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We created this guide to outline the best Forex signals and trading indicators available on our platform at CAPEX. Whether you’re new to Forex trading or have some experience, this guide is right for you.
Our online platform and our mobile trading apps use the industry favourite MetaTrader 5 (MT5) and our more advanced option, WebTrader. Our users can benefit from the range of built-in key performance indicators and easy to use control panels. We take pride in our easily accessible user interface for traders at different skill levels.
Compared to other brokers, our spreads are relatively low on leading currency pairs which makes them quite popular for our customers. We have a handful of fixed spreads, but the majority are floating. We also don’t charge commission fees for each trade, so we make our money through the spreads.
Before you start to trade Forex, we at CAPEX wanted to help build your Forex and Forex market understanding, so it’s important to start answering the question “what is Forex trading?”. The Forex market (or foreign exchange FX market) is the largest market in the world in terms of its trading volume. It is a globally decentralised market for trading currencies, which includes buying, selling and exchanging these currencies at a determined or current price point.
The Forex market sets the exchange rates for each currency which constantly changes over time. The exchange rates allow traders like companies or banks to convert one currency into another.
The main participants of the Forex market are large international banks spread over the four major centres worldwide. These are located in London, Sydney, Tokyo and New York. Because there is no central location, individuals can trade 24 hours of the day, excluding weekends.
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The currencies are always traded in pairs like USD/GBP or EUR/GBP. In addition, the market doesn’t set the exact value of the currency but instead determines a relative value. It’s done by setting the market price for one currency like it was paid with its pair.
For example, if 1 USD is worth 0.72 GBP in a USD/GBP pair, individuals who trade will have to monitor and speculate the direction the currencies will go in the future with the help of Forex trading indicators. They will determine whether or not to buy or sell the currency pairs depending on the trend the currency price will follow. Please refer to our guide on how to trade Forex to learn more.
A Forex signal suggests a trader enters a trade on a currency pair at a specific price and time. The signal is generated by a human analyst or an automated analyst. The Forex signals are usually sent to an individual via text, tweet, through a website or email. The aim is to communicate that signal almost immediately so it can be acted on.
There are several types of services that provide you with Forex signals. These include different categories such as free signals, paid signals from one provider through personal or algorithm-based analysis, and finally, paid signals from multiple signal sources or signals supplied by online trading software.
We at CAPEX have the leading technical analysis provider, Trading Central, on our platform to offer all our customers. It gives you free daily alerts on the messaging app Telegram and high-speed trading signals on the go. Trading Central is an automated investment analyst tool that can help investors and traders by monitoring and speculating the market to do so.
Indicators are important in Forex trading because they help recognise familiar patterns that take place in the market. Using graphs and charts, individuals can notice where the market repeats itself and capitalise on choosing the correct entry and exit points to trade-in.
We researched several popular technical indicators that our customers use here at CAPEX. Some of these Forex trading indicators include:
Momentum indicators or oscillators help you locate overbought and oversold conditions as they show the magnitude and velocity of a price movement. They help traders identify the beginning and end of a trend with the help of other trend indicators.
The RSI is a type of oscillator momentum indicator. It is used in technical analysis to measure how strong or weak a currency pair is by comparing its upward movements to its downward over time. It keeps track of any recent price gains and losses and compares them to the current price.
The MACD technical indicator is also an oscillator used to trade trends. It measures the characteristics of a trend such as its direction, rate of change and magnitude. The MACD indicator is shown on a Forex chart as two lines, the MACD and the signal line, and a histogram or bars. It will fluctuate above and below the centreline or zero line as the moving averages show a convergence. It is when the distance between the EMAs gets closer, and the bar becomes smaller. Or the opposite occurs, which is known as divergence.
SMAs record the average closing prices over a specific time. A chart is used to plot these averages as lines to determine a trend. To calculate the averages, you would take a certain number of closing prices, add them together, and divide them by the total number of closing prices used. If you were looking at a seven day period, you would use all the closing prices within the seven days then divide that number by seven.
Important political developments
Consumer & producer preferences – CPI or PPI reports
Interest Rate Decisions - Bank of England MPC Announcements, Fed Interest rate Decisions, etc.
Other market-related FX news
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Here at CAPEX, we offer several types of instruments to trade with, including Forex. So, we wanted to include the most popular Forex trading strategies that we find our customers use on our platform to trade with that are proven effective.
Position trading is a long-term Forex and stock trading strategy that focuses on the fundamental factors and includes some technical methods. Because it is long-term, meaning it could range anywhere from weeks to months or even years, smaller fluctuations in the market that are pretty minor are not affected on the broader picture. You may prefer to use this strategy with us if you are a trader who is happy to persevere with the time frame. Position trading looks at how economic factors affect the chosen market and then enables the individual to forecast trade ideas.
The long-term time frame is helpful to allow traders to get a more comprehensive view of the market and gain valuable information like knowing what Forex trading signals to look out for. The strategy requires a strong understanding of both fundamental and technical analysis and patience. But if that sounds like a positive, then at CAPEX, we can accommodate that for you.
The day trading strategy is a short-term strategy as the aim is to complete your trades within the same trading day. It can be a single trade or multiple during the day, as long as all your open positions are closed before the market closes. Some trade times can be short, ranging from minutes to hours. With the advantage of powerful computers, high-frequency trading allows companies to run multiple trades at once, scanning the market and executing trades per second and millisecond.
We are delighted to offer several technical indicators for day trading on our platform for individuals who choose to use this strategy. As this is a short-term option, it is quite time-consuming because you have to be checking your account actively. It is best suited to highly educated individuals in technical analysis and have a good amount of funds to support themselves, even if they are still learning and practising. Once this strategy is mastered, it can have a high success rate and profit rewards.
The scalping strategy is similar to day trading because it is the process of making small profits on a regular and frequent basis throughout the day. It is generally short-term because of the nature of the strategy. The individual would look for the most liquid Forex pairs as the preferred assets to trade because the spreads are tighter and in line with it being short-term. This method can be either manually or automated using an algorithm that uses a guideline to determine when and where to enter and exit their positions.
Forex scalping is a technical strategy that focuses on identifying the trend and looking at indicators like the moving average to verify this. These levels can then be used to create support and resistance bands used to determine when is the best time to buy or sell that asset. Scalping is another popular Forex strategy choice on our platform that again does require a good understanding of technical analysis, but the outcome will provide rewarding results.
This strategy is entirely speculative because the trader is looking to take advantage of the trending markets. Swing trades are usually medium-term as they are held between a few hours to a few days. It can also be used as a long-term method because trends can be monitored over a more extended time, and traders can capitalise on the trend to see the best entry and exit points to buy and sell.
There is a high number of trading opportunities if you choose to use this method on our platform. It can be applied to both trending markets and range-bound markets which are a price that is constrained to upper and lower limits. Like most Forex strategies, it requires a lot of time to invest and understand fully, including the technical analysis and Forex indicators.
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With any trade or investment, you will come across risks, and Forex is no different. We have outlined a few of the significant risks below.
Although a highly volatile market can have its advantages, it can also increase the risk of losing money. The constant changes and announcements in the economy can make it difficult for traders to judge the market. In addition, certain assets could become increasingly unstable and cause the market to drop and cause more losses suddenly.
It is one of the most significant disadvantages the Forex market faces. Because it is decentralised, it is predominantly taken over by brokers. The trader may not have any control over how their trade orders are fulfilled. It is a good idea to use a regulated platform like ourselves that follows the guidelines of our regulators. So you can trust to get the best price on the market for your trades with us.
Another major risk is scammers. As mentioned, it is essential to choose a reliable and regulated broker so that incidents are less likely to occur. Before choosing a broker, verify that it’s licensed by the appropriate regulators, such as the Cyprus Securities and Exchange Commission (CySEC) for Europe.
At CAPEX, we are known to strictly follow international regulations and remain transparent in our fees, commissions and trading conditions. Client funds are always stored in segregated accounts, and users get negative balance protection. Also, we are regulated by CySEC, the Seychelles Financial Services Authority (FSA), the Financial Sector Conduct Authority (FSCA), and the ADGM Financial Services Regulatory Authority (FSRA).
Interest rates vary from country to country and have a direct impact on the current exchange rates. So if a country’s interest rates rise, the currency will strengthen because there is an increase in the number of investments the country’s assets are taking in. On the other hand, if interest rates fall, the currency will weaken as investors and traders start to take back their investments. This correlation between interest rates and exchange rates can potentially cause the prices in the Forex market to change drastically as a result.
We believe that having a good core understanding of the Forex market can lower the risks of trading. With the help of Forex signals from our automated analyst Trading Central and the use of Forex indicators MT5 (MetaTrader 5) and in our WebTrader, you should develop your Forex trading skills. At CAPEX, we know that trading does come with its risk, but the more you practice, the more you will understand the trends in the market and know when to buy or sell your currency pairs. It is always good to start with a small investment when trading with us and then work your way up as your understanding and profit grow.