Investors of all stripes use hedging as a strategy to protect one position from adverse price movements. Typically, hedging involves the opening of a second position that is likely to have a negative correlation with the primary asset being held, meaning that if the primary asset’s price makes an adverse movement, the second position will experience a complementary and opposite movement that offsets those losses.

When it comes to trading, it is widely accepted that there are two main approaches to your analysis of potential trades: fundamental analysis and technical analysis.

Technical analysis is widely used by private traders and is becoming more and more popular. It involves the study of a financial product’s actual price to form an opinion on the likely future direction in which the price will move.

Fundamental analysis involves assessing the broader economy and what may specifically impact the financial product or asset you are going to trade. It is most heavily used by traditional stockbrokers and fund managers.

One of the things underpinning the effectiveness of fundamental analysis is that all market participants act rationally. Therefore, the value of indices, commodities, and currencies will track a reasonable expectation based on fundamental influences.

If you’re new to trading forex, you’re probably eager to jump into the deep end and learn through trial and error. And, if you have a basic understanding of trading fundamentals, you probably have a vision for how those trades will be executed: opening a position and then selling once prices have risen and you’ve claimed your profit.

In reality, though, trading is far more complex—and the pending orders forex traders use vary widely in how they’re used to fulfill your trading goals. While some forex order types are designed to open a position at the market rate, for example, others are more focused on entering at a specific price.

Similarly, while certain orders are executed with the intent of holding your position until further notice, others are designed to trigger an automated sell-off if prices move below a certain threshold. If you don’t know the differences between these different order types—including the relative advantages and disadvantages each one offers—it could limit your trading ability while also causing you to execute the wrong type of trade. 

In the wrong situation, this could lead to significant losses that could have been avoided with a little education into the different types of orders at your disposal. With that in mind, here’s a look at the most common order types you need to know when getting started in forex.

In forex trading, there’s ample logic behind the rhyme “the trend is your friend.” Trading in the direction of a strong trend both minimizes your risk and increases your potential profit.

Margin and margin requirements are something that no forex trader can afford to ignore. Margin has often been labeled a “good faith deposit” to open a position.

Margin is usually presented as a percentage amount of the full position, 0.25%, 0.5%, 1%, 2%, and so on. You can calculate the maximum leverage you can use with your trading account based on the margin required by your broker.

Naturally, all traders are looking for the best technique to help them achieve their trading objectives. Range trading is an increasingly popular approach to the market, more people are looking to it as a means to take advantage of what the forex market has to offer. 

For some people, the idea of range trading—or even the term itself—is alien. But that is about to change. This article breaks down range trading, explaining what stands behind the strategy and how you can go about implementing it.

When you choose to engage in forex trading, you’ll quickly come to understand that it pays dividends to make use of any and every tool that is available. These tools should help push forward your trading strategy, improve your output, and effectively help generate more profit. Looking at what could very well take your forex trading efforts to the next level, forex trading signals happen to be something that no active trader can really afford to ignore.

Signals are electronically transferred titbits of information that you can receive via email, SMS, text, and—in some circumstances—even via social media platforms. This information often represents critical need-to-know data related to the market. In many ways, a signal is an on-the-fly update that you can incorporate into the forex trading decisions that you make.

Technical analysis is the study of actual movements in the price of a financial product.  However, in my opinion, technical analysis is less about trading and more about the study of mass psychology. We study the way people react in certain situations in the market, which is quite prevalent when identifying and trading using chart patterns.