Bill Lipschutz, the hedge fund manager of the high performing Citi Macro Access: Hathersage G10 Macro Access Strategy fund, may not share all of his success strategies, but what we do know is the best currency hedge fund award winner for 2016 and 2017 has the best trading tools behind it. The best forex traders invest in their trading set up.
Before you start forex trading, it is well worth your time to research the best broker, technical tools and trading platforms. The $5 trillion forex mark
et has a vast supermarket of broker and FX trading tools on offer. Rather than be sold your forex trading platform, enter the market as an informed buyer by following this guide.
Choosing the Right Broker
When choosing the right forex trading broker, the beginner trader should check forex broker reviews before making the all important decision of which platform to trust their money to. Regulatedbroker.com is the best source of reviews on FX brokers.
While developing your forex trading system, be sure to compare the following services:
- Fees and spreads – Are fees and spreads competitive?
- Margins — The margin determines how much leverage you can use. Determine the margin for your trading strategy. The margin may change according to currency pairs, liquidity, volatility, and the regulatory jurisdiction.
- Technical trading tools – Beyond the basic technical indicators, a wide variety of indicators will allow you to experiment and add to your toolbox. Ensure your preferred tools are available. Also check if the tools you need are free or you must pay for them.
- Research – Whether trading two or 10 currency pairs, a broker with a real time flow of news and analysis will help you keep up with economic news and evolving market conditions in all the markets you trade.
Other services to look for include:
- FX trading education – The quality of FX training you receive as a new FX trader can make all the difference. Recommendations on the best brokers to learn forex trading can be useful. Are your friends profitable with the broker? Are they mastering new forex trading strategies?
- Risk management instruments (options, CFDs) – A good training system will teach you important advanced skills such as how to use contracts for differences (CFDs) and options to hedge your price risk exposure.
Be sure to check if your broker is regulated in the markets it trades in, whether it be the USA (CFTC), Cyprus (CySEC) or Switzerland (FINMA)?
Analyzing the Market/Trends
Forex analysis has changed since the days when traders forecasted the future price moves of candlesticks by keeping a keen eye on volatility oscillators and moving average indicators. It is a whole new trading world run by trading bots, algorithms that aggregate market sentiment, and pattern recognition software.
If you become serious about your forex trading, you will want to use electronic experts (EAs) and other trading bots to perform real-time analysis and trade execution. These tools are the self-driving car of the forex market. Ensure your platform can accommodate your automated trading tools (see next section).
Sentiment analysis tools are increasingly popular crowdsourcing measures of market sentiment. They may aggregate the sentiment of analysts or your trading peers. They include social sentiment (long/short positions) and economic news sentiment. Pattern recognition software is another handy tool powered by big data. This insightful tool can tell you what patterns the market is trading.
Rich news and education offerings seek to entertain at the level of Bloomberg or NBC market coverage. Your media streams should not be distracting but informative. News with insight from analysts and social media channels should keep you informed and on top of the market. If you like copy trade, then you will also want to test drive the social trading tools.
Picking the Right Platform
This enriched FX trading experience can easily create a busy, confusing trading interface. Properly presented, the trading environment can enhance your trading experience. Brokers are focusing on delivering simple, intuitive trading screens.
When assessing a trading environment, ask these questions:
- Does it support EAs, automated trading, and the Metatrader program?
- What charting tools and technical indicators are available? First and foremost, you must have your favorite indicators. If you are new to trading and want to try out a lot of indicators, you may want to choose the platform with lots of indicators.
Top forex brokers cater to forex trading for beginners and experts, while many serve both forex markets. Look for a platform that helps you learn while you trade. While you are shopping around, you will see many enticing sign up deals. Stick to your criteria and do not be seduced by the best forex deals.