Welcome to the Forex Factory
The forex factory is where we gather all the crucial definitions and keep updated with fx news. When you get into the market, you will need to know all the terminology. The jargon of any industry is important if you want to succeed in an industry that relies heavily on terminology for efficient communication.
The top 10 forex brokers have great services that will work for you if you know the terminology. There is no reason you should run into obstacles because you do not understand what the broker or other traders say to you.
Forex education is a big part of what we do here. The world of forex is complex and navigating it is difficult. The forex factory is a big part of the forex education we give.
Besides learning terminology and acclimating yourself to what you need to know, we also offer fx news. As any trader worth their salt will tell you, staying updated is a big part of the trades you will make.
Knowing everything that is going on around you is a big part of the decisions that you will make when you are trading. The forex factory makes sure that you know everything that is going on at all times.
The forex market is a huge challenge that requires you to know a lot before going in. The forex factory is a place to get some of the educational resources that will sustain you through all the things you will need to do as a trader.
There are formal degrees for forex traders. However, not everyone can afford to get them. That is the reason we have the forex factory. It is a place for you to learn part of the things we include in our curriculum.
Research and acclimating to the language used is just the start. You will learn more than this to survive but it helps to get into the curriculum knowing what concepts are.
A decision made in the forex market can mean profits or loss. This depends on how you understand what you are about to do. Losses occur because people do not learn all the things they need to know. Before you go in, visit the forex factory and start learning all the vital things you need to know to get this done.
Even the people who are more advanced than beginner continue to learn every day because there is always something that you may have missed. It is important to go back, get the fx news and revisit the things you forget or are not sure about.
Success in The Market
As anyone working in the top 10 forex brokers will tell you, success in the market correlates directly to education and fx news. What you know will be the difference between success in the forex market and failure.
That is the reason you need to maximize your chances. Start with the education and then move on to gain experience as you stay updated with the fx news.
Forex Factory - Frequently Asked Questions (FAQ)
1. What is forex trading?
Forex trading is the activity of buying or selling currencies. Currency exchange is carried out by central banks, banks, corporations, individual traders and investors from financial institutions. It can be done for profit, making international trade possible and tourism.
2. How do you trade forex?
Trading in forex needs you to know how it works first. After that, all you need to do is come up with strategies based on experience and how well you know the market. You simply choose a currency pair and then monitor it for changes that will be profitable for you in case you choose to sell or buy.
3. How does forex trading work?
The market is based on speculation on the fluctuation of currencies between the two countries. Depending on how prepared you are and how smart the decisions you make are, you could make money trading currencies or you could lose everything if you make mistakes.
4. How do you start forex trading?
First, you learn everything that you can learn about forex trading and then, you get to experiment in demo accounts with platforms that allows you to understand how it works. After that, you can get a broker and start trading on the platform.
5. How do beginners trade in forex?
As a beginner, trading in forex is not something that you just want to jump into. You will need to undergo forex factory before you can be ready to do any trading. For beginners, the process starts with education, fx news, demo accounts practice, development of strategies and discipline.
6. What is leverage in forex?
In forex, leverage is the ratio of your funds as a trader to the size of the credit from your broker. Leverage if capital borrowed to increase the returns you will get if the trade goes your way. The leverage in forex is usually much higher than the capital invested. Sometimes as high as fifty times.
7. What is the forex market?
This is the market where the participants get to buy, sell, speculate on and exchange currencies. It comprises of banks, corporations, central banks, investment companies, hedge funds, and forex brokers. It is the largest market with over $5 trillion transacted daily. That is more than the futures and equity markets combined.
8. How do you read forex charts?
First, you need to understand that there are many types. However, they all use the same premise. You will see indications of the open price and the closing price among other facts that can help you make predictions. It is all about getting the forex factory that will allow you to understand what each of the charts means.
9. How can I invest in the forex market?
There are several ways that you can invest in the forex market. They include; trading currency pairs in the forex market, foreign currency futures, foreign currency options, and exchange-traded funds. You can also get into certificates of deposits and foreign bond funds
10. What is a pip in the forex market?
Pip stands for the point in percentage and it is a measure of very small changes in a currency pair in the forex market. It is measured in terms of the quote or the underlying currency. It is a standard unit and represents the smallest amount by which a currency quote can shift or change. Usually, it is $0.0001 for currency pairs related to the U.S. dollar.
11. How do you trade forex successfully?
There are a few fundamental things you will need to understand to become a good forex trader. First, you will need to get a forex education, always keep updated with fx news then you will learn how to trade using demo accounts. As you do all that, you will develop strategies that will help you trade and then you can get into the real market using real money and strategies you developed.
12. How do you learn forex trading?
The best way is by the use of course. We have a great free course with eleven levels that will take you from the basic terminology to development of strategies, knowing your personality and how you can come up with strategies that will net you the kind of money that is useful. Knowledge is the foundation of becoming a trader.
13. How to make money on forex?
In the forex market, the financial logic is just the same as you would find in places like the stock market. The goal in forex is to exchange one currency for another with the expectation that the price will shift and add value to your preferred currency in the pair you are trading. Always make sure that you finish the training before you get started.
14. What is hedging in forex?
Hedging is a method veteran trader in forex use to minimize losses and lock in a profit. Hedging is buying and selling simultaneously within a short time. That way, you are not exposed for long. It will shield you away from movements in price that could affect you negatively.
15. What is ‘spread’ in forex?
The spread refers to the price difference between where a trader may buy or sell an asset. In forex, it is the difference between ASK and BID. It shows you broker service cost and replaces transaction charges. It is usually measured in pips.
16. What time does the forex market open?
The forex market is always open 24 hours a day in varying parts of the world. It is open from 5 p.m. EST on Sunday to 4 p.m. EST on Friday. At any given time, there is always an open market. There is overlap too between the market in one region closing and another opening somewhere else.
17. What is a ‘swap’ in forex?
In forex, ‘swap' refers to an interest fee that is paid to you or charged to you at the end of the trading day. When you trade-in margin, you get interest in your long positions as you pay interest on short positions. The swap is kind of like an added incentive or bonus to hold trade long term and in places where you have a negative swap, a deterrent.
18. Is forex trading legal?
In many countries, it is legal. For some reason, it is illegal in some parts of the world. Before you start your education, you will need to find out if it is legal in your country. There are regulators in the world who protect investors and make sure that nothing illegal happens. During trading, you must also ensure that you do not engage in ‘Insider Trading’ as it could land you in jail.
19. What is the margin in forex?
When trading, you will be required to put up a small amount of money as capital that makes sure the account is open and maintain your new position. This capital is known as the margin. It is also thought of as collateral or deposit in good faith. Margin is a fraction of your funds that the forex broker puts aside from the account balance to keep your trade open.
20. What is ‘scalping’ in forex?
In the forex market, scalping is when you are trading currencies using analysis presented in real-time. The whole point in scalping is that you make a profit when you buy or sell currencies and holding the position for a very limited time and then closing for small profits.
21. How do you use Fibonacci Retracement in forex?
This is a method of trading that is best used when the market is trending. The premise is to buy (go long) on a retracement when the market trends up and to sell (go short) on a retracement at a Fibonacci resistance level when the market trends down.
22. How much do forex traders make?
Averagely, the profits you make depend on how much you risk in a trade. If you risk $1000, you can make profits that average $20,000 a year. However, many variables could lead to losses or profits that are not substantial. The numbers provided here assume that you are a good trader with solid strategies.
23. Is forex trading hard?
The simple answer is yes. Trading is very hard if you do not know what you are doing. The best way to overcome this is to learn everything that you will need to know before you start any of it. If you know what to look at and how to come up with strategies, the struggle becomes less high-stakes and much easier.
24. How do banks trade forex?
Banks trade the largest volume of forex. The banks trade currencies with each other using electronic means. They do this by facilitating transactions on behalf of their clients and do their speculative trading from their desks. They have their segment in the forex market that is called the foreign inter-bank market.
25. How do you trade forex profitably?
The best way to make profits is to have the right kind of knowledge, experience, strategies and good leverage. Forex trading is supposed to be boring and slow. If you are making trades that fill you with unbearable anxiety, then you are doing it wrong. Trading profitably takes a combination of all the things you know and the skills you must apply what you know.
26. How do forex brokers make money?
Brokers execute buy/sell orders for you and for that service, they charge a small commission per trade or for every spread. A broker can charge both commission and a spread for a trade. If you find a broker who claims to give commission-free trades, do not trust that person.
27. How do you transfer money from forex account to bank account?
You can use withdrawal forms that need to be filled online or printed out and filled by hand. You can also use ACH transfers that are done electronically between the bank account and the broker. Most people use ACH but not all brokers provide ACH capabilities.
28. How do you open a forex account?
You will have to find a broker first. Then, you will be taken through the process of opening the account. It is not a strange or new process. It is very similar to what you do when opening a bank account. They will need all that information. Always make sure that you choose a broker well.
29. How do you conduct day trades in forex?
The best thing to start with is to trade when the London and/or US markets are open. Use the one-minute chart and trade only in the direction the trend is headed. The details for how you wait for pullback among other things are contained in the details of your forex education, which we provide you with.
30. How do you trade forex options?
Options work by giving you, the trader, the right but not the obligation, to exchange currencies at a rate that is pre-agreed on a specified date. Most people use forex trade options to supplement the income that they get from regular forex.
31. How do you calculate forex profit?
When calculating the profit or loss of a position, you will need the position size and the number of pips the price has shifted. The profit or loss is equated to the position size multiplied by the movement of the pips.
32. What is spread betting forex?
When a company is offering currency spread betting, they will quote two prices; the ASK and the BID. Forex spread betting is a form of betting that is dependent on taking a bet that is determined by the movement of prices on currency pairs.
33. How big is the forex market?
The global market is valued at an astonishing $1.93 quadrillion ($1,934,500,000,000). This is 2 and a half times larger than the GDP of the entire planet. Every single day, $5.3 trillion is traded. It is the world’s largest market.
34. Can you trade forex on E-trade?
E-trade does provide forex services. You can trade currency pairs and forex options online, using their network of customer service personnel, professionals in the investment business and advisors in the forex market. You can do this over the phone or at any of their branches. You will also get a demo account on MT4. The minimum deposit to start trading is $100.