Leveraging Technology: Innovating Your Forex Strategy In Dallas

Leveraging Technology: Innovating Your Forex Strategy In Dallas – Forex is a decentralized global market where all the world’s currencies are traded against each other, and traders make profit or loss from changes in the value of the currencies. Forex market is also known as foreign exchange market, FX or currency trading market.

Many novice traders have a hard time understanding what Forex is and how it works, and are followed by a very logical question – is Forex trading worth it?

Leveraging Technology: Innovating Your Forex Strategy In Dallas

Leveraging Technology: Innovating Your Forex Strategy In Dallas

Of course, beginners are often prone to mistakes such as unrealistic goals, greed, inappropriate haste and lack of knowledge – these are the main reasons why many of those who try to start a career in trading are disappointed and They leave empty handed. Before doing anything, it is extremely important to understand what is behind the forex market and how it works.

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The essence of Forex trading can be explained as follows – the value of a currency is measured by how much one unit of it can be bought for another currency. This is called reference price. A quote always consists of two prices – the bid (bid or ask price) and the ask (ask or offer price). You buy the currency at the ask price, and when you sell it, at the ask price.

Later in your learning curve you can even learn what cryptocurrency is. But if you’re interested, we welcome you to get started now.

I would like to note that the bid price of any financial instrument is always higher than the ask price.

The bank will always buy your currency a little cheaper and sell it to you at a higher price. The spread is the difference between the bid and ask price, the commission you pay a broker to provide services.

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Bid and ask prices are available to market participants at any time, except when the market is closed. The trader receives quotes over the Internet from the broker who provided him with a trading account. In turn, the brokerage firm receives price quotes from its liquidity providers, i.e. banks.

In general, the more liquid the market, the smaller the spread. There are usually no problems when trading on Forex, and there is more than enough liquidity. However, there are times, for example during major news releases, when there is a gap (price gap) due to large price changes in a very short period of time.

So, how the forex market works is a question that every beginner should know the answer to.

Leveraging Technology: Innovating Your Forex Strategy In Dallas

Trading in the foreign exchange market is done by clicking on the trading platform chosen by the trader. When an order is placed to buy the EUR/USD currency pair, part of the funds from the trader’s account are used to buy the base currency of the EUR/USD pair, in this case, the euro, and the quote currency (US dollar ).

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The order is either placed with a broker or displayed directly on the interbank forex market, where the major players are.

Depending on the trading strategy, the trader waits for the price of the currency he owns to rise and sell it. When the trader is satisfied with the profit, he closes the order, and the broker does the opposite, that is, sells euros and buys dollars. The opposite happens when a trader places a sell order.

It is important to understand that a trader can place orders to sell and buy a currency that he does not own. This is called CFD trading.

The concepts of buying and selling in forex can be confusing at first, because in every transaction one currency is exchanged for another currency, which means that every transaction is both a “buy” and a “sell” of currency. Is. You will learn about pips later in your education, but if you are interested, you can learn it now from the article “What is Pip in Forex”.

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So, what is the forex market and what does the forex market do? Let’s jump in.

Forex (Foreign Exchange Market) is an international over-the-counter foreign exchange market in which market participants buy and sell currency pairs.

The forex market is primarily dominated by large national banks, multinational companies, and hedge funds whose trading decisions significantly affect currency prices. On the other hand, medium-sized companies, private investors, and those who require hedging services rely on private banks. Financial brokers, small banks, and investors are among the smaller market participants.

Leveraging Technology: Innovating Your Forex Strategy In Dallas

Most major market participants have direct access to the interbank forex market, where currency exchange transactions take place without intermediaries. This privilege is given to those who have sufficient funds above a certain limit.

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Retail forex traders make up the smallest players in the market. Compared to advanced traders, they usually have limited purchasing power and need a forex broker or bank to provide trading accounts, financial leverage, and market access through trading servers.

When trading forex you will always be buying one currency while simultaneously selling another currency. Because of this, you will always trade currencies in a pair. Most new traders will start by trading the commonly offered pairs of major currencies, but you can trade any currency pair that is available on the trading platform as long as you have enough money in your account. be

Research and analysis are the foundation of commercial endeavors. While researching, you will find a lot of resources of foreign currency, which is overwhelming at first. But when you research a particular currency pair, you’ll find valuable resources that stand out from the rest.

You will see two prices displayed for the currency pairs (image showing base and quote currency). The first rate is the price at which you can sell the currency pair and the second rate is the price at which you can buy the currency pair. The difference between the two rates is called the spread. You can watch our live spreads.

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The history of the Forex market is marked by two special events that leave a deep imprint on its formation and development. These two historical events are the creation of the Gold Standard System and the Bretton Woods System.

The gold standard system was created in 1875. The basic idea behind this was that governments guaranteed that the currency would be backed by gold. All major economies defined monetary quantities as the value of their currencies in terms of gold to ounces of gold, and ratios of these quantities became exchange rates for those currencies. It marked the first standardized means of currency exchange in history. However, World War I led to the breakdown of the gold standard system as countries sought to adopt economic policies that would not be constrained by the fixed exchange rate system of the gold standard.

In July 1944, more than 700 representatives of the Allied nations brought up the importance of a monetary system that would fill the gap left behind by the gold standard. They organized a meeting in Bretton Woods, New Hampshire to establish a system that would become known as the Bretton Woods System of International Financial Management. The creation of the Bretton Woods system led to the creation of a fixed exchange rate as the United States appreciated the value of the US dollar in terms of gold equal to $35 for an ounce and other countries pegged their currencies to the dollar. The US dollar became the central reserve currency and the only currency backed by gold. However, by 1970 US gold reserves were so depleted that it was impossible for US Treasuries to cover all the reserves held by foreign central banks.

Leveraging Technology: Innovating Your Forex Strategy In Dallas

In August 1971, the United States announced that it would not exchange gold for US dollars held in reserve by foreign central banks. This marked the end of the Bretton Woods system and the beginning of the Forex trading system.

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The currency exchange market never sleeps, and prices are constantly changing. It is the only market that is open 24 hours a day, 5 days a week. In the international interbank market, large volumes of currencies are traded in Zurich, Hong Kong, New York, Tokyo, Frankfurt, London, Sydney, Paris and other global financial centers. This means that the interbank market is always open – when the working day ends in one part of the world, banks in the other hemisphere have already opened their doors and trading continues.

No Time Frame – A very important requirement for traders with busy work schedules. They don’t have to worry about the opening and closing hours of the trading session in the interbank market and are free to arrange their trades whenever they want, because forex traders it doesn’t matter which one. The bank provides liquidity for their transactions.

But the liquidity of the forex market can change during the day, depending on which time zone banks are working at that time (when liquidity falls, the spread increases and the speed of price changes slows down). For example, pairs with the Japanese yen will be most liquid during working hours of Japanese banks.

Below you can find the opening and closing times of trading sessions on the interbank market (i.e. periods of high liquidity), determined by the opening hours of the largest banks.

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