Choosing the Right Forex Trading Platform

Every day, over four trillion dollars are traded through accounts in the foreign exchange market, representing the largest financial market in the world. As such, it is important for traders to carefully choose a trading platform that supports their undertaking, and maybe, gives them a competitive advantage in the forex market. It is important to understand that there are a numerous trading platforms that offer trading services to investors. As such, anyone intending to invest in trades has the obligation to do a good homework before settling on a particular trading platform. Here are a few tips that can help you choose the right forex trading platform (commonly known as the forex broker).

The regulatory compliance of the trading platform

Depending on your target brokers, most reputable forex trading platforms are regulated in their country of operation. For instance, all forex trading platforms in the United States are members of a self-regulatory body known as the National Futures Association. Besides, these brokers also get licensed by a state Licensure to allow them to operate within its territories. Therefore, only trade on platforms that are recognized by the regulating bodies within your target jurisdiction.

Currency pair available

As a trader, you may need to consider the different currency pairs that are availed for your trading. if a vast pool of currency pairs are available, you will have the advantage to trade on the pairs that have the highest liquidity.

Some of the commonly sought after currency pairs include the USD/JPY, the EUR/USD, the USD/CHF, and the GBP/USD. Therefore, choose a trading platform that offers the currency pairs that are of interest to you.

The customer support available

No one would want to trade on a platform that does not give them timely support whenever an issue arises while on their trading platform. Most platforms offer a combination of user-support to their customers or clients. Some provide an onsite instant messaging, dedicated telephone numbers, email support and some also provide a self-service feature. In some instances, some service providers provide a combination of these means of communication as support to their investors. Therefore, choose a forex trading platform that has a prompt response to your issues, as well as provides a wide pool of user support options you can choose from.

The usability of the trading platform

Your output in the forex trading market can be affected to a great extent depending on the ease of use of the trading platform you choose. Poor usability of the forex trading platform has a potential to hinder your forex analysis. It is therefore of great importance to choose a trading platform that is easy to understand, highly navigable and is generally appealing. If possible choose a trading platform that supports multiple and distinct ways of accomplishing any trading task. Besides, the trading platform needs to support different devices that access it. In this regard, only choose a forex trading platform whose site or app is non-dependant on the device used to access the platform. It should be responsive to different devices, i.e. desktops, and handheld devices, and therefore should be mobile friendly.

Forex Fundamental Analysis

Forex trading is one of the most lucrative businesses in the world today. In most cases, you end up making money within a day or even some few hours. However, it can also be a risky business if one does not study the inequity market well. To study the market, one considers economic factors that affect the worth of a country’s currency in the Forex market. These factors include; interest rates, political events, unemployment rate, inflation rate and central bank policy among others. It is good to note that these factors change over time and the ability to analyze them is vital in the Forex trade.

Therefore, fundamental analysis is a method of Forex trade valuation. The investors use social, political, macroeconomic and macroeconomic factors to value stocks. Forex fundamental analysis tries to measures the value of a currency based on data found on the economic calendar. The economic calendar contains information and data on economic indicators and when their release date. Let’s now discuss each of the fundamental indicators.

Political factors

The political climate of a country affects its economic status to a great extent. This is because it affects both fiscal and monetary policies of a government. For example, when a country faces political tension the government restricts spending on its major investments. In some cases, the political tension results in civil war. The wars cause a destruction of property and major investments. For a country to finance destroyed property it has to borrow money. The borrowing results in cheap capital and hence lower interest rates. This has a major effect on the currency exchange rates. That is, the value of the currency falls due economic uncertainties. Hence as a Forex trader, it is good to consider this factor.

Macroeconomic factors

These are general economic factors that show the economic health of a country. They include interest rates and the goods and service that a nation produces. These factors have adverse effects on the Forex trade market. For example, when a country (let’s say Japan) has unique goods or services, most countries must convert their currencies to Japanese yen to access that good. This increases demand on the Japanese yen. An increase in demand raises the value of a currency in the Forex market. On the other hand if country import goods more than it exports, the value of its currency falls. Therefore, as an investor, you have to consider the balance of trade of a country for you to trade with its currency in the Forex trade market. Other economic factors one should consider is deficit and surplus and inflation rate.

Global monetary power

Here one considers the policies of major economies. These are the country that their currencies do well in the Forex market. By considering these economies and their policies one gets an idea of their money supply. Hence this can help in projecting interest rates, volatility of the stock market and emerging market growth potential. After understanding the global central bank policy, we compare them to the other economies. This helps to project the trends of the Forex trade. For example, low-interest rates on these banks show a risk in Forex market while high-interest rate s the opposite.

Forex analysis is a complex process when analyzing Forex trade. However, it is a more safe method which guarantees returns. All you have to do is master the basics and you will be successful.