Forex Trading Report with Forex Trade Suggestions, Forex Tips and Forex Trade Signals for Forex traders in Australia

TRUMarkets premier, Australian-based Forex Trading Report and Email/SMS Forex Trade Signals Alert Service is the perfect fit for new or experienced Forex traders interested in Forex trading in Australia.

What is Forex Trading?

Forex (foreign exchange, FX or currency exchange) trading is the simultaneous buying of one currency and selling of another. The vast forex market moves the global economy and is the most traded market in Australia and the world; hence its enormous appeal for all traders.

Forex (FX) trading is a true 24-hour market that operates five and a half days a week. For example, traders in Australia have access to the Forex market starting Monday morning when the market opens in Australia for the start of the trading week. Trading centres around the globe then come online until the US closes the next morning (Aussie time), by which time Australia has reopened for the next trading day, so traders can continue to trade around the clock until the New York close on Saturday morning.

The Basics

Like everything else in this world, you need to know the basic terminology to get started.   

1. How To Read Currency Quotes:

Each world currency is given a three-letter code. The most common currencies for traders are: European Euros (EUR), US Dollars (USD), United Kingdom Pounds (GBP), Australian Dollars (AUD), Japanese Yen (JPY), Swiss Francs (CHF) and Canadian Dollars (CAD).

When trading Forex, foreign exchange prices are indicated by quotes, called currency pairs (the simultaneous buying of one currency and selling of another). Don't worry, it is all automated for you in one trade, the same as CFDs for shares, gold or any other traded instrument.

In any currency pair, the first currency is called the 'base' and the second is called the 'quote' currency.  The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency. In the more active traded FX crosses the like the Euro, British Pound, Aussie Dollar it is the norm for the USD to be the "quote" currency in the pair. e.g. AUD/USD = .8623. However, with the Japanese Yen, Swiss Franc, Canadian and Singapore Dollars, the USD is the "base" currency. e.g. USD/JPY = 91.23

As Forex (FX) trading essentially involves the buying of one currency and the selling of another, if you are buying the base currency you are also effectively selling the quote currency and vice versa. 

2. Understanding Spreads:

What Is A Spread?

A spread is the difference between the ask price (the price you buy at) and the bid price (the price you sell at) quoted in pips. If the quote between EUR/USD at a given moment is 1.2220/2, then the spread is 2 pips. If the quote is 1.22235/50, then the spread is 1.5 pips. The spread arguably compensates the market maker for taking on risk from the time it executes a client trade to when the broker's net exposure is hedged (possibly at a different price). 

Why Are Spreads So Important?

Spreads can affect the return on your trading strategy in a big way. Wider spreads can make it more difficult to realise a profit. The trader's sole interest when going 'long' is to buy low and sell high or when 'shorting', selling high and buying back low. Wider spreads means buying higher and having to sell lower for a long position and for the 'short' position, selling higher and buying back lower to get the same return as small spread. In summary, the wider the spread, the less return compared to a narrow spread for the same percentage move.

3. Risk Management Strategies

Stop-loss order:  The most common and important tool in currency trading is the stop-loss order. A stop-loss order ensures that a particular position is automatically liquidated at a predetermined price in order to limit potential losses, should the market move against a trader's position. This allows the trader to live to trade again.

TRUMarkets always provides stop loss levels in our Forex Trade suggestions. For whatever reason, if the market starts going in the wrong direction traders tend to panic and say to themselves, it will turn around. Then comes the anxiety of when to exit. Not only could the trader lose more money than intended, but also the trader often loses morale, as it's now much harder to make up the losses. This is the reason TRUMarkets always suggests a stop-loss level in our Forex trade suggestions. Even if the market starts going in the right direction 5 minutes later, you have not eliminated the risk of it turning around. Trading rules are there to follow, not to try to go around them. History shows that over the long term, not following a stop-loss strategy will only hurt the trader.

The destroyer any trading strategy: One of the more common and often fatal mistakes a trader may commit in a loosing trade is when they begin to think of excuses not to close the position - he or she thinks that perhaps the market will suddenly turn around and move in a favourable direction. The trader keeps thinking of this, and doesn't have the discipline to close the falling position. Don’t let this happen and set exit points when you establish the trade - you can always change them once the trade goes in your favour. 

4. Placing an order:

In foreign currency trading, it is important to set the exit points. When making foreign currency trades, you need to set two trading orders that will be used as exit points, one for selling your currency when you reach a certain profit, and the other to sell in order to cut your losses down.

Obviously, Limit (profit exit) and Stop trading (stop-loss exit) orders should be set correctly; otherwise the trade will not be executed.  Once you have chosen the foreign currency quote you wish to trade from the TRUMarkets daily charts or from TRUMarkets simple SMS text message trade suggestions, you can elect to take different exit points to TRUMarkets. Every trader's risk profile (risk they are willing to take) is different. If you do choose to take different exit points, make sure you follow the rules for placing limit and stop trading orders as detailed in the following table.
 
Placed above the current currency price 

• Buy Stop trading orders
•  Sell Limit trading orders

• Sell Stop trading order
• Buy Limit trading orders

Examples of Correct Stop and Limit Trading Orders

• If you are buying foreign currency, it means you are investing in a long position. In this case, you will set a sell limit above the current currency price, so if the currency rises, you will collect the profit you've accumulated. You will also select sell stops in the long position; so if the currency drops you will cut your losses short.
• In short position, when you are selling currency, you will set buy limit trading orders below the currency price, so you can take profits if the currency keeps dropping. Buy stop trading orders will prevent you from taking more losses, also for the short position. 

The TRUMarkets Trading desk will take the emotion out of your trading by providing strategic entry and exit points via email and SMS text message.

Our team of traders continuously scan the markets to deliver the best available FX trading ideas on the most well-traded FX crosses globally. The Forex trade suggestions are then delivered to you on a real-time basis via SMS text message and email, with both the fundamental and technical reasons why we believe this is a potential Forex trade, outlined in simple and concise language along with a chart that highlights the technical aspects of the suggestion. We also suggest a stop loss level that minimises the risk associated with FX trading. 

As well as Forex (FX) CFD trading suggestions, the members area is continually updated with expert commentary and behind-the-scenes insights into what is causing the cross rates to move. Our analysis of the top-traded currency crosses is also continually updated to reflect changing technical levels that affect future FX trading decisions.