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Using Stop Loss Orders in Forex Trading

- Reviewed by James Stanley, Nov. 24, 2021 Market movements can be unpredictable, and the stop loss is one of the few mechanisms that traders have to protect against excessive losses in the forex market. Stop losses in forex come in different forms and methods of application. This article will outline these various forms including static stops and trailing stops, as well as highlighting the importance of stop losses in forex trading. WHAT IS A STOP LOSS? A forex stop loss is a fun

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Currency Carry Trade: What is it and how does it work?

- Reviewed by James Stanley, Nov. 24, 2021 A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. This is also known as “rollover” and forms an integral part of a carry trade strategy. Traders gravitate towards this strategy in the hope of collecting daily interest payments over and above any currency appreciation from the actual trade. This article explains FX carry trade

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What is the Best Time Frame to Trade Forex?

- Reviewed by James Stanley, Nov. 24, 2021 “Is there a best time frame to trade forex?” is a common question a lot of traders ask, especially those new to the forex market. The truth is, there is no single answer. It all depends on your preferred trading strategy and style. Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Trend charts refer to longer-term t

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The Importance of Liquidity in Forex Trading

- Reviewed by James Stanley, Nov. 24, 2021 As a trader gets started in forex trading, one of the first advantages they’re likely to come across is how much liquidity the forex market offers over other markets. The latest figures are roughly $5.1 trillion in daily traded volume as per the Bank of International Settlements triennial report of 2016. Forex liquidity allows for ease of trade, making the market popular among traders. However, certain variances in the FX market need to be tak

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How to Manage Fear and Greed in Trading

- Reviewed by James Stanley, Nov. 24, 2021 MANAGING FEAR AND GREED WHILE TRADING: MAIN TALKING POINTS Fear and greed are two drivers that influence our everyday lives These influences carry over to trading and can be detrimental Traders can remove these drivers by looking at the big picture and planning ahead Fear and greed are often identified as the main drivers of financial markets. This is clearly an oversimplification, however fear and greed do play an importan

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Copper Trading: Copper Trading Tips and Strategies

COPPER TRADING: COPPER TRADING TIPS AND STRATEGIES Copper is a highly tradeable commodity. Copper is priced in US Dollars; so the price of the dollar affects the price of copper. Copper is gaining more traction as an investment option along with various other alternatives. As looked at in our primer for copper, copper prices tend to do well when emerging markets are growing as demand derives from building and construction. Trading strategies for copper can inclu

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Black Friday & the Stock Market: Economy, Consumers & Shares

First it was known for the Black Friday stock market crash – then for being the biggest shopping day of the year. The meaning may have evolved, but today, Black Friday is still a subject for stock market scrutiny. Which retailers look set to benefit? What can we learn from the price action of past years? And what factors help you trade the period? We’ll find out. But first, a history lesson. WHAT IS BLACK FRIDAY? Black Friday was originally the term used to describe the stock mark

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GBP/USD Remains Under Pressure From the US Dollar and Article 16 Fears

GBP/USD Price, Chart, and Analysis: Little support seen for GBP/USD. EU/UK discussions continue over NI protocol.   Keep up to date with all market-moving data releases and events by using the DailyFX Calendar The US dollar continues to dominate price action in the FX-space, leaving a range of currencies at the risk of making multi-month and multi-year lows, including GBP/USD. The latest US dollar rally, sparked by data showing US inflation at a 30-year high, has

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How to Trade the Impact of Politics on Global Financial Markets

HOW TO TRADE GEOPOLITICAL RISKS, JAPANESE YEN, US DOLLAR, EURO, BRAZILIAN REAL, INDIAN RUPEE, 2016 ELECTION – TALKING POINTS The global economy is showing increasing weakness and fragility. Eroding economic fortitude exposes markets to geopolitical risks. Examples of political threats in Asia, Latin America and Europe. See our free guide to learn how to use economic news in your trading strategy! ANALYZING GEOPOLITICAL RISKS Against the backdrop of eroding

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Technical vs Fundamental Analysis in Forex

UNDERSTANDING THE DIFFERENCES BETWEEN FUNDAMENTAL AND TECHNICAL ANALYSIS IN FOREX TRADING There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? In this article we will explore what the difference is between these two types of traders and which pieces of information forex traders in particular tend to look at. Technical vs fundamental analysis comparison   TECHNICAL ANALYSIS

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Introduction to Multi-Time Frame Analysis

AN INTRODUCTION TO MULTI-TIME FRAME ANALYSIS Multi-time frame analysis (also known as multiple time frame analysis) allows traders to focus on the appropriate timing of trades as well as help identify when trends may be reaching exhaustion. This article will explain how to utilize this methodology with the forex pair EUR/AUD. BENEFITS OF MULTI-TIMEFRAME ANALYSIS As explored in previous articles on trendlines and pitchforks / median-lines are used to locate key reaction zones in pr

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Top 10 Candlestick Patterns To Trade the Markets

Candlestick patterns are important tools in technical trading. Understanding them allows traders to interpret possible market trends and form decisions from those inferences. There are various types of candlestick patterns which can signal bullish or bearish movements. This article will briefly touch upon what candlestick patterns are and introduce the top 10 formations all traders should know to trade the markets with ease. Try out our interactive trading quiz on forex patterns! WHAT

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Product feature: Custom Trading Hours on ProRealTime

Hello IG Community ProRealTime is an advanced charting software and trading platform. ProRealTime's high quality charts, analytic tools and reliable market data received directly from the exchanges make it a powerful decision support tool.  Our first product feature is custom trading hours on ProRealTime.   We will cover how to enable custom trading hours and weekend data, how the setting affects market groups and how to adjust your charts to reflect historic dividend and rollo

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The CPI and Forex: How CPI Data Affects Currency Prices

In this article, we’ll explore CPI and forex trading, looking at what traders should know about the Consumer Price Index to make informed decisions. We’ll cover what CPI is as a concept, the CPI release dates, how to interpret CPI, and what to consider when trading forex against CPI data. WHAT IS CPI AND WHY DOES IT MATTER TO FOREX TRADERS? The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies t

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IG Webinar: The importance of psychology in trading

Hello IG Community   Delve inside your mind How does psychology impact trading? Discover the factors that can influence financial decisions – personality, emotions and moods, biases and social pressures – and hear from experts and traders about the challenges psychology can create.   Webinar We are glad to inform you that we will be hosting a webinar on the importance of psychology in trading with Christopher Beauchamp, IG's Chief Market Analyst, he will intro

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How to Read a Candlestick Chart

READING CANDLESTICK CHARTS – TALKING POINTS: Candlestick charts differ greatly from the traditional bar chart Traders generally prefer using candlestick charts for day-trading because they offer an enjoyable visual perception of price It’s important to understand the key components of a candle, and what they indicate, to apply candlestick chart analysis to a trading strategy WHAT IS A CANDLESTICK CHART? A candlestick chart is simply a chart composed of individ

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Find Your Forex Entry Point: 3 Entry Strategies To Try

WHAT IS A FOREX ENTRY POINT? A forex entry point is the level or price at which a trader enters into a trade (buy/sell). Deciding on a forex entry point can be complex for traders because of the abundance of variable inputs that move the forex market. This article will cover how to enter a forex trade and outline the following entry strategies: Trend channels Breakouts Candlestick patterns WHEN IS THE BEST TIME TO ENTER A FOREX TRADE? The best time to enter a f

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Central Bank Watch: BOE & ECB Interest Rate Expectations Update

CENTRAL BANK WATCH OVERVIEW: While some semblance of stimulus reduction has already begun, the BOE doesn’t seem to think inflation pressures are anything more than transitory. The ECB doesn’t meet again until September, though there has been plenty of signaling that extraordinary policy measures will be sticking around. Retail trader positioning suggests that EUR/USD has a bullish bias while GBP/USD has a bearish bias. INFLATION? WHAT INFLATION? In this edition

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How to Trade After a News Release

Traders need to learn how to navigate volatile markets by implementing a solid trading plan and adopting sound risk management. This article provides effective tools for traders looking to trade post release. Other articles in this series: An introduction to forex news trading How to trade before a news release Trading FX during a news release POST-RELEASE TRADING STRATEGIES 1. Trend following strategy This strategy involves the use of multiple time

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Implied Volatility: What is it & Why Should Traders Care?

Implied volatility, synonymous with expected volatility, is a variable that shows the degree of movement expected for a given market or security. Often labeled as IV for short, implied volatility quantifies the anticipated magnitude, or size, of a move in an underlying asset. WHAT IS IMPLIED VOLATILITY? Implied volatility is a number displayed in percentage terms reflecting the level of uncertainty, or risk, perceived by traders. IV readings, which are derived from the Black-Scho

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How Central Banks Impact the Forex Market

THE ROLE OF CENTRAL BANKS IN THE FOREX MARKET Central banks are mainly responsible for maintaining inflation in the interest of sustainable economic growth while contributing to the overall stability of the financial system. When central banks deem it necessary they will intervene in financial markets in line with the defined “Monetary Policy Framework”. The implementation of such policy is highly monitored and anticipated by forex traders seeking to take advantage of resulting curren

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Forex Vs Stocks: Top Differences & How to Trade Them

Traders often compare forex vs stocks to determine which market is better to trade. Despite being interconnected, the forex and stock market are vastly different. The forex market has unique characteristics that set it apart from other markets, and in the eyes of many, also make it far more attractive to trade. When choosing to trade forex or stocks, it often comes down to knowing which trading style suits you best. But knowing the differences and similarities between the stock and forex ma

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The Federal Reserve Bank: A Forex Trader’s Guide

The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Find out about the history of the Fed, its influence on USD and how to trade Fed monetary policy decisions. WHAT IS THE FEDERAL RESERVE? The Federal Reserve is the central bank of the United States. It was founded to create a stable, flexible monetary and financial system for th

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