sticking with local banks that do not support leverage to any extent. Central bankers are notorious for discouraging speculation in any form, but trading currency pairs that do not involve the Ringgit tend to be acceptable, an interpretation designed to restrict Malaysian currency flows and retain audit trails for tax collections. Islam is also the official religion of Malaysia, and 16.5 million Muslims account form nearly 60% of the nation’s total population. Local forex brokers are obliged to offer special Islamic law accounts, as appropriate, to attract this larger sector of potential traders, but the local Fatwa Council has ruled that trading in currency spot markets violates their principles. The Fatwa, however, does not have the power to enforce their rulings, and it should be said that Islamic jurists in other parts of the world have disagreed with this local ruling. If you are a Muslim considering retail forex trading, then be sure to review the many materials on the Internet and reach your own personal assessment before acting as your conscience guides you. Once past these “hurdles”, an aspiring trader must select a business partner from a host of possible forex brokers. To protect yourself from fraud, it is highly recommended that you invest the time it takes to complete a detailed review before making your final decision. Safety and security should be uppermost on your priorities. Check credentials with authorities, verify that there truly is a local office to support your needs, and validate the quality of your short list with other traders in the area. Be careful to avoid offshore firms. Pressing your legal rights in a foreign jurisdiction can be a nightmare waiting to happen. Choosing the best forex broker among the many available offers may be a difficult task, but with our help, we hope that you will find it easier. We have prepared the above list of some of the most reputable and competent forex brokers in the market, and since you will lose nothing by taking a look, it is a good idea to check it out before you make a final decision about your forex broker! Forex, derived from foreign exchange, is the process of exchanging one currency for another. While foreign exchange is standard in international business, Forex trForex, derived from foreign exchange, is the process of exchanging one currency for another. While foreign exchange is standard in international business, Forex trading is also a popular form of investing for private citizens, called retail traders, all over the world. The Forex market is the largest and most liquid financial market in the world, with a trading volume in 2019 of approximately 6.6 trillion USD every day. Forex trading is the buying and selling currencies on this market. A Forex trader will buy a currency at the current market price and sell it again at a target price in the future. Because currency prices are always changing, the purchase and the sale price will be different, and the difference between the two prices will be the trader’s profit or loss. It is only because of this market volatility that Forex traders can make a profit. Even though the Forex market operates 24 hours a day, market volatility tends to peak during the regular opening hours of the stock markets in Sydney, Tokyo, London and New York. The highest volume of trading generally occurs at the overlap of the London and New York opening hours, and this is when Forex traders are most active. The only way for retail traders to access this international market if via an intermediary called a broker. A broker will provide the trading software and market access for their clients, so a trader can do market research and buy and sell currencies. These are our top four choices of brokers for beginner traders. Quotes and Spreads: Ask price, bid price and trading costs The value of a currency pair is expressed using a two-price quotation system: One price is for buying – or going long – and is called the ask price, this will be slightly above the market price. The other price is for selling – or going short – and is called the bid price, this will be slightly below the market price. The prices are set by your broker and the difference between the two is called the spread. It’s best to see the spread as a broker’s fee for using its trading platform. The spread is measured in pips and is often the largest component of your trading costs. The spread is typically different for each currency pair and is influenced by factors like the pair’s liquidity, the broker’s mark-up and the broker type. Some brokers offer very tight spreads, often based on the raw interbank rate, and in these cases you will pay commission on every trade. Here is an example of a 1-pip spread on the EUR/USD pair: Bid price:1.1332 Ask price:1.1333 The ask price minus the bid price = 0.0001 = 1 pip. Trade size: Lots, mini lots, micro lots and nano lots The size or volume of a trade is measured in lots. This is similar to how stocks (equities) are measured in shares and gold, which is measured in ounces. One standard lot is 100,000 units of a currency pair. So, if you buy one standard lot of the EUR/USD, you’re entering a trade worth 100,000 euro (which is more than USD 100,000). One mini lot is 10,000 units of a pair. A mini lot of the EUR/USD is worth 10,000 euro. One micro lot is 1,000 units of a pair. A micro lot of the EUR/USD is worth 1000 euro. In most cases, a micro lot is in most cases the smallest trade you can place, though some brokers will offer nano lots of for smaller account types. Leverage: Amplifying exposure but increasing risk Trading with leverage involves borrowing money from a liquidity provider to greatly increase the size of your trade. A trader will place a small deposit, known as the margin, and the rest of the trade value will be leverage. Your profit or loss will be based on the full value of the trade, not just your margin. Most CFDs are traded with leverage because they allow traders to open much larger positions than their account balance would normally allow. Using high leverage can increase your profit potential considerably but will also considerably increase your risk. Traders who use excessive leverage are exposing themselves to significant losses. Here is an example to demonstrate how leverage can be used to place larger trades with less capital: Let’s say you have a small trading account of USD 100. You have access to leverage of 1:500. You place a trade of 0.1 lots (one mini lot) on the USD/JPY pair. One mini lot is 10,000 units of the pair, which means the value of your trade is USD 10,000. Although the notional value of the trade is USD 10,000, only USD 20 of your account is engaged in opening the trade because 1:500 leverage means that you need to put down only 0.2%* of the notional amount of the trade. *This example doesn’t consider the extra margin required to sustain a position with a floating loss. Trade direction: Going long or going short We touched on going long and going short earlier, but let’s look at what we mean in more detail. CFD traders can speculate on whether an asset will increase or decrease in value and can profit either way. Profiting from the decreasing value of an asset is unique to CFD trading. Going Long vs. Going Short Long is the term used for buying, where the trader speculates that the price of the base currency will rise relative to the quote currency. In simple terms, you will make money from a long (buy) position if the price of the currency pair rises. Short is the term for selling, where the trader speculates that the price of the base currency will fall relative to the quote currency. In simple terms, you will make money from a short (sell) position if the price of the currency pair declines. Example – trading 1 micro lot on the EUR/USD Let’s say your trading account which is funded with USD 1000 and your account’s leverage is 1:100. The EUR/USD currency pair is trading at 1.20000. You speculate that the EUR will increase in value against the USD and you buy 1 micro lot at 1.20000. You set a stop loss at 1.19000 (100 pips below your entry price) and a take profit at 1.23000 (300 pips above your entry price). One micro lot (0.01 lots) is worth EUR 1,000, which is equivalent to USD 1200 in this scenario. As your account’s leverage is 1:100, only USD 12 of your account is used to open the position*. *Extra margin is required to sustain a floating loss. If your trade is correct The euro strengthens against the U.S. dollar and hits your profit target at 1.23000. The 1000 euro you initially bought for USD 1200 is sold for USD 1230, which means you’ve made a profit of USD 30. Another way to calculate your profit is to multiply the number of pips you’ve made by the pip value of a micro lot, which is USD 0.10 on the EUR/USD. So, 300 pips multiplied by USD 0.10 gives you a profit of USD 30. If your trade goes wrong The euro weakens against the U.S. dollar and hits your stop loss at 1.19000. The 1000 euro you initially bought for USD 1200 is sold for USD 1190, which means you’ve lost USD 10 on the trade. Another way to calculate your loss is to multiply the number of pips you’ve made by the pip value of a micro lot, which is USD 0.10 on the EUR/USD. So, 100 pips multiplied by USD 0.10 gives you a loss of USD 10. What affects currency exchange rates? Like all markets, currency prices are set by supply and demand. But the constant shifts in supply and demand of the dozens of frequently traded currencies makes the Forex market more complex than most. Happily, there a few indicators that traders can use to help them predict price movement. Central Bank Economic Policy National economic policy, set by central banks such as the Bank of England in the UK or the Federal Reserve in the USA, can have major effects on currency prices. Following the 2008 crash, some central banks engaged in quantitative easing, or increasing the supply of money in circulation, which causes a currency’s price to drop. On the other hand, raising interest rates (usually used to combat inflation) will cause a currency’s price to increase as this leads to higher investor demand. If economic policy changes without warning it can create major fluctuations in currency value. In 2015 the Swiss National Bank (SNB) abruptly scrapped the Swiss Franc’s peg to the Euro with no warning. This resulted in a huge increase in the value of the franc versus the euro – moving from 1.2 CHF/EUR to 0.86 within hours of the news. Current Events Current events can also affect the price of a currency. The ongoing Brexit debacle in the United Kingdom is a perfect example: Large investors like to move money into strong, predictable economies; so as Brexit uncertainty continued institutional investors moved their capital out of the country, decreasing demand for the GBP and causing it to lose value. Once it appeared that the British Parliament had successfully agreed on a Brexit deal, the value of the GBP rose again. You can see this effect anywhere you look in the world, if a good piece of economic news appears about a nation-state, its currency will increase in value. If the news is negative, the currency’s value will decrease. As a rule, the better health a country’s economy is in, the stronger and more stable its currency will be. Trading Strategy In Forex trading there is no “best” strategy – the strategy that works for you will be dependent on your personality and lifestyle. All trading strategies will require you to engage in market analysis in order to be successful. Market analysis can be grouped into two general types; fundamental analysis and technical analysis. Fundamental Analysis Fundamental analysis is the study of macroeconomic trends and their effects on price, this form of analysis requires a sound knowledge of economics and current events. In the broadest sense, Fundamental traders try to buy currencies from stronger economies at a low price and sell currencies from underperforming economies. Fundamental traders are often reliant on scheduled news events that alter currency price. A good example is the Non-Farm Payroll (NFP) report in the United States; the NFP is released on the first Friday of every month and details how many jobs have been added or lost in the US economy. It’s generally seen as a good bellwether of US economic health and if the figure is higher or lower than expected then we will see increased volatility in the Forex market. Fundamental analysis can be tough for traders unfamiliar with finance data but for traders who have a firm grasp of the financial news, and understand macroeconomics, this is a very successful approach. Technical Analysis Technical analysis is the prediction of future price action based on historical price data. Technical traders make heavy use of charts and will often rely on a variety of tools and indicators to help them identify trends and patterns. Almost all technical analysis is based in Dow Theory, a set of principles laid down in the 19th century by Charles Dow to describe and predict the movement of the stock market. The most common form of technical analysis is price action trading, which is essentially the analysis of the actions of all the other market participants. Price action traders believe that market psychology is the main driver of price: They believe that there are many reasons for price movement, but that ultimately, its traders’ reactions to developments. Technical analysis can be tough to learn, but once you have a good understanding of the basics it can be used in any financial market, not just the Forex market. Analytical Tools All good traders will use a combination of fundamental and technical analysis to find opportunities in the Forex market and there are several great tools we recommend to get you started: Autochartist: is a lightweight technical analysis tool that can be plugged directly into your trading platform. It analyses trends in price action and highlights trading opportunities based on automated technical analysis across a huge number of Forex pairs. Trading Central: A more robust analysis database that contains over 8,000 assets, including stocks, commodities and Forex pairings. Analysis, both technical and fundamental, provides data and commentary on each asset. TradingView: An intuitive and advanced financial visualisation platform and active social network for traders and investors. In addition, TradingView offers a huge number of HTML5 charts, stock screeners, hundreds of pre-built technical analysis indicators and a built-in news feed. Whatever form of analysis you focus on, these tools will help you find your feet and do a lot of the hard work for you – especially on the technical side. Once you get to grips with technical analysis you will probably want to start customising your platform with indicators and algorithmic trading bots that can automate your trading strategy. Conclusion Some of these terms and concepts might be tricky to understand at first but it won’t take you long to get it when you see it in action. The best way to learn the basics of Forex trading is to practice on a demo account and place a few trades. We still have plenty of good information waiting for you! Take a look at the articles below to further develop your skills and knowledge…ading is also a popular form of investing for private citizens, called retail traders, all over the world. The Forex market is the largest and most liquid financial market in the world, with a trading volume in 2019 of approximately 6.6 trillion USD every day. Forex trading is the buying and selling currencies on this market. A Forex trader will buy a currency at the current market price and sell it again at a target price in the future. Because currency prices are always changing, the purchase and the sale price will be different, and the difference between the two prices will be the trader’s profit or loss. It is only because of this market volatility that Forex traders can make a profit. Even though the Forex market operates 24 hours a day, market volatility tends to peak during the regular opening hours of the stock markets in Sydney, Tokyo, London and New York. The highest volume of trading generally occurs at the overlap of the London and New York opening hours, and this is when Forex traders are most active. The only way for retail traders to access this international market if via an intermediary called a broker. A broker will provide the trading software and market access for their clients, so a trader can do market research and buy and sell currencies. These are our top four choices of brokers for beginner traders. Quotes and Spreads: Ask price, bid price and trading costs The value of a currency pair is expressed using a two-price quotation system: One price is for buying – or going long – and is called the ask price, this will be slightly above the market price. The other price is for selling – or going short – and is called the bid price, this will be slightly below the market price. The prices are set by your broker and the difference between the two is called the spread. It’s best to see the spread as a broker’s fee for using its trading platform. The spread is measured in pips and is often the largest component of your trading costs. The spread is typically different for each currency pair and is influenced by factors like the pair’s liquidity, the broker’s mark-up and the broker type. Some brokers offer very tight spreads, often based on the raw interbank rate, and in these cases you will pay commission on every trade. Here is an example of a 1-pip spread on the EUR/USD pair: Bid price:1.1332 Ask price:1.1333 The ask price minus the bid price = 0.0001 = 1 pip. Trade size: Lots, mini lots, micro lots and nano lots The size or volume of a trade is measured in lots. This is similar to how stocks (equities) are measured in shares and gold, which is measured in ounces. One standard lot is 100,000 units of a currency pair. So, if you buy one standard lot of the EUR/USD, you’re entering a trade worth 100,000 euro (which is more than USD 100,000). One mini lot is 10,000 units of a pair. A mini lot of the EUR/USD is worth 10,000 euro. One micro lot is 1,000 units of a pair. A micro lot of the EUR/USD is worth 1000 euro. In most cases, a micro lot is in most cases the smallest trade you can place, though some brokers will offer nano lots of for smaller account types. Leverage: Amplifying exposure but increasing risk Trading with leverage involves borrowing money from a liquidity provider to greatly increase the size of your trade. A trader will place a small deposit, known as the margin, and the rest of the trade value will be leverage. Your profit or loss will be based on the full value of the trade, not just your margin. Most CFDs are traded with leverage because they allow traders to open much larger positions than their account balance would normally allow. Using high leverage can increase your profit potential considerably but will also considerably increase your risk. Traders who use excessive leverage are exposing themselves to significant losses. Here is an example to demonstrate how leverage can be used to place larger trades with less capital: Let’s say you have a small trading account of USD 100. You have access to leverage of 1:500. You place a trade of 0.1 lots (one mini lot) on the USD/JPY pair. One mini lot is 10,000 units of the pair, which means the value of your trade is USD 10,000. Although the notional value of the trade is USD 10,000, only USD 20 of your account is engaged in opening the trade because 1:500 leverage means that you need to put down only 0.2%* of the notional amount of the trade. *This example doesn’t consider the extra margin required to sustain a position with a floating loss. Trade direction: Going long or going short We touched on going long and going short earlier, but let’s look at what we mean in more detail. CFD traders can speculate on whether an asset will increase or decrease in value and can profit either way. Profiting from the decreasing value of an asset is unique to CFD trading. Going Long vs. Going Short Long is the term used for buying, where the trader speculates that the price of the base currency will rise relative to the quote currency. In simple terms, you will make money from a long (buy) position if the price of the currency pair rises. Short is the term for selling, where the trader speculates that the price of the base currency will fall relative to the quote currency. In simple terms, you will make money from a short (sell) position if the price of the currency pair declines. Example – trading 1 micro lot on the EUR/USD Let’s say your trading account which is funded with USD 1000 and your account’s leverage is 1:100. The EUR/USD currency pair is trading at 1.20000. You speculate that the EUR will increase in value against the USD and you buy 1 micro lot at 1.20000. You set a stop loss at 1.19000 (100 pips below your entry price) and a take profit at 1.23000 (300 pips above your entry price). One micro lot (0.01 lots) is worth EUR 1,000, which is equivalent to USD 1200 in this scenario. As your account’s leverage is 1:100, only USD 12 of your account is used to open the position*. *Extra margin is required to sustain a floating loss. If your trade is correct The euro strengthens against the U.S. dollar and hits your profit target at 1.23000. The 1000 euro you initially bought for USD 1200 is sold for USD 1230, which means you’ve made a profit of USD 30. Another way to calculate your profit is to multiply the number of pips you’ve made by the pip value of a micro lot, which is USD 0.10 on the EUR/USD. So, 300 pips multiplied by USD 0.10 gives you a profit of USD 30. If your trade goes wrong The euro weakens against the U.S. dollar and hits your stop loss at 1.19000. The 1000 euro you initially bought for USD 1200 is sold for USD 1190, which means you’ve lost USD 10 on the trade. Another way to calculate your loss is to multiply the number of pips you’ve made by the pip value of a micro lot, which is USD 0.10 on the EUR/USD. So, 100 pips multiplied by USD 0.10 gives you a loss of USD 10. What affects currency exchange rates? Like all markets, currency prices are set by supply and demand. But the constant shifts in supply and demand of the dozens of frequently traded currencies makes the Forex market more complex than most. Happily, there a few indicators that traders can use to help them predict price movement. Central Bank Economic Policy National economic policy, set by central banks such as the Bank of England in the UK or the Federal Reserve in the USA, can have major effects on currency prices. Following the 2008 crash, some central banks engaged in quantitative easing, or increasing the supply of money in circulation, which causes a currency’s price to drop. On the other hand, raising interest rates (usually used to combat inflation) will cause a currency’s price to increase as this leads to higher investor demand. If economic policy changes without warning it can create major fluctuations in currency value. In 2015 the Swiss National Bank (SNB) abruptly scrapped the Swiss Franc’s peg to the Euro with no warning. This resulted in a huge increase in the value of the franc versus the euro – moving from 1.2 CHF/EUR to 0.86 within hours of the news. Current Events Current events can also affect the price of a currency. The ongoing Brexit debacle in the United Kingdom is a perfect example: Large investors like to move money into strong, predictable economies; so as Brexit uncertainty continued institutional investors moved their capital out of the country, decreasing demand for the GBP and causing it to lose value. Once it appeared that the British Parliament had successfully agreed on a Brexit deal, the value of the GBP rose again. You can see this effect anywhere you look in the world, if a good piece of economic news appears about a nation-state, its currency will increase in value. If the news is negative, the currency’s value will decrease. As a rule, the better health a country’s economy is in, the stronger and more stable its currency will be. Trading Strategy In Forex trading there is no “best” strategy – the strategy that works for you will be dependent on your personality and lifestyle. All trading strategies will require you to engage in market analysis in order to be successful. Market analysis can be grouped into two general types; fundamental analysis and technical analysis. Fundamental Analysis Fundamental analysis is the study of macroeconomic trends and their effects on price, this form of analysis requires a sound knowledge of economics and current events. In the broadest sense, Fundamental traders try to buy currencies from stronger economies at a low price and sell currencies from underperforming economies. Fundamental traders are often reliant on scheduled news events that alter currency price. A good example is the Non-Farm Payroll (NFP) report in the United States; the NFP is released on the first Friday of every month and details how many jobs have been added or lost in the US economy. It’s generally seen as a good bellwether of US economic health and if the figure is higher or lower than expected then we will see increased volatility in the Forex market. Fundamental analysis can be tough for traders unfamiliar with finance data but for traders who have a firm grasp of the financial news, and understand macroeconomics, this is a very successful approach. Technical Analysis Technical analysis is the prediction of future price action based on historical price data. Technical traders make heavy use of charts and will often rely on a variety of tools and indicators to help them identify trends and patterns. Almost all technical analysis is based in Dow Theory, a set of principles laid down in the 19th century by Charles Dow to describe and predict the movement of the stock market. The most common form of technical analysis is price action trading, which is essentially the analysis of the actions of all the other market participants. Price action traders believe that market psychology is the main driver of price: They believe that there are many reasons for price movement, but that ultimately, its traders’ reactions to developments. Technical analysis can be tough to learn, but once you have a good understanding of the basics it can be used in any financial market, not just the Forex market. Analytical Tools All good traders will use a combination of fundamental and technical analysis to find opportunities in the Forex market and there are several great tools we recommend to get you started: Autochartist: is a lightweight technical analysis tool that can be plugged directly into your trading platform. It analyses trends in price action and highlights trading opportunities based on automated technical analysis across a huge number of Forex pairs. Trading Central: A more robust analysis database that contains over 8,000 assets, including stocks, commodities and Forex pairings. Analysis, both technical and fundamental, provides data and commentary on each asset. TradingView: An intuitive and advanced financial visualisation platform and active social network for traders and investors. In addition, TradingView offers a huge number of HTML5 charts, stock screeners, hundreds of pre-built technical analysis indicators and a built-in news feed. Whatever form of analysis you focus on, these tools will help you find your feet and do a lot of the hard work for you – especially on the technical side. Once you get to grips with technical analysis you will probably want to start customising your platform with indicators and algorithmic trading bots that can automate your trading strategy. Conclusion Some of these terms and concepts might be tricky to understand at first but it won’t take you long to get it when you see it in action. The best way to learn the basics of Forex trading is to practice on a demo account and place a few trades. We still have plenty of good information waiting for you! Take a look at the articles below to further develop your skills and knowledge…

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