Most Influential Forex Regulatory Bodies

Forex regulatory bodies

Forex is the largest and most liquid market on the planet. There is no centralized body governing the currency trading market, but on the other hand, there are several independent bodies which supervise forex trading around the world.

When choosing a forex broker, it is extremely important to choose the one that is regulated by a financial authority in a respected financial center. Below is the list of the most respected forex regulatory bodies all around the world.

1. ASIC (Australian Securities and Investments Commission)

Established in 1991, the Australian Securities and Investments Commission is Australia’s corporate, markets and financial services regulator.

2. CySEC (Cyprus Securities and Exchange Commission)

CySEC is the financial regulatory agency of Cyprus. Many forex brokers are based in Cyprus, which is not surprising considering the fact that Cyprus boasts the European Union’s lowest rate of corporation tax.

3. FCA (Financial Conduct Authority) – the UK

UK’s Financial Conduct Authority is deemed to be one of the most reputable regulatory organizations in the world. Its role is to regulate financial firms that provide services to consumers, and to maintain the integrity of the financial markets in the United Kingdom. It operates independently of the UK government.

4. CFTC (Commodities and Futures Trading Commission) – United States

The United States are home to some of the biggest forex brokers in the world. In this country, trading is highly regulated, and obtaining a license is associated with high costs. CFTC is a regulatory agency established in 1974, and it protects individuals in futures and commodities trading. Considering the fact that futures includes the currency market, the CFTC consequently protects forex traders as well.

Another regulatory agency in the United States is called National Futures Association, and its work is overseen by the CFTC.

5.  BaFin (Federal Financial Supervisory Authority) – Germany

BaFin is the financial regulatory authority in Germany. This regulatory body supervises around 2,700 banks, 800 financial services institutions and over 700 insurance undertakings.

Other significant regulatory bodies include FINMA (Switzerland), Swedish FSA, AMF (France), DGCX (Dubai), BCSC (Canada), FSMA (Belgium), CSRC (China) and others.

Top 5 Forex Trading Books You Should Read In 2018

If you are just starting out with forex trading, or you are an experienced trader who wants to improve your trading capabilities, books about foreign exchange market can be a valuable resource of knowledge.

1. Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude by Mark Douglas
Year of publication: 2001

This book is one of the most sought-after books about forex market, and it focuses on the mental aspects of the trading business. This book emphasizes the significance of having a healthy mindst when entering the forex market and offers a list of steps you need to take in order to train yourself to overcome various obstacles you may encounter while trading.

2. Currency Trading for Dummies by Brian Dolan
Year of publication: 2011
“Currency Trading for Dummies” is a good choice for traders who are just entering the world of foreign exchange. Brian Dolan is a forex market savvy, he was the chief currency strategist at Forex.com, where he oversaw fundamental and technical analysis. This book offers clear and easy to comprehend instructions on the forex market, and if your are a begginer trader, you will not make a mistake if you choose this book to be your guide into the forex world.

3. Naked Forex: High-probability Techniques for Trading Without Indicators by Alex Nekritin and Walter Peter
Year of publication: 2012
Long before computers and calculators, traders were trading “naked”, which is the simplest and oldest trading method. This represents trading without technical indicators, and this is exactly what this book is about. The authors of this book consider naked trading a simple and superiour way to trade. It is suited to those traders looking to quickly achieve expertise with a trading method.

4. How to Make a Living Trading Foreign Exchange by Courtney Smith
Year of publication: 2010
This book explains how to achieve the main goal of many traders – to make a living trading forex. The book starts with an introduction to the Forex market. The author then presents six moneymaking techniques for trading Forex, including his Rejection Rule. This book also unveils powerful risk management techniques and trading psychology strategies.

5. Thirty Days of Forex Trading: Trades, Tactics, and Techniques by Raghee Horner
Year of publication: 2006
Thirty Days of Forex Trading is both a trading journal and an instruction book. It is written especially for beginners and it describes one month of Horner’s trading experience. This book is extraordinary as it showcases how a professional trader operates on a daily basis. It can serve as a guidance for your own trading setuo in the future.

We hope you find this article helpful, and that unliest one of the above-mentioned books will find its place on a shelf at your home.

Top 5 Forex Expos To Visit In 2018

Forex expos are events which gather representatives from forex-related companies and traders who are willing to obtain additional knowledge about forex market.

These events are very popular because they allow traders to share their experiences, and to make connections important for their business. There are several Forex events held annually and we present you top 5 that you might find beneficial.

London Financial Partners Expo 2018

The 10th Financial Partners EXPO is an event designed to bring closer Forex&Crypto brokers and Affiliates. Financial Partners Expo is the largest dedicated expo tailored especially for affiliates and introducing brokers and is expecting over 5,000 visitors.

This event is useful for the ones who want to interact with top affiliates and gain valuable information regarding industry’s developments.

Dates: February 7-10, 2018

Location: ExCel London, UK

Traders Fair and Gala night Thailand

Organized by FINEXPO, this event will host over 20 exhibitors and 1500 attendees from all over the world. This event is a perfect opportunity to gain valuable data on trading, connect with relevant people from the industry, have fun and win interesting prizes. The luckiest person at the Gala dinner will win a VIP prize – motorcycle KAWASAKI NINJA 250.

Date: February 3, 2018

Location: Shangri-La Hotel, Bangkok

China Forex Expo in Shenzhen 2018

The 7th China Forex Expo is a two-day event for traders, affiliates, investors, blockchain, fintech companies and brokers from all over the world.

This event represents a great opportunity for brokers to promote their online forex trading platforms and to get easier access to the Chinese forex market.

Dates: May 18-19, 2018

Location: Great China International Exchange Square, Shenzhen

B2B Forex Forum in Sochi 2018

This event is exclusively for professionals from the Forex and Stock Exchange industry. The forum will discuss crucial issues of the Forex market in Russia including regulation and licensing of the financial industry in Eastern Europe.

Dates: August, 2018

Location: Sochi, Russia

Crypto Expo Asia 2018

Crypto EXPO Asia forum is an event especially tailored for the ones interested in bitcoin and blockchain. Crypto EXPO Asia 2018 will welcome about 50 speakers and over 3,000 attendees. Everyone who becomes the part of this event will get a chance to explore the phenomenon of crypto world. Except large exhibitions, panels and discussions, this event will include fantastic prizes, live performances and AfterParty as well.

Dates: October 25-26, 2018

Location: Suntec Singapore Convention & Exhibition Center

Types Of Forex Market Instruments

Currently the total value of Forex trading is more than $4 trillion per day, which is higher than traditional derivatives whose daily trading volume is $3.7 trillion. The most common instruments traded in the foreign exchange market are the following:

Spot Currency Transactions (Spot Market): These trades are commonly known in English as  Foreign Exchange Spot Trading . In this case consist of buying / selling currencies with a shipment that can last up to 2 business days of the contract of the transaction.

Foreign exchange-based financial options: These  options  are known as  Foreign Exchange Options , which provide the buyer with the non-compulsory right to acquire or sell a currency for another at a predetermined price or rate on a predetermined date in the contract. It is a derivative of the Over The Counter type (it is not traded in a central market, transactions are performed directly between the two parties).

Foreign Exchange Futures Contracts:  These contracts, also known as  Foreign Exchange Futures , consist of a currency exchange agreement at a predetermined date in the future at a price specified in the contract. Unlike options trades, Futures transactions are not traded in Over The Counter markets.

Forward Currency Futures: It is called Outright Forward and basically consist of an exchange of one currency by another at the price of a pre-established future date.

Non-traded currency contracts: These financial products are known as  Nondeliverable Forwards . These are contracts that are usually traded on a trans-territorial basis and in which settlement is carried out based on different currencies. They offer the investor the possibility of having exposure to a currency, but without having to pay or receive such currency.

Foreign exchange swaps: These instruments, also known as Foreign Exchange Swaps, are contracts between two counterparties (a buyer and a seller) for the purchase and sale of a certain amount of foreign exchange (for the exchange of a future series of interest payments and Principal) in which one of the counterparties pays in one currency while the other party pays in another currency. There are currently several types of currency swaps.

Investment fund management companies

These are companies that operate in the foreign exchange market in order to gain access to the financial markets of different countries in such a way that they can invest in different assets such as stocks, bonds and others on behalf of their clients and with the capital of these .

Private investors (traders) through intermediaries (brokers )

Today there are companies that specialize in providing services of participation and support to private operators in the Forex market, offering different types of services designed for this purpose. In this way, we have brokers or financial intermediaries, which offer operators the possibility of opening a trading account in a particular currency (usually USD or EUR) to carry out foreign exchange purchase and sale transactions through channels (In most cases transactions are carried out over the Internet or via telephone), in order to obtain income based on the exchange rate fluctuations of the different currencies against each other (for example, against the US dollar , Dollar against the Yen, Euro against the Yen, etc.).

Due to their importance in the financial system and the seriousness of their work, these firms are usually subject to various controls and audits depending on the country of origin. However, when choosing a broker to operate in the market, the trader must investigate its reputation, strength, quality of services and legal framework under which it is governed.


What Is Grid Trading?

We can define Grid Trading as a famous trading strategy that allows the trader to enter the market no matter what movement he has. As mentioned at the outset, the philosophy behind this system goes against the principles accepted by most monetary management and trading in general. In this case, profits are obtained when once a purchase order is executed, for example, the price moves to the next higher band where a sales order is executed or even another purchase. As we will see later, it is a system that requires discipline, patience and capital on the trader’s part. Those who operate regularly based on Grid Trading,

Likewise, it can be used to operate during the 24 hours of the day or to stop the operation at any time, in addition it is possible to withdraw the capital at the desired moment.

This system consists of drawing a series of horizontal lines in a price chart in such a way that there is always the same distance between a level and the one that has the same. Each line drawn corresponds to a price and in all places a purchase order and a sales order are placed, which have a profit take (Take Profit) that is equal to the separation between the levels. In no case do they associate stop type orders.

The Grid is defined by a series of variables that provide a huge variety of possibilities when it is used as a trading system since we can configure them with an infinite amount of values. Depending on these parameters, systems based on Grid Trading can be very different from each other and even opposite. In this article we will focus mainly on the “Classic” version to call it somehow, which does not use Stop Loss, where the levels are equidistant from each other and fixed and the Take Profit associated with each operation is equal to the distance in Points that exist between the different levels.

In the course of time, a Classic Grid accumulates latent losses in the trader’s account, while at the same time the balance grows in a linear fashion. Therefore, the profitability of the Grid depends totally on the number of occasions when the price of the asset crosses the various levels. In this way, if we have a grid of a defined amplitude and density of levels, there is a minimum number of level crossings that need to be produced continuously (without the price escaping its limits), from which The system produces profits, since the sum total of profits reaches to exceed the sum of latent losses that accumulate

How do grids work?

To understand how the grids work we will give an example. First imagine that they have a candlestick chart in the EUR / USD in a 30-minute time frame that spans several days, including the weekend, which was included for later study of the roll overs effect.

Now we place the lines of the grid every 30 pips, separating the lines of type Bid and the type of Ask through the spread, which for effects of the graph we can assume constant and about 2 pips. In this way, when we open two operations at the same point, the purchase operation opens in the Ask and the sale in the Bid. When we close the positions, the purchase is at the Bid level and the sale at the Ask level that corresponds to them.

This we must take into account when making the calculations, since any winning operation that closes at the next level will have a gain of 28 pips that correspond to the 30 pips of distance between the different levels minus the 2 pips of the Spread.

The positions that are being opened provide what is known as a latent loss that is calculated by adding the distance between the levels and the spread that is paid in each operation. For example, a losing operation that closed at a distance of 1 level accumulates a latent loss of 32 pips. If the distance to the entry price is two levels, the accumulated loss is 64 pips.

Main Types of Grids

The following is a list of the main types of Grids:

  • Side Grids.
  • Trend Grids.
  • Balanced Grids.
  • Multiple Grids combined.

Types Of Orders In The Forex Market – Part 1

The role of brokers (forex brokers ) is basically to act as an intermediary in the execution of orders between buyers and sellers. However it must be clear that such orders are not always executed at the same time they are entered, either for some type of problem with the broker or by decision of the operator, which is detailed below. The different types of orders that exist in the forex market are the following:

Market orders

These are the simplest orders to enter into an operation and are basically orders to buy or sell a currency in relation to its counterpart. As a rule it is bought or sold in lots of 100000 units of the base currency (it is the one to the left). The movement of each pip equals 10 units of the counterpart (the currency shown on the right). However in the case of mini accounts the proportion is maintained although the volume is reduced to one-tenth of the aforementioned. Generally speaking the orders of this type are executed at the price that appears on the screen although in special cases this can vary as we will see later.

Limit orders

As an inheritance of stock trading electronically, the Forex market introduced types of orders that allow limiting losses as well as establishing a level of profit taking such as limit orders.

So the limit orders simply seek to execute the basic principle of buying cheap to sell expensive or vice versa that takes special importance in a market that works 24 hours a day like the Forex and in which many things can happen when we least think it, and in the Which many times the price sought is reached in different hours of operation than the one that started the same, which is quite probable in medium and long term operations. Of course, a limit order for a purchase will be a sale at a higher price and for sale a purchase at a lower price.

Stop Loss Orders

These are opposed to Limit orders and seek to fulfill the philosophy of limiting losses as the same name indicates, however their execution is similar to limit orders, in this case, a stop order will be for a sale a purchase in a value Higher and equally for a purchase a sale at a lower value. Stop loss orders are vital to avoid the accumulation of large losses, especially if the mercury moves against an hour at which we are not attentive.

Trailing Stops

This is basically a dynamic combination of the two orders presented above, ie in its beginning it works as a simple Stop Loss but as the market moves in favor of the position the Stop level moves to protect The gain, that is, limits the losses and lets the profits run. It is particularly useful in a volatile market in which one moment we can be winning and the other losing. In this way we make sure we have a profit.

Because this is one of the topics that cause more concern on the subject of orders, we will see a simple example:

A GBP / USD buy order is executed at 1.6400 with a trailing Stop of 10 pips, ie the stop starts at 1.6390, if the market touches this point before reaching 1.6410 the position will close with 10 pips of loss, Now if the price reaches 1.6410 the stop will automatically move to 1.6400, meaning that now in the worst case the position will be closed without losses or gains. In case the price moves up to 1.6420 the stop will automatically move up to 1.6410 and now in the worst case will close the position with 10 pips gain and so on.

Orders If Then

As its name indicates it is a conditional order where a market entry order is placed and if and only If that order is executed, it will proceed to another order to wait to be executed. It is extremely useful for those who operate expecting ruptures of areas of congestion, resistances and supports.

OCO Orders (One Cancel the Other)

Similarly to the above, the OCO is a mixed order, but unlike this, either can be executed and if so, the other will be canceled. These commands are used to simultaneously set Limit and Stop of an already executed command.

Continue Part 2

What Are Brokerage Firms In Forex Trading?

A brokerage firm, or simply broker, is a financial institution that facilitates the purchase and sale of assets or financial instruments between a buyer and a seller. Brokerage firms serve a clientele of investors who trade in assets and instruments of various types such as stocks, currency pairs, commodities, derivatives and many others, usually through company agents or through tools such as platforms Of electronic trading, the use of which is becoming increasingly widespread among traders and investors around the world. In the case of the stock market, these firms use both trading platforms and brokers to carry out their clients’ transactions in the market.

A traditional brokerage firm that offers a complete service to its clients usually performs more functions than the simple execution of transactions with shares or other financial assets in the name of its clients. The personnel of this type of brokers are given the responsibility of investigating and analyzing the markets to provide appropriate recommendations in such a way that they can direct the actions of their clients, which in some cases may include portfolio managers and fund managers. pension. These firms also provide additional margin for certain approved clients so that they can make investments on credit, which are subject to conditions and terms agreed upon by both parties.

Online brokers (discount brokers)

A discount broker or online broker is a company that charges a relatively small commission by allowing the execution of its customers’ transactions in the market, through computerized trading systems (the electronic trading platforms that employ many brokers in the market). Rather than using the services of a human agent or broker to place the orders on the market. At present, most traditional brokerage firms also offer low-cost online trading options and compete strongly to attract customers and their money for which they are rapidly switching to this method of trading in the markets, which does not It is only less expensive but also more efficient.

Currently, most Forex brokers, for example, operate as online brokers and offer their customers the ability to trade in the Forex market from any site with an Internet connection through a trading platform. This allows these companies to offer a service with quite low costs compared to other markets. A similar trend is being seen in other markets, such as the stock market or futures market, where brokers are targeting their services on online trading platforms.

Another of the ways that some brokers use to reduce costs is through the execution of orders only a few times a day, for which they add the orders of a large number of small investors in one or more blocks of transactions that are Created at certain specific times during the day. This allows you to reduce costs in two ways:

By matching purchase and sale orders within the firm’s order book, the total amount of the asset to be traded may be reduced, which in turn reduces the fees the broker has to pay to others.

In the case of stock market brokers, for example, since investors’ money is combined prior to the purchase or sale of shares, this allows the investor to contribute relatively small amounts of money with which fractional shareholdings Can be acquired. This is not usually possible with a regular broker.

What Is The Role Of A Broker In Forex Market ?

A  broker  is an individual or company ( brokerage firm ) that arranges transactions between a buyer and a seller, and gets a commission once the transaction is executed. In other words, it is an actor who acts as an intermediary between the two parties in a buy / sell operation and charges a fee for its services as a profit.

Generally speaking, a broker is an independent agent that is used extensively in some industries. The primary responsibility of a broker is to bring together buyers and sellers so that they can trade with each other using the broker itself as an intermediary. Therefore a broker is a facilitating agent for transactions between buyers and sellers. An example could be a real estate broker who facilitates the sale of a property.

Brokers can also provide considerable market information in relation to prices, products and market conditions. Depending on the case, brokers may represent the seller (90% of the time) or the buyer (10% of the time) but not both at the same time. An example might be a stockbroker, who performs the sale or purchase of shares on behalf of his client. Today brokers play a key role in buying / selling stocks, bonds, futures, currencies and other financial services.

There are several advantages to using a broker. First, they know the market and have usually established relationships in the industry that allow them to offer market access that many investors could never have on their own. Brokers have the resources and tools to reach the largest possible base of buyers and sellers. Many brokers are related to large banks or other financial institutions, which gives them access to even more resources. Another benefit of using brokers is the cost, as they may be cheaper as in the case of the Forex, where there are companies that open accounts with a low initial capital and charge relatively low commissions compared to other financial markets.

Previously, only wealthy individuals could afford the costs of broker services to access markets. However, the Internet has made it possible for online brokers (discount brokers or discount brokers), which allow investors to operate at a lower cost, although they do not provide any kind of personalized advice (only in some cases). Thanks to these brokers, almost anyone has the possibility to operate in the markets.

Before opening an account with a broker and paying for their services, regardless of the market in which the investor is going to invest, it is important to devote the necessary time to investigate the best options of these companies or individuals, and choose that broker That presents the best conditions and is better adapted to the needs of the investor. For example, if you want to invest in the US stock market, you should choose a duly accredited and regulated broker, which complies with strict financial services regulations in that country. On the other hand, a trader interested in the Forex market should choose a broker that has a good reputation and is registered and regulated by one of the most important financial regulatory agencies in Europe or the United States for example.

Sentiment Indicator – The Best Forex Market Indicator

The world of trading is broad, long, deep, full of technical jargon, complex analysis and tools that are a challenge for the mind. The reality of this world, however, is that it is centered on the human being, which has its own set of complexities. The world of trading is made up of simple humans buying and selling in the markets, which can make them predictable in a general sense. This makes the people themselves one of the best indicators that we can use. This is clearly exemplified in the following phrase attributed to Warren Buffet:

When others are greedy, be careful, when others are careful, be greedy – Warren Buffet.

In short, in the end much of what happens in financial markets like the Forex, stock market, futures, commodities, etc., is due to what is known as market sentiment . Before explaining why this concept is so important, let us explain what it is and what it actually serves.

What is the market sentiment?

Market sentiment is the general sentiment or attitude of investors about the market climate as expressed by the direction of prices at any given time.

How functional market sentiment (Example)?

Market sentiment, as the name implies, describes the prospects of investors in a market. Market sentiment is most evident in general price trends. For example, rising prices suggest an optimistic (bullish) market sentiment , and falling prices suggest a negative (bearish) market sentiment .

Because it is important?

The nature of market psychology suggests that any given trend may be more indicative of market confidence than of fundamental gains or losses in the value of shares or other financial assets.

As a result, market prices are not necessarily indicative of the fundamental value of an action, but rather the attitude or beliefs that investors have about that action.

Although Buffet is not a trader, he is undoubtedly the best investor of our times, so his words about it should always be considered. One thing successful traders say is that having an understanding of the big picture of the market is an important key to having steady long-term gains. The elements to have this “big picture” are many, one of them being the feeling, that is the predominant voice of the people. However, sentiment can be a two-edged sword, but if one learns to read it correctly, it can be a valuable indicator in our arsenal of trading tools.

If we apply Buffet’s words in trading, we can say that if the general feeling is to pursue the market, it is best to sell. For example, just remember what happened with the technology sector in 1999 ( the bubble dot.com ). Or what happened with oil in 2008. We can also mention gold today, is it still a good asset to trade? Many successful traders operate against the prevailing sentiment, a practice that is quite common today. The reality is that everything that goes up has to go down and vice versa. What moves prices in markets in one direction or another is the common belief of investors about the value of a particular asset. It is these perceptions that create the movements in the short, medium and long term.

For example, the most common cause of low prices on the market is pessimism. The general sentiment before the market begins to move is another indicator that we must take into account. That sentiment is measured by surveys and confidence indexes of which there are many, but some are key, such as the weekly survey of the American Association of Individual Investors (AAII), which takes into account the opinion of its 150 000 members about whether the market will be bullish, bearish or neutral. Another important survey is Investors Intelligence, which subjectively measures the sentiment of about 130 investment bulletins. Every week, Market Vane surveys the top market and commodity traders.

Each of these indicators is useful by itself, but together, they form a solid indicator that every trader should observe. Never forget that the market moves because people make it move. Therefore, the best indicator is one that follows people’s perceptions and beliefs. If you think about it carefully, this is what all indicators are really trying to do.

How To Use Pivot Points In Trading?

Definitely one of the most effective market analysis tools are pivot points . Although it is not an infallible tool, techniques based on pivot points are usually quite effective since, unlike most technical analysis indicators, such as moving averages, for example, they do not go beyond the price, ie Make the movement late. In addition, these types of strategies do not require the trader to spend all day in front of a computer viewing graphs, since they offer the option of scheduling orders of entrance or exit at certain levels predetermined by the strategies.

Here are a few simple rules we can apply to trade with the Dow Jones index based on pivot points:

Open a daily chart of the instrument with an extended schedule to project the levels of the pivot points. In this graph, in addition to the pivot points we will place the intermediate points between them, and that ‘will also be considered as reference lines for the system.

If at the beginning of the session a gap is observed at the opening (a difference between the closing price of the previous session and the closing price of the current session), we enter the market by buying at the closest pivot point if the gap is a The low and if it is up we enter also selling at the closest pivot point. However, if the gap is less than 10 points we must wait until 15:45 to enter the market.

In case the price goes up (or down) a pivot that acts as resistance (support), we can enter the market by buying (selling), closing the position when the price reaches at least the intermediate point between the pivot crossed and the next. To have a safer entry, we can place a purchase order waiting for the price to go back to the pivot that was crossed.

What is recommended in this case is to use Limit Orders. For example, if there is a pivot at 11500 that is surpassed upwards and the price reaches the intermediate point, we can place a Limit Order order about 3 points above the pivot crossed, which means that an order would be placed in 11503 waiting That there is a setback that comes to order.

If the price reaches the order and it is executed, we cover the half of the position slightly below (top) of the line corresponding to the next pivot point, while the rest we let run until slightly below (above) the line That exists next. In this case, the stop loss should be placed at about 20 points from the entrance. If the operation reaches the first profit-taking objective, we place the stop loss at the entry point minus (plus) 3 points.

If the targets are not reached and the stop loss is not executed, we close the position precisely at 22:10 CET. In addition, no more positions will be opened after 21:30 CET.

If we get to do two losing trades in a row, it is best not to open more positions based on pivot points for the remainder of the session.
As you can see, the strategy is not too complicated, but careful. The important thing is to respect the rules, especially stop loss because if the market moves against us can do it with great force.