The Most Tradable Currencies

Let's take a look at eight currencies every trader or investor should know, along with the central banks of their respective nations.


U.S. Dollar (USD)

Central Bank: Federal Reserve (Fed)

Sometimes referred to as the greenback, the U.S. dollar (USD) is the home denomination of the world's largest economy, the United States. As with any currency, the dollar is supported by economic fundamentals, including gross domestic product, and manufacturing and employment reports. However, the U.S. dollar is also widely influenced by the central bank and any announcements about interest rate policy. The U.S. dollar is a benchmark that trades against other major currencies, especially the euro, Japanese yen and British pound.

European Euro (EUR)

Central Bank: European Central Bank (ECB). Although the monetary body is somewhat complex, the currency is not. Against the U.S. dollar, the euro (EUR) tends to be a slower currency compared to its colleagues (i.e., the British pound or Australian dollar). On an average day, the base currency can trade between 30-40 pips, with more volatile swings averaging slightly more, at 60 pips wide per day. Another trading consideration is time. Trading in the euro-based pairs can be seen during the London and U.S. sessions (which occur from 2am through 11am EST).

Japanese Yen (JPY)

Central Bank: Bank of Japan (BoJ) The Japanese yen (JPY) tends to trade under the identity of a carry trade component. Offering a low interest rate, the currency is pitted against higher-yielding currencies, especially the New Zealand and Australian dollars and the British pound. As a result, the underlying tends to be very erratic, pushing traders to take technical perspectives on a longer-term basis. Average daily ranges are in the region of 30-40 pips, with extremes as high as 150 pips. To trade this currency with a little bit of a bite, focus on the crossover of London and U.S. hours (6am - 11am EST).

British Pound (GBP)

Central Bank: Bank of England (BoE) A little bit more volatile than the euro, the British pound (GBP, also sometimes referred to as "pound sterling" or "cable") tends to trade a wider range through the day. With swings that can encompass 100-150 pips, it isn't unusual to see the pound trade as narrowly as 20 pips. Swings in notable cross currencies tend to give this major a volatile nature, with traders focusing on pairs like the British pound/Japanese yen and the British pound/Swiss franc. As a result, the currency can be seen as most volatile through both London and U.S. sessions, with minimal movements during Asian hours (5pm - 1am EST).

Swiss Franc (CHF)

Central Bank: Swiss National Bank (SNB) Similar to the euro, the Swiss franc (CHF) hardly makes significant moves in the any of the individual sessions. As a result, look for this particular currency to trade in the average daily range of 35 pips per day. High-frequency volume for this currency is usually pitted for the London session (2am - 8am EST).

Canadian Dollar (CAD)

Central Bank: Bank of Canada (BoC) Keeping in touch with major currencies, the Canadian dollar (CAD) tends to trade in similar daily ranges of 30-40 pips. However, one unique aspect about the currency is its relationship with crude oil, as the country remains a major exporter of the commodity. As a result, plenty of traders and investors use this currency as either a hedge against current commodity positions or pure speculation, tracing signals from the oil market.

Australian/New Zealand Dollar (AUD/NZD)

Central Bank: Reserve Bank of Australia / Reserve Bank of New Zealand (RBA/RBNZ) Both currencies have been the focus of carry traders, as the Australian and New Zealand dollars (AUD and NZD) offer the highest yields of the seven major currencies available on most platforms. As a result, volatility can be experienced in these pairs if a deleveraging effect takes place. Otherwise, the currencies tend to trade in similar averages of 30-40 pips, like other majors. Both currencies also maintain relationships with commodities, most notably silver and gold.

South African Rand (ZAR)

Central Bank: South African Reserve Bank (SARB) Seen as relatively volatile, the average daily range of the South African rand (ZAR) can be as high as 1,000 pips. But don't let the wide daily range fool you. When translated into dollar pips, the movements are equivalent to an average day in the British pound, making the currency a great pair to trade against the U.S. dollar (especially when taking into consideration the carry potential). Traders also consider the currency's relationship to gold and platinum. With the economy being a world leader when it comes to exports of both metals, it is only natural to see a correlation similar to that between the CAD and crude oil. As a result, consider the commodities markets in creating opportunities when economic data is scant.

Now you know which pairs are the most tradable currencies. Remember to be a successful trader you need to take in consideration everything you know about the country, the pair and the economic news.


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10 Forex Trading Rules

Hi when you trade in Forex you need to keep in mind the next rules so your trading will be much easier. Remember no rule is ever absolute, except the one about always using a stop. These rules work well across a variety market conditions, and will keep you safe.

1. Never Let a Winner Turn into a Loser: The FX markets can move fast, with gains turning into losses in a matter of minutes, making it critical to properly manage your capital. You can protect your profits by using trailing stops and trading more than one lot.
2. Logic Wins; Impulse Kills: Reason always trumps impulse because logically focused traders will know how to limit their losses, while impulsive traders are never more than one trade away from total bankruptcy.
3. Never Risk More Than 2% Per Trade: This is the most common and most violated rule in trading. By setting a 2% stop-loss for each trade, you would have to sustain 10 consecutive losing trades in a row to lose 20% of your account.
4. Use Both Technical And Fundamental Analysis: Both methods are important and have a hand in impacting price action. Fundamentals are good at dictating the broad themes in the market that can last for weeks months or even years. Technicals can change quickly and are useful for identifying specific entry and exit levels.
5. Always Pair Strong With Weak: Because strength and weakness can last for some time as economic trends evolve, pairing the strong with the weak currency is one of the best ways for traders to gain an edge in the currency market.
6. Being Right And Early Means You Are Wrong: If the price action moves against you, even if the reasons for your trade remain valid, trust your eyes, respect the market and take a modest stop. In the currency market, being right and being early is the same as being wrong.
7. Differentiate Between Scaling In And Adding To A Loser: The difference between adding to a loser and scaling in is your initial intent before you place the trade. Adding to a losing position that has gone beyond the point of your original risk is the wrong way to trade. There are, however, times when adding to a losing position is the right way to trade.
8. What Is Mathematically Optimal Is Psychologically Impossible: Why? Because trading is not logical but psychological in nature, and emotion will always overwhelm the intellect in the end. Conventional wisdom in the markets is that traders should always trade with a 2:1 reward-to-risk ratio, the trader can be wrong 6.5 times out of 10 and still make money.
9. Risk Can Be Predetermined; Reward Is Unpredictable: Before entering every trade, you must know your pain threshold. You need to figure out what the worst-case scenario is and place your stop based on a monetary or technical level. Every trade, no matter how certain you are of its outcome, is an educated guess. Nothing is certain in trading.
10. No Excuses, Ever: The "no excuses" rule is applicable to those times when the trader does not understand the price action of the markets. It's acceptable to sustain a drawdown of 10% if it was the result of five consecutive losing trades that were stopped out at a 2% loss each. However, it is inexcusable to lose 10% on one trade because the trader refused to cut his losses.
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Practice Account

The best way to start in Forex is to get a practice account. Almost every broker offers a free practice account; all you need to do is sign up for one on the broker´s site. Practice accounts are made with virtual money so you are able to make trades without using real money.

Practice account give you a great chance to experience the forex market. You can see how prices changes at different time of the day. You also can start trading in the real market without the fear of loosing money, you can experiment with different strategies to see which one is the right for you, and start analyzing charts and following technical indicators.

You make trades in the Forex markets one of two ways: You can trade at the market, or the current price, using the click and deal feature of your broker´s platform; or you can employ orders and one cancels the other orders.

May people don´t like the idea of placing and order that may be or not executed, they like to buy and sell to be actively involve in the dealing. But if you trade like that you need to be watching carefully the charts so you don´t miss any opportunity.

That´s why I think is better to do both so you can see for yourself which one is better, also depends in how much time do you have to trade and how much do you know of technical analyzes, etc. But remember if you want to receive free forex signals go to Fx-megaforex.

Opening a Forex Trading Account

Opening a forex trading account can be made in 3 easy steps:

1. Selecting an account type.


2. Registration.


3. Activating your account.

Before you open a real account you may start using a demo account. This will give you the feel of it, before you invest any money. Open 2 or 3 demo accounts so yo may try different brokers, and see for yourself which one is good for you.

Account Types

You have the option to open an account for yourself or for a company. Also, yo have the choice to open an standard account or a mini or micro account. If you have no experience you should open a mini account. Only people with lots of experience should open an standard account.

Always read the fine print

Some brokers have a “managed account” option in their applications. If you want the broker to trade your account for you, pick this, but obviously you’re here to learn how to trade the Forex for yourself. Besides, opening a managed account typically requires a pretty big minimum deposit - $25,000 or higher - and the broker also takes a portion of the profits.
Also, make sure you open a Forex spot account and not a “forwards” or “futures” account.

Registration

You will have to submit paper work to registrate an account, this vary from broker to broker. They are usually in PDF formats and you can print, sign and return.

Account Activation

Once you had send all the paperwork the broker will send you an email with the instructions on how to start operating your account. But stop before you start risking real money, I reccomend you to do your work and know what you are doing, so you will not freak out if you loose any money. Remember that you need always a helping hand when operating a Forex account, you may use Forex signals or a Robot trading system.

Take your time, study and start making money online.