It is fair to say that the foreign exchange market is very news driven.  For example, a central bank governor says something unexpected and there can be a significant impact on currency prices in a short period of time.  Even something as simple as a different word used from the previous month, to describe market conditions can send a ripple through the markets.  

When central banks change monetary policy and change the official cash rate, that countries’ currency may also move very quickly.  

There are also numerous regular reports which provide an insight into how well an economy is performing or not.   These can lead to assumptions on what central banks decide to do in order to stimulate an economy or keep in inflation in check, which then has a direct impact on currency prices. 

If you’re involved in forex trading, you probably have at least some familiarity with the Metatrader 4 and 5 platforms. These software solutions rank among the most popular trading platforms for a wide range of traders and advisers, thanks in large part to the value of their trading tools and resources when evaluating positions and taking action.

Although their names might suggest that MT5 is an updated version of this trading platform, the reality is that these two solutions offer different functions and features that serve distinct trading audiences. Choosing whether to use MT4 vs. MT5 can depend on your background and your trading goals, among other factors.

Known informally among forex traders as “Geppy,” the GBP/JPY pairing is viewed as a reliable indicator of global economic health. These individual currencies provide a strong reflection of economic health and policymaking in both the Asia-Pacific region as well as Western Europe.

But this reliance on GBP/JPY as an economic indicator shouldn’t mislead traders into treating it as a safe pairing for beginners to get their feet wet with. Though the pairing’s volatility is great for generating potential earnings, it also creates significant risk for forex traders. This is why “Geppy” has one of the most fearsome reputations among all forex pairs.

Index trading is a popular, easy way to invest in a group of businesses, or a representative sample of a country’s largest companies, without being forced to invest in individual companies.

For forex traders, index trading is an attractive alternative to directly investing in a specific country’s stock market. Typically, these indices are designed to offer a reflection of a given country’s economic strength. But these indices can also serve as a high-performing collection of select holdings from a single market, offering a more concentrated investment opportunity in a foreign country’s economy.

The United States and Canada have vastly different economic structures, with Canada leaning toward more liberal economic policies and looser immigration regulations than its southern counterpart. 

While the U.S. depends on the economic boost of educated, talented immigrants entering its workforce, the country also benefits from a much larger volume of trading activity, as well as a mature presence in virtually every major global industry.

As forex traders seek out stable investments that can hedge against inflation, market instability, and other geopolitical factors affecting currency prices, gold has grown in popularity over the past few years. Traders can use gold as a way to hedge against other investments, or as a safe haven that provides greater consistency over time and is more resistant to dramatic swings in valuation than many other currencies are.

XAU/USD is one of a number of gold pairings forex brokers now offer, making it easier than ever to incorporate gold as part of your forex trading strategy. If you’re eager to make better use of gold and capitalize on potential profit opportunities, here are five trading tips to keep in mind.

The bottom line is that money management will make or break you as a trader. This is a widely accepted fact.  Proper money management rules have been proven over long periods of time and are not secrets to anyone. The rules of ‘keeping your trades small’ and ‘cutting losses’ for example, have worked for hundreds of years, yet many people ignore them. 

No matter what aims you may identify when first determining what you are setting out to achieve with your trading, all aims are secondary to your primary goal — preserving your trading capital. This is by far the most important aspect of successful trading. Simply stated, you need capital to trade.

As the two largest currency markets in the world, the EUR/USD pairing offers excellent liquidity for forex traders of all types. While the pairing has seen periods of high volatility—most notably in 2010 and 2011, due in part to Greece’s economic crisis—the recent trading history for this pair has seen lower volatility and tight spreads.

This lack of volatility can be a challenge for day traders, since stable prices for the pair can limit a trader’s potential profit margin. The risk is lower, but so is the potential reward. Despite this overall stability, there are still opportunities to capitalize on EUR/USD volatility by paying attention to price movements and tracking potential market triggers.

Here’s a look at some possible day trading strategies to deploy with the EUR/USD currency pair.

With high liquidity and low bid-ask spreads, USD/JPY is a popular currency pair for experienced traders as well as beginners. Since the financial crisis in 2008, Japan’s yen has demonstrated itself as a reliable reserve currency, becoming the world’s third-largest safe-haven currency in recent years. The USD/JPY pairing also plays an important role in trading activity throughout Asian markets, since JPY is often bought or sold as a substitute for more unpredictable currencies in the region.

Because JPY is the leading reserve currency in the Asian market, its high liquidity is a benefit to traders looking to capitalize on market movement in countries whose currencies would otherwise be tougher to trade—especially at a large volume. Even though the USD/JPY pairing offers greater stability and liquidity than other pairings, traders should still study the market factors that can affect price movements.

Here’s some insight into the timing considerations and other market influences to watch when trading USD/JPY.

I believe one of the most often overlooked yet simple decision to make when developing your trading plan is the timing.  What will your trading style be like and what type of trends will you look to trade?

I also believe this is critical as trying to trade a wide range of trading styles and time frames at the same time, becomes counter-productive.  It makes it difficult for the trader to focus on one approach and master that approach.