What Is Forex Trading Software?

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Forex trading software comes in a variety of forms and performs a wide range of functions.

Forex trading platform software – This is perhaps the most common type of Forex software and it is readily available from most all online Forex brokers. Forex trading platforms can be either web-based or can reside on the trader’s computer to interface with the Forex broker’s data and order entry system. These days platforms are quite sophisticated and have the ability to display a wide variety of Forex charts and indicators. Forex platforms allow traders to place orders to enter and exit trades with varying levels of sophistication.

Forex trading platform software not only allows traders to place their trades in real time, but also allows them to track their trades in real time. This is particularly convenient as you can see your current total account value (equity) fluctuate with the markets price movement.

Forex technical analysis software – Today’s trading platform software is quite sophisticated and can allow traders to do all types of analysis, especially those that have a variety of built-in technical indicators. There is also another class of trading software that is designed specifically for the testing and evaluation of Forex trading systems. It allows a trader to test out their trading ideas on historical market data to see if those trading ideas would have been profitable.

Although anyone can purchase this type of software and begin to use it is really best when in the hands of someone who has experience in the development of trading systems. You may have heard some experienced traders say, “yes, it is easy to develop a trading system…but it is much more difficult to develop a trading system that actually works”.

Forex trading system software – This type of software has a built-in trading system is specifically designed to give the trader Forex trading signals. These signals are essentially instructions which tell the trader exactly which actions to take and when to take those actions.

Automated Forex trading software – Automated trading software can make trading decisions using a built-in Forex trading system. It can also place trades with the trader’s Forex broker without the intervention of the trader. This type of trading is grown tremendously in popularity these days and the prospect of making hands-free profits appeals to many new traders. This type of software also has another name and that is a, “Forex expert advisor”. You may also see it referred to as a, “Forex robot”, no doubt because it performs its tasks automatically and without human intervention in a mechanical fashion.

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What Is a Forex Trading System?

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A Forex trading system can be thought of simply as a set of rules for an organized method used to trade Forex.

Forex trading systems have become extremely popular for a number of reasons. One of the most important reasons for this popularity is that fx trading systems allow you to trade in a more systematic and organized manner.

The objective of a Forex trading system should always be to allow the trader to trade profitably. In order for this to happen, of course, the FX system used must be a good one. In order for a trading system be a good one it needs to be thoroughly tested and researched to ensure it will have a good chance of producing profits when trading in the future. Often these test are performed on past Forex market data in a process called “back testing”. Back testing is done using Forex technical analysis techniques in order to find price patterns and parameters which will allow traders to anticipate future price moves.

One of the very best things about Forex trading systems is that they remove the subjectivity from your trading. By removing any subjectivity you are much less likely to trade haphazardly and therefore much less likely to make needless mistakes. Removing subjectivity from your trading also helps you to eliminate any limiting emotions which may negatively impact your trading performance. Also, the fact that good Forex trading systems have been thoroughly tested gives trader a great amount of confidence going forward. This confidence makes it much easier to trade consistently as a trader need only follow the instructions as dictated by the trading system.

In its simplest form a Forex trading system consists of an entry and exit. A simple example might be as follows:

“Buy the EURUSD if it closes above the 200 day moving average”

“Sell the EURUSD if it closes below the 200 day moving average”

Now understand that what we have just looked at is simply an example for the purposes of illustration. It is an example of a simple entry as well as a simple exit to make a basic trading system.

Forex trading systems are in use by successful individual traders and financial institutions around the world. With a good trading system you too can put yourself on the road to successful trading.

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3 Disadvantages of Using a Forex Robots for Automated Trading

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Even though automated trading using Forex robots has become extremely popular, using them still has certain disadvantages. Let’s explore some of those disadvantages in further detail.

The logic is hidden — Having hidden logic is a definite disadvantage. A trading system which has hidden logic is known as a “black box” system. This simply means that the expert advisor takes in real time Forex data, processes the information using its internal formulas, generates a signal and then trades that signal.

The biggest challenge when using a black box system is that you don’t know if it is working as it should or not. What we mean by that is you can’t tell if it is doing what it is supposed to do if the logic of the system is hidden. What can happen is that the system will continue to trade for you even if the premise upon which the system is based is no longer working.

Most robots simply do not work — Quite naturally, this is the biggest disadvantage. It is unfortunate that most robots are ill-conceived. One reason for this is that it is relatively easy to sell Forex trading software because there are so many people looking to buy. On the flip side is very difficult to create an expert advisor that will work for the long term. Creating a Forex strategy takes a level of skill that most robots creators simply do not have.

They make you lazy — Any time you believe that you can spend $97-$197 for product that will manufacture money for you, you are starting off on the wrong foot. As the old saying goes, “there is no such thing as a free lunch”. This is especially true in the world of Forex trading where we as traders pay for every mistake that we make.

If you buy automated Forex trading software you are essentially telling yourself that you believe that you can make money in the markets without any effort on your part. This “get rich quick and easy” mentality has meant the demise of many a would-be trader. If you’re not willing to put in the work, then how can you realistically expect to be successful? The short answer is you can’t and you shouldn’t. Believe me, if there is some super shortcut or great robot out there I’d be more than happy to share that with you. So far I haven’t found.

So after looking at these disadvantages what is the moral of the story? The moral of the story is that you should work to learn to trade Forex and create your own trading methods and trading style. In the meantime make certain that you avoid any “too good to be true” Forex products currently available in the marketplace.

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A Forex Trading Strategy Can Easily Help You To Be A Better Forex Trader

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First let’s start off with the definition of a Foreign exchange foreign exchange trading strategy. A forex trading system may also be known as a “trading method” or a “trading approach”. The obvious way to put it could be to express that a Forex currency pair system is normally a set of rules that must be followed in order to successfully trade Foreign exchange currency pairs.

Foreign exchange trading systems typically occur in the form of a cause and effect declaration. Basically the strategy operates in an, “if — then” manner. Here is a good example below:

Should the EURUSD reaches a price greater than the greatest price yesterday, then buy the EURUSD today.

Foreign exchange trading strategy programmers may start off with a fairly easy idea like the if then statement previously mentioned. They’ll next perform testing on the strategy utilizing historical FX data. Their purpose will be to see how taking that approach would’ve performed in the past. If it functions very well the next phase is to polish the strategy via more testing.

A FX currency pair trading system can be known as “mechanical trading system”. It’s named mechanical mainly because it does its tasks in a very machine-like style and provides the forex trader Forex signals. It can do this with out fear and / or feeling that is certainly one of several critical reasons for making use of foreign exchange trading strategies. Forex trading strategies have grown well-liked by both individual traders in addition to large financial institutions because of their “mechanical” nature.

With a foreign exchange trading system you basically have got a plan to adhere to while you journey towards productive Forex currency pair trading. Any good forex trading system eradicates guesswork . The fact that a FX trading strategy has been shown to be profitable by way of testing offers traders a tremendous degree of self confidence. It truly is self confidence that permits the effective forex trader to be able to push aside any kind of possibly restraining unfavorable thoughts to be able to trade Forex currency pair profitably.

Any good FX foreign exchange trading system will provide you with this details:

What you should trade — Your strategy will advise you which currency pair to trade whether it is the EURUSD, GBPUSD, EURJPY, etcetera.

When to enter — A great strategy will advise you of which price or time to enter into a trade

When to get out — A trading strategy will tell you when to get out of a trade

How much to risk — Never ever get into a trade not knowing just how much funds you’ve got at stake. A great Foreign exchange foreign exchange trading system should have it’s risk identified ahead of time.

When you should do nothing — In trading doing nothing is definitely doing something. Staying picky and trying to keep away from potentially negative positions is actually as vital as creating money-making trades. Getting impatient has been the undoing of many traders. To profit consistently it’s essential to wait for the suitable opportunities.

Essentially a great Foreign exchange trading strategy will help you certainly be a more successful, organized, in addition to self-assured forex trader. As you may already imagine, however, not all forex trading systems are created equal. If you decide to buy and / or lease a commercially available forex trading strategy make sure that you research it carefully. Test drive it using a FX currency pair practice account before using any actual money to trade the strategy.

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Simple Forex Trading System 1 – Closed Out Long EURUSD Position

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We closed out the last of our EURDUSD postitions from Simple System 1. We entered our long trade on 1/14/2011 at 1.33615 and exited our long position on 5/9/2011 at 1.43646.

We are currently short the EURUSD as of 5/12/2011 at 1.41919

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Is There Really a Safe Way to Trade Forex?

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To answer the question, “is there really a safe way to trade Forex” you will have to define “safe”. Keep in mind that the word “safe” is highly subjective. What may seem extremely safe to one trader may appear extremely risky to another.

First, we must remember that trading Forex is a speculative activity. That simply means that it is risky in comparison to other types of investments. What does that mean to someone that wants to trade Forex? It means that it should only be done with money that you can afford to lose. Money you can afford to lose is defined as “money that if lost will not affect your current lifestyle”. This is also known as your risk capital.

Let’s look at a “safe” Forex trading in another way. Safe can be defined based upon risk versus reward. Here are some examples. If you risk 1 to 3% of your Forex trading account for trade that could be considered conservative and safe. Risking 50% of your account on each trade is considered extremely unsafe. So the meaning of “safe” Forex trading is extremely subjective. Clearly how you trade Forex determines its level of safety.

The only safe way to trade Forex is through the use of a dependable Forex trading system. The bad news is that the vast majority of inexperienced Forex traders do not have a dependable Forex trading system. That leaves the beginning Forex traders with two choices. The first choice is to purchase a commercially available trading system and the second choice is to develop your own trading system. Whichever route you choose it is important to learn Forex trading and get as much Forex education under your belt as you possibly can. By doing your homework and educating yourself you begin to increase your probability for success. Effectively the better you become at Forex trading the “safer” you will feel.

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Is Forex Trading Really a Good Idea?

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To answer the question, “is Forex trading really a good idea” requires you to consider a number of factors.

First you should realize that no matter what you read Forex trading is speculative. This means that Forex trading is a risky proposition no matter how safe someone may tell you that it is.

Even though Forex trading is speculation it can be extremely profitable when done correctly. To further explore the possibilities of profitable Forex trading it is a good idea to consider the following:

Forex trading is a good idea if:

You know what you are doing — if you don’t know what you are doing you’re throwing your money away. The smartest thing for you to do that this point would be to learn Forex trading prior to risking any real money.

You have sufficient risk capital available — if you cannot afford to lose the money you plan to put into a Forex account then you shouldn’t trade. An inexperienced trader should simply not count on profits from Forex trading to pay next month’s mortgage.

You have a trading plan and a trading system — all successful businesses have good business plans and Forex trading is most certainly no exception. Successful Forex traders also rely on the use of Forex trading systems that they have evaluated as profitable. Trading Forex without a plan and without a Forex trading system is simply the equivalent of flying blind.

The lure of the huge potential profits of Forex trading can be too strong to resist the times. We’ve all seen the ads promising financial freedom without the need for any knowledge or training. One thing is for certain if you’re lazy or undisciplined you will not be a successful Forex trader. Keep in mind that excellence in any field of endeavor is achieved through study, hard work, and discipline.

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Forex EA Software Reviews — Which Review Can You Trust?

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Ideally a good Forex EA software review should give you an objective view. The very best reviews are those by people who have actually tested the Forex robot and can show you the results of their testing.

Here are some of the things to look for in a Forex EA software review:

Actual proof that the software has been used — you need to see that the reviewer has actually used the software rather than just talking about using the software or what the potential results might be. Any inexperienced person sitting at a computer keyboard can give their opinion about a product that they have never tried. Such information is completely useless to Forex traders.

Cons as well as pros — Forex EA software reviews without actually testing our as we stated before are really just opinions. These opinions could be more valid if the reviewer is actually a trader as well. Someone who does not trade Forex really isn’t qualified to write a review of a Forex trading system. For instance, a reviewer who trades Forex would probably never praise a Forex robot that makes outlandish claims. You may have seen some of the many Forex EA software reviews that claim the Forex robot has 100% winning trades. Rest assured that anyone who sings the praises of such a bogus product has no idea what they’re talking about.

For a Forex EA software review to be of any benefit to any of us it must point out the shortcomings of the Forex robot as well as its good points. It is probably safe to assume that all Forex robots will have shortcomings as there is no such thing as a perfect Forex trading system. Simply remember to carefully evaluate any reviews and avoid those where the reviewer is obviously biased.

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The Advantages of Using Forex Simulator Software

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There many advantages to using Forex simulator software. Before jumping into those advantages it’s important to know exactly what Forex simulator software is and how it works.

Most every Forex broker on the planet will offer potential customers a free Forex demo account. This free Forex practice account can be set up with a number of different levels of funding. For example, some traders may choose to start their account with $5000 in virtual cash or as others may feel more comfortable starting out with $100,000 in virtual cash. The key thing to remember here is that this is virtual cash so there is no real financial risk or reward associated with the account.

For simulator software gives you an opportunity to test out a Forex brokers platform before opening an actual account. It is a good idea to open several such accounts and compare their features side-by-side. This is a very important step because you want to make sure that the software does what you needed to do when you need to do it. For instance, if your particular trading system or strategy requires the use of trailing stops it may make sense for your Forex trading platform to allow for the use of the stops as well.

Many traders enjoy the use of the ever popular Forex simulator software, meta-trader. Many Forex brokers allow the use of meta-trader because of its growing popularity. Brokers also do this because the majority of the commercially available Forex trading system software is written specifically to work with meta-trader. One thing people like about meta-trader in general is that it allows for the use of Forex trading robots which when coupled with the right broker will automatically evaluate in place trades.

For simulator software is oftentimes used improperly by inexperienced traders. This is because many traders will use the software to “play” with Forex trading. This means they are placing trades based upon no real analysis and are just essentially guessing, gambling, and shooting from the hip. This is very common because there is no real financial risk when using a Forex demo practice account.

Forex simulator software can be especially beneficial when used properly. The proper use of this software is to use it to trade as if there were actual money in the account. That’s right, beginning traders would be much better off if they took the Forex practice account seriously and made an honest attempt to grow the equity in their account. By following a trading system and showing themselves that they can grow the equity in a Forex practice account they can feel much more certain that they will be able to succeed once they open their real Forex trading account.

So the advantages of using Forex simulator software are very clear. As just explained the biggest advantage is the opportunity to test out your theories and ideas to see if they lead to a growth and account equity. If they do not lead to equity growth then you’ll know it’s time to go back to the drawing board. If they do lead to equity growth, especially over a longer time., Then you’ll be well on your way to successful Forex trading.

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What Is the Most Powerful Way to Trade Forex?

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Traders are looking for the most powerful way to trade Forex are typically looking for the most profitable way to trade Forex. In reality traders are looking for not only profit, but comfort level as well. Although many traders will not admit that comfort level is important to them experienced traders will tell you that comfort level is important when choosing the best way to trade.

You see a trading method that is not comfortable for you is one that you will not stick with. Treading a system that you will not stick with me is eventually you will stop following in trading that system consistently. Assuming that this is a good trading system to begin with not following it consistently is simply a recipe for disaster. Let’s dig into this a little further for some clarification.

There are some excellent trading systems available that do not have a high percentage of winning trades. But we’re talking about here is a winning percentage in the 40-60% range. For many beginning traders the success ratio might be uncomfortable for them. What many traders starting out and I understand that it is not the percentage of winning trades that makes a Forex trading system good, but its ability to profit over the long haul.

Whereas the percentage of winning trades may make some traders uncomfortable the frequency of trading may make them uncomfortable as well. Some traders simply have the need for high energy, fast paced action each and every day. It may be difficult for them to stick with a trading system that only takes one trade every three months.

We’ve seen a couple of examples of some of the types of things which may make certain trading systems uncomfortable for some Forex traders. Now let’s touch upon some factors of the most powerful way to trade Forex for you.

The capital requirements of the trading system is extremely important. Each of us has different amounts of money to invest in Forex trading. This means that we need to either locate or create Forex trading systems that work well within our own personal capital requirements. For example, a trading system which trades a portfolio of 12 different currency pairs is most likely not well-suited to someone without a well-financed trading account.

Along with the capital requirements the risk level of the system will also help us decide whether or not it is ideal for us. The systems maximum drawdown, which is a measure of the largest peak equity to Valley equity drop in a trading system’s history is a key factor. If we have our eyes on it trading system with a maximum drawdown of $25,000 we already know ahead of time that opening an account with $25,000 is not going to cut it.

As we can see the most powerful way to trade Forex depends on a number of factors each of which may be different for different traders. The most successful Forex traders either find or develop Forex trading systems which suit both of their personality as well as their bank account.

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