Foreign exchange trading is probably the most technical of any type of trading. From stocks to bonds to options and futures, no market has as much participation from technical analysts than the forex market. However, just because the majority are technical traders doesn’t mean there isn’t plenty of room for fundamentalists.

No Indicators Forex Trading

Trading without indicators means you’ll likely rely more on the fundamentals like trade balances, national debt loads, central bank actions and many other non-chart indicators.

Here is a list of the items often covered by fundamental traders:

• Currency Interest Yields
• Central Bank (Monetary) Policy
• Fiscal (Government Spending) Policy
• Trade balances or imbalances
• Employment (Non-Farm Payroll Report in the United States)
• And many more

For the Long Term

Most fundamental traders perform best with a long term trading horizon usually multiple times longer than technical traders who are frequently day or swing traders. George Soros, arguably the best fundamental (no indicator) trader, made more than $1 billion in just a few months betting against his own country (England’s) currency.

If you’d like to avoid indicators clogging up your computer real estate, long term forex trading may just be your cup of tea. Maintaining a long term investment perspective allows you to ride out the ups and downs made by the short term trends made by technical traders, and realize profits on the long term movements caused by underlying economic trends.

For example, China, which has a strong economy and an excellent trade balance should see higher currency prices in the future. However, in the next 15 minutes, their currency may easily drop .25-.5% before rising several percentage points over the course of years. While technical traders would grab the small pips, no indicator traders would have the several percentage point move in the bag, netting an excellent profit.

Bad Brokers

One common scam is shoddy brokerages that operate like bucket shops. These trading scams operate on the idea that most traders lose money, and thus do not place trades representative of their clients positions. Instead, bucket shops work like casinos and offer nothing to back trader’s forex positions.

Autmated Scams

Other foreign currency scams include automated trading programs. These programs, which are sold online directly to consumers, are almost always a downright scam. They offer their buyer’s riches, thousands of dollars per day just for letting the automated computer system trade currencies by itself. The fact of the matter is this: if you had a million-dollar trading program, would you sell it online for $100? Call me greedy, but I wouldn’t. You wouldn’t either.

What is an ETF

An ETF is simply a fund of holdings that trades openly like stocks and has a ticker for easy buying and selling. All told, ETFs are simply mutual funds that trade on the stock exchanges but are generally 2-3 times cheaper than mutual funds.

Downside to Currency ETFs

There is some downsides to currency ETFs and that is that there are a limited number of choices, they charge an annual fee, and they do not offer the extreme leverage that forex platforms allow. In fact, most currency exchange-traded funds (ETFs) aren’t leveraged at all, with the highest leverage offered being 3:1. 3:1 is well under the 100:1 that many forex brokers allow.

Foreign Currency Vs Dollar, Non-Leveraged

FXA CurrencyShares Australian Dollar Trust
FXB CurrencyShares British Pound Sterling Trust
FXC CurrencyShares Canadian Dollar Trust
FXE CurrencyShares Euro Trust
FXY CurrencyShares Japanese Yen Trust
FXM CurrencyShares Mexican Peso Trust
XRU CurrencyShares Russian Ruble Trust
FXS CurrencyShares Swedish Krona Trust
FXF CurrencyShares Swiss Franc Trust
BZF WisdomTree Dreyfus Brazilian Real Fund
CYB WisdomTree Dreyfus Chinese Yuan Fund
CEW WisdomTree Dreyfus Emerging Currency Fund – Active
EU WisdomTree Dreyfus Euro Fund
ICN WisdomTree Dreyfus Indian Rupee Fund
JYF WisdomTree Dreyfus Japanese Yen Fund
BNZ WisdomTree Dreyfus New Zealand Dollar Fund
SZR WisdomTree Dreyfus South African Rand Fund

Leveraged Currency ETFs – Long and Short

ULE ProShares Ultra Euro ETF
YCL ProShares Ultra Yen ETF
EUO ProShares UltraShort Euro ETF
YCS ProShares UltraShort Yen ETF

Forex Scalping Techniques

There are a few techniques that will make your trading easier. The first technique, although not so much a technique in itself, is to open an account at a forex broker that has thin spreads. When it comes to making money scalping the foreign exchange market, low pip spreads are preferred.

Scalping Forex with Moving Averages

Moving averages are the most popular indicators with forex scalpers. One well-known technique is to use a short term and long term MA and buy/sell when the two cross. Common choices are the 10, 15, 20, 25, 50, 75, 100, and 200 moving average either calculated in simple form, or exponentially.

What Makes Good Technique?

Each trader needs to find their own niche, their own techniques, but there are some important pieces of information all traders need to know. First and foremost, you need a solid plan with good entry and exit practices. Also, you need to be quick on your feet, and ready to dump a position when it runs out of favor. Finally, you need to be yourself, adapt your techniques around your own trading style and time you have to trade each day.

Trading Forex on a Mac

It is not the computer itself, or the operator for that matter, that prohibits access to a forex platform. As you you may or may not know, forex platforms are complicated pieces of software that must safely and securely handle millions of dollars per day in trades from the end trader to the forex broker. Some forex brokers, due to their size and their demographic, leave Mac and Macintosh computers out of the fray, choosing to open their doors to only Microsoft or Linux operating systems.

Forex Platforms with Mac Support

There are only a handful of forex brokers that allow their clients to trade forex on a Mac. These brokers are those that utilize a browser based platform that loads within your internet browser rather than directly on the computer. Often, these platforms will not work on the preloaded Mac browser Safari, but do work on a variety of other third party browsers including Firefox and Google Chrome.

When Can Mac Users Trade Forex?

Trading forex on a Mac outside of browser based trading platforms is unlikely to come any time soon. There has long been a bias amongst business users, particularly forex traders and forex brokers, that the Microsoft operating system is superior for business. Whether this is or isn’t true, is up for debate. However, it remains that Mac users are unlikely to be trading forex on a Mac any time soon.

Making a Living with forex

Making a living with forex may seem to be just a pipe dream, but many, many people are using the foreign exchange market as a way to provide for themselves and family. However, we can’t get too caught up in making millions, as very few traders ever make enough with forex to make a living.

Trading Forex Odds

Of all the traders that try to make millions with currencies, very few succeed and the majority fail miserably. Statistics prove that of all the traders who will set out to make a living with forex, only a small fraction will, while 90% of traders will lose everything in their first year. However, this isn’t always the case. Famed forex trader George Soros rose to be a billionaire with just one successful forex trade!

Where to Start Trading For a Living

To make a living trading forex, you’ll need to be well educated about the ins and outs of the foreign exchange market. Certainly, you wouldn’t try to make a living as a surgeon if you hadn’t yet completed medical school, and you can’t expect the same results with forex. Making money takes time, patience, and the ability to learn. If you’ve got those three criteria met, you’ll find yourself quickly advancing in the foreign exchange market, and making a living may not be so far off!

What is a Bucket Shop

Simply put, a forex bucket shop is a “forex broker” that does not back all of its positions with real trades on the currency market. These firms instead gamble against their clients, hoping that the people who open an account will gamble away their money. Forex bucket shops should be avoided at all costs, as many are prone to failure when good traders make a lot of money, and others are downright scams.

How Bucket Shops Work

Forex bucket shops rely on the statistics that roughly 90% of all new traders fail and lose all of their money. Knowing this, they allow traders to trade with huge amounts of leverage that the bucketshop itself knows is likely to wipe out their client. Because the forex bucket shop does not actually hold positions on the forex market, it collects all the money their clients (traders) lose. What may appear as a shady business practice isn’t exactly illegal, however it is in a traders best interest to identify and avoid any forex bucket shop brokerage operation.

Signs of a Bucket Shop

Bucket shops are almost universally found by the following criteria.

*Low or No Minimum Investment
*High leverage of 200-400:1
*Acceptance of credit cards as a way to fund an account

Free Forex Trading Simulator

One of the most popular free forex trading simulators is the one offered by Oanda. Also known as a demo account, or a practice account, Oanda’s free simulator will allow you to practice using indicators and other items specific to the platform.

Why Use a Forex Simulator

Unfortunately, nearly 95% of all traders who trade real money fail within a year. Usually, this is the result of poor trading form but can also be due to other factors including not enough time with a free forex simulator. Before trading with real money, you should be competent with the forex platform and have at least a few hours worth of demo trading through a free forex simulator.

Start Your Forex Simulation

A new trader should never turn down the opportunity to practice forex for free. Getting started with a forex simulator, demo account, or practice account will enable you to learn the techniques of forex trading without any costs.

Not interested in testing different indicators? Check out our article on trading forex without indicators.

Forex Hedge Funds

Because the foreign-exchange market (forex) is an over-the-counter marketplace, the barriers for entry into this exciting field are very easy to break through. The market is globalized, thus there are no central regulating authorities. As such, forex hedge fund managers can launch their own funds simply by meeting the regulation of the country in which the hedge fund wishes to operate.

Best Fund Countries

The best countries to release a forex hedge fund are those that have a significant flow of capital (to attract investors) as well as limited regulation and oversight. Unfortunately, from the perspective of the hedge fund manager, the United States is unlikely the best place to start. Expensive barriers to entry as well as complicated accounting regulations make it impossibly expensive for upstart forex hedge funds.

Forex Hedge Fund Fees

Hedge funds are some of the most expensive, albeit some of the most profitable, investments for wealthy clients. Ordinary, a hedge fund manager receives as much as 15-20% of the profits each year as well as a 1-2% fee on all accounts at the fund. If the forex hedge fund were to produce returns of 30% on a $100 million portfolio, the hedge fund manager would receive his annual 1-2% cut ($1-2 million) as well as a 20% bonus on the hedge fund’s returns ($6 million at 20%).

Forex Hedging

Imagine you own 50 lots of EURUSD and think the price may soon plummet. You choose to sell 40 lots, which brings your net exposure to EURUSD from long 50 lots to long 10 lots. Should the EUR/USD, you’ll only lose one-fifth of what you would have if you did not hedge.

Unfortunately, NFA regulated forex brokers cannot allow hedging to their clients. Previously, forex traders could long 50 lots of EURUSD and simultaneously going short 40 lots, for a total of 90 lots. Now, with NFA regulated forex brokers (US Based Forex Brokers), the trader can only be long or short, not both. So, when the trader seeks to sell 40 lots of EURUSD, the forex broker is forced by regulation to simply lower the total net position to long 10 lots of EURUSD.

How to Hedge with Any Forex Broker

To hedge your positions with a US broker, you’ll have to open two accounts, one for long positions and one for short positions. Unfortunately, this can be cumbersome, as well as make accounting more difficult.

List of Brokers that still allow hedging

Here is a compiled list of forex brokers that can legally allow their clients to hedge their positions without opening multiple accounts:
ACM

ActivTrades

Admiral Markets

Advised Trading

Alpari UK Ltd

Apex FX Trading

Arab Financial Brokers K.S.C.C.

ATC brokers

ATFX – Able Trend Forex

ATG Marketplex (non-US accounts)

Atlantic FX

AvaFX

AVS Carter

Baron Forex

BroCo

C.I.M Banque

Charter FX

CG FOREX

dbFX

Deltastock

Deutsche Bank AG

EFX – England Foreign Exchange

EXNESS

Exto Capital

Fastbrokersfx

FCMarket

Fibo Group Ltd

FIGfx

Fin Market

FinOdds

Forex Capital Trading

Forex Ltd

Forex Metal

Forex Ukraine

Forex Trading Edge
Forex4you

ForexCT

Forex FS

Forexial FX Solutions

Forex Place – 4XP

ForexYard

ForInvest Group

FX Clearing

FX Open

FX Solutions UK

FX Trading

Fx-Pro

FXcast

FXCBS

FXCH

FXCM UK

FxCompany

FXLite

FXM Financial Group

FxPro

Gallant FX

GCI Financial

GIGFX

Global Clearing Group LTD

Global Futures

GO Markets

GTL Trading

IamFX

IFC Markets

iForex

IHI – Investment House International

Interactive Brokers

Interbank FX (2 split accounts)
InvestTechFX

JadeFX

KVB Kunlun

Lite Forex

Mandus Invest SA

Marketiva

Master Forex

MBCFX – Multiple Banks Clearing

MIG BANK

MoneyForex

Neuimex

NordMarkets

NTWO Capital Markets

OneCorpFX

PFGFX – Pro Finance Group

Poltek FX

Prime4x

Pro-Forex

PronetFX

Real Trade Group, Ltd

Saxo Bank

SFXB – SwissFXBroker

Sigma Forex

SmartTradeFX

Spot Trader FX

Swiss International Financial Brokerage K.S.C.

Tadawulfx.ch

TGM – Taurus Global Markets, Ltd

The Collective FX

Tradeview Forex

Uni-FX

UWC – United World Capital

Vantage FX

Varengold Bank FX

Windsor Brokers Ltd

X-Trade Brokers

XForex

10Pips

1pipfix