Forex Training

Forex Training - Technical Analysis
Technical Analysis is probably the most common and successful means of making trading decisions and analyzing forex and commodities markets.
Technical analysis is a method of forecasting price movements by looking at purely market-generated data. Price data from a particular market is most commonly the type of information analyzed by a technician, though most will also keep a close watch on volume and open interest in futures contracts. The bottom line when utilizing any type of analytical method, technical or otherwise, is to stick to the basics, which are methodologies with a proven track record over a long period.
Technical analysis differs from fundamental analysis in that technical analysis is applied only to the price action of the market, ignoring fundamental factors. As fundamental data can often provide only a long-term or "delayed" forecast of exchange rate movements, technical analysis has become the primary tool with which to successfully trade shorter-term price movements, and to set stop loss and profit targets.
Technical analysis consists primarily of a variety of technical studies, each of which can be interpreted to generate buy and sell signals or to predict market direction. Please see our Technical Studies page for a detailed description of these studies and their uses.
Forex Training - Fundamental Analysis
Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors (to name just a few elements) within a business cycle framework.
Fundamental trading strategies consist of macro, strategic assessments of where a currency should be trading based on virtually any criteria but the price action itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements.
Fundamental analysis alone can be difficult to use when dealing with currencies, commodities and other "margined" products. This is because fundamental analysis does not provide for specific entry and exit points, and therefore makes it difficult to control risk when using leverage. However, fundamental analysis can provide a guide as to likely overall direction or trends in a market. GFX provides free daily market research which can be a valuable tool in conducting fundamental analysis on the markets.
Forex Training - Forex Research
High quality Forex research can serve as a valuable technical and fundamental aid to successful currency trading. Develop a better understanding of the Forex markets and trade each day with the best information available. Click on the links below to view Forex commentary, research, and forecasts from GFX and major banks around the world.
Precious Metals Trading
GFX offers a convenient and efficient means to trade precious metals. Margin requirements are approximately 1% (100:1 leverage) and all trading is done with zero commissions.
Metals products are available for trading from the GFX GlobalTrader software, and are included in your account statements along with all currency positions. Product details are as follows:
Gold Trading hours: 24 hours a day Margin Requirement: $500 per lot Lot Size: 65,000 with a price of 650.00 Tick Value: 0.01 = $1.00 per lot Commissions: zero Spread: 75 cents (e.g., 435.25 bid / 436.00 ask) Silver Trading hours: 24 hours a day Margin Requirement: $500 per lot Lot Size: $45,000 with a price of 9.00 Tick Value: 0.01 = $50.00 per lot Commissions: zero Spread: 3 cents (e.g., 7.03 / 7.06 ask)
Platinum Trading hours: 24 hours a day Margin Requirement: $500 per lot Lot Size: $45,000 with a price of 900.00 Tick Value: 0.01 = $0.50 per lot Commissions: zero Spread: 3 dollars (e.g., 904.50 bid / 907.50 ask)
Palladium Trading hours: 24 hours a day Margin Requirement: $500 per lot Lot Size: $18,000 with a price of 180.00 Tick Value: 0.01 = $1.00 per lot Commissions: zero Spread: 3 dollars (e.g., 182.00 bid / 185.00 ask)
GFX also offers online trading in currencies, stock indices, and crude oil.
Glossary of Terms
Ask: Price at which broker/dealer is willing to sell. Same as "Offer". For example, if EUR/USD is quoted at 1.1850/1.1854, the 1.1854 is the "Ask" or "Offered" price.
Bid: Price at which broker/dealer is willing to buy. For example, if EUR/USD is quoted at 1.1850/1.1854, the 1.1850 is the "Bid" price.
Bid/Ask Spread (or "Spread"): The distance, usually in pips, between the Bid and Ask price. A tighter spread is better for the trader.
Cost of Carry (also "Interest" or "Premium"): The cost, often quoted in terms of dollars or pips per day, of holding an open position.
Currency Futures: Futures contracts traded on an exchange, most typically the Chicago Mercantile Exchange ("CME"). Always quoted in terms of the currency value with respect to the US Dollar. Parameters of the futures contract are standardized by the exchange.
Drawdown: The magnitude of a decline in account value, either in percentage or dollar terms, as measured from peak to subsequent trough. For example, if a trader's account increased in value from $10,000 to $20,000, then dropped to $15,000, then increased again to $25,000, that trader would have had a maximum drawdown of $5,000 (incurred when the account declined from $20,000 to $15,000) even though that trader's account was never in a loss position from inception.
EBS: "Electronic Brokerage System", the electronic system on which major banks trade with each other. This is considered to be the most definitive indicator of prices at which currencies are "really" trading, at least for EUR/USD and USD/JPY.
Fundamental Analysis: Macro or strategic assessments of where a currency should be trading based on any criteria but the price action itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements.
Leverage: The relationship between the notional contract value and the margin required to trade. For example, if the notional amount traded (also referred to as "lot size" or "contract value") is $100,000 dollars and the required margin is $2,000, the trader can trade with 50 times leverage ($100,000/$2,000); or "50:1" leverage. Leverage is the inverse of the percentage margin requirement.
Limit: An order to buy at a specified price when the market moves down to that price, or to sell at a specified price when the market moves up to that price.
Liquidity: A function of volume and activity in a market. It is the efficiency and cost effectiveness with which positions can be traded and orders executed. A more liquid market will provide more frequent price quotes at a smaller bid/ask spread.
Long: A market position that has been bought. It will generate profits as the market moves up and losses as the market moves down. For example, if you bought Euros, you will be "long" Euros.
Margin: The amount of funds required in a clients account in order to open a position or to maintain an open position. The percentage of the contract value required as margin is inversely related to the leverage.
Margin Call: A requirement by the broker to deposit more funds in order to maintain an open position.
Market Order: An order to buy at the current Ask price.
Offer: Price at which broker/dealer is willing to sell. Same as "Ask".
Pip: The smallest price increment in a currency. Often referred to as "ticks" in the futures markets. For example, in EURUSD, a move from .9015 to .9016 is one pip. In USDJPY, a move from 128.51 to 128.52 is one pip.
Premium (also "Interest" or "Cost of Carry" or "Roll"): The cost, often quoted in terms of dollars or pips per day, of holding an open position.
Short: A market position that has been sold. It will generate losses as the market moves up and profits as the market moves down. For example, if you sold Euros, you will be "short" Euros.
Spot Foreign Exchange: Often referred to as the "interbank" market. Refers to currencies traded between two counterparties for "spot" or current delivery rather than future delivery. Generally more liquid and widely traded than currency futures, particularly by institutions and professional money managers.
Stop: An order to buy at the market only when the market moves up to a specific price, or to sell at the market only when the market moves down to a specific price. For example, if EUR/USD is trading at around 1.1850, you could place a stop order to buy at 1.1870. This order would be filled only if the market moved up to 1.1870 or higher.
Technical Analysis: Analysis applied to the price action of the market to develop trading decisions, irrespective of fundamental factors.