What is the forex? If you are new to the investment market, you may have wondering this very question. After all, investment professionals and business people around the world talk about forex trading. So, it makes sense that you are curious about this sector of the investment world.
Forex-also called FX-is simply a combination of the first syllables in the words ‘foreign’ and ‘exchange.’ These two words are important to the meaning of the term as well, because the forex is an electronic foreign exchange system.
Trading through forex does not involve actual commodities or goods; instead, it involves the currency of various countries. In other words, when you trade via forex, you are trading the value of one currency-perhaps the United -versus the value of a second currency-for example, the Japanese Yen.
Any currency can be traded on the foreign exchange, yet traders and investment advisors often have their preferences. These often include the four pairs of currencies that are considered the major pairs: the Euro/Dollar (EUR/USD), the Pound/Dollar (GBP/USD), the Dollar/Yen (USD/JPY), and the Dollar/Franc (USD/CHF). Many FX traders prefer to stick to trading these major pairs for simplicity; others choose to watch the market carefully and trade currency pairs based upon market standings.
Trading specialists buy in the demand zone and sell in supply zone, and the Euro/Yen has very typical supply and demand tendencies. The forex market is open all day and night, five days per week. This near-continuous operation allows traders from all over the world to participate in the market with no regard to time zones. The market is closed on weekends.
Every day that the forex market is open, incredible numbers of trades are completed. The FX market is actually over 30 times as large as any other financial market. The huge volume of trades and the availability of trading within many different companies make the foreign exchange market quite attractive to investors.
Forex is fun to trade because it is open 24 hours a day, five and a half days a week. It also has the most liquidity out of any market.
The forex market provides unique opportunities to traders, ones that are not available from other trading tools. For example, there is no slippage on Stop orders during regular trading hours. This-and other benefits of forex trading-can be quite advantageous to investors.
Trading on the foreign exchange can be completed through investment advisors. But most experts agree that the best way to get involved in forex trading is to use an online forex trading platform for your investing. Online trading systems can provide you with trading alerts and tutorials to help you get started in the world of currency trading.
MetaTrader 4 Forex
Metatrader 4 brokers is it so important whether your forex broker offers the MetaTrader platform or some other platform. MetaTrader has not become the most popular platform out there accidentally. This metatrader 4 brokers software has some exceptional features compared to many of the other platforms available today! Let’s quickly go over them:
1. MT4 is Free.
Forex MetaTrader Brokers let clients and prospective client download the software for free and create a demo account on their servers!
This a great way to polish your trading skills without risking real money! Once you download the platform it is very easy to install and the interface is very intuitive and feature-rich. There are no ‘Bronze’ versions, Web-version etc. All the features of MetaTrader are immediately available to all clients as soon as they download the platform.
2. The MetaTrader platform is integrated with Charts
Meaning that not only does it show current prices of the currencies to the users but it also allows them to open charts, place Technical Analysis indicators and oscillators on the charts (e.g. MA and RSI) all in one application.
You will not have a whole mess of windows all over you desktop – it’s all contained tightly within the MetaTrader 4 main window. As a direct consequence of this integration – placing an order is really easy! Simply right click on the chart and select New Order from the Trading context menu! If you click in the area where you want your price to be the system will offer to open a pending order at that price! How convenient is that?!
Software for free
The fact that the charts are a part of MT4 and automatically available means that you are actually getting 2 pieces of software for free – the platform and the charts! Remember – there’s still many brokers out there who will give you the trading platform for free but will not provide you with free charts. You have to pay to get access to charts with these brokers. Not the case with forex MetaTrader brokers!
4. Automation! Perhaps one of the best feature of the MetaTrader platform and that is why both Forex MetaTrader brokers and their clients love this software is the built-in automation system! MT4 supports a special programming language called MQL which allows traders to create their own indicators, scripts and even fully automated trading robots!
The robots are called EA’s (‘Electronic Advisers’) and are in essence programs, which everyone can use with MetaTrader to analyze data, automate a range of tasks, create alerts or even automate the entire trading process completely!
There are many EA’s available with the most popular one definitely being Forex-Autopilot. This amazing MQL program will trade on your behalf – monitoring the market, opening and closing positions for you day in and day out, regardless of whether you are sitting at your computer or playing golf or sleeping!
Even though Forex-Autopilot is a pretty profitable little robot and has sold by far the most copies of all similar products available on the market, my personal vote goes for FAP-Turbo, another robot developed by the same team.
Although it is not quite as popular as forex-autopilot (and the only reason in my opinion is because it is brand new – released in Nov 2008!) it definitely outperforms FAP in all aspects: providing real-time results on its web site (information from 3 real accounts being traded in real time, streamed to the site LIVE!), placing server-based Stop-Loss and Take-Profit orders (Forex-Autopilot relied only on internal, programmatic stop loss and take profit, and providing 2 strategies which the robot selects automatically which one to used based on timerframe and market conditions.
5. MT4 offers tons of other features not available on other platforms. It has a huge arsenal of technical analysis indicators and you can always plug in more – since you can add more MQL modules to your MetaTrader station at any time!
You can customize the look and feel of your charts. You can export and import your data and preferences.
Another very important feature is that every Forex MetaTrader broker keeps an archive of historical prices and these prices are available for download through your MT4 system. You can use these prices to test your own strategies or you can run the robots on these data thus testing how profitable it will be. Many other parameters such as slippage, Stop-Loss and Take Profit available at time of placing an order, etc.