“Currency values, like human skin, ultimately reflect the health or otherwise of its underlying economy”, explains economist Anthony Coombs. While it’s true that political events “can cause short term shocks, generally these have been followed by a gradual alignment”.
This is all very well for forex traders who focus on the long term, but, for short-term traders, the moodiness of the currency market poses real challenges. Rapid, extreme price movements have been known to result from unanticipated news events, catching even experienced traders off guard and leaving them exposed to big losses. Take, for example, the 11% plummet of the British pound in the immediate aftermath of the UK’s Brexit vote in 2016.
Other news items with the power to move exchange rates include central bank announcements, economic reports, and geopolitical tensions, the latter of which are not in short supply in today’s world, as you may have noticed. When one thinks about all the financial assets whose value depends on the forex market, and all the human lives whose wellbeing is tied to those assets, its inherent volatility seems alarming.
This doesn’t mean the forex market’s movements are completely random. Rather, it implies that keeping track of it is an ongoing, energy-consuming project. Your theoretical understanding of how the market works is crucial, but equally so is your knowledge of current prices and the chief factors pulling their strings at the moment. As is generally the case with specialized skills, those who’ve been doing it a long time are better at it than the novices. No matter whether you belong in the former or the latter category, you’ll need to go to reliable sources to keep you on the ball in this fast-moving market. This article introduces you to a few of the most helpful ones.
Investopedia
This address is home to a library of original articles on all things financial, and not just the obvious topics. Connections between the movements of currencies and various assets are explained in a straightforward way. Similarly, you’ll find any number of articles on punchy topics with relevance to global currencies, which is great because they can expand the horizons of your thinking and lead you onto other interesting sources, some of which are referenced at the end of the articles. Investopedia also addresses important but neglected topics like the psychological toll of forex trading and how best to deal with it.
You can delve into candlestick price charts and the unique signals they send out through chart patterns. Investopedia makes technical analysis approachable by translating it into layman’s language and offering clear, visual examples. Lessons are never left in the air but contextualized in the practicalities of real forex trading. Some articles, indeed, are geared to assist you in developing your personal trading strategy. For theoretical clarity, together with a healthy dose of practical guidance, there’s nobody to beat Investopedia.
Bloomberg
Speaking of high-quality original articles, Bloomberg definitely comes to mind. Click on “Markets” on the homepage, followed by “FX” under the “News” heading. You’ll be met by a selection of articles relating to currency pairs, starting from the most recent (a couple of hours ago, usually) and going back into the more distant past. Just by browsing through the offerings, your horizons will find themselves broadened.
For instance, learn about the effect of currency movements on precious metal prices, the impact of an upcoming election on the forex market, or a recent trend of traders going short on the pound. On all these subjects and more, you’ll get economists’ opinions on what to expect down the line for the forex pairs in question, quotes from central bank governors, and updates on the very latest news.
For the cold, hard numbers, find the “Data” section under “Markets”. Click on “Currencies” and arrive directly at the most traded pairs in the market, namely EUR/USD, USD/JPY, GBP/USD and their entourage, together with their current values and recent changes.
Yahoo!Finance
Under “Markets”, click on “Currencies” to meet up with the key pairs listed one below the other, each with a miniature price chart, current price, and 52-week range. Having all three together gives you a brief, rounded overview of each pair when comparing them, which can be helpful. Below that, you can pick up currency news and forecasts from sources like the Wall Street Journal, FXEmpire, Reuters, and Yahoo Finance UK. Check out the “Research” section, where you can access advanced charts, an economic calendar, and the currency converter.
XE
This is the Grand Central Station of forex trading. When you arrive at xe.com, try out the currency converter for EUR/USD. You’ll get a convenient list of conversions into euros for 1USD, 5USD, and up to 10,000USD. Underneath that, you’ll find a chart of the euro’s relationship with the US dollar for the past year, together with statistics like the high, low, and average prices, plus volatility for the last seven days, 30 days, and 90 days.
Below this, find the section titled “Currency Information” and click on “euro” to read up all about this interesting currency, including its history, who uses it, and the central bank that controls its monetary policy, (in this case the European Central Bank).
Open up the XE toolbox and click on “Currency Charts” to look over historical price charts for your pair in an interactive format. This will help you identify trends in price movements over longer and shorter time periods to plan your deals with precision. Also under “Tools”, you can experiment with setting rate alerts for your pair. If there’s a particular rate for your currency pair that you want to watch out for, punch it in here and wait to be alerted when prices touch that level.
XE’s exchange rate API (Application Programming Interface) grants you access to real-time rates for your pair that you can rely upon. It’s uncomplicated to use and speedy, serving up a menu of hundreds of currencies, precious metals, and even certain cryptocurrencies.
XE also keeps you up to date with forex news and offers you quality market analysis. The two locations where you can collect this are the XE blog and the XE Currency Encyclopedia. The latter puts before you a handy, alphabetized list of global currencies.
Investor.gov
This site, run by the SEC (Securities and Exchange Commission), is good for offering general guidance on trading, going through subjects like risk tolerance, trading with your goals in mind, and the various financial products available. Everything is explained clearly.
Homing in on forex trading in particular, you can read a thorough explanation for retail traders that includes market conventions and terms, the use of leverage, bid-ask spreads, and trading currencies on the OTC (over the counter) market.
This is also a good place to refresh your knowledge of the risk of fraud in the forex market. You can read about the cases where the SEC and CFTC (Commodity Futures Trading Commission) have brought charges against people for forex trading fraud. More practically, you can learn about the prevalent forms that crime takes in this market and how to protect yourself against them.
CFTC
Here’s another good address to give you pointers on how to avoid being scammed by fake forex trading sites. Speaking from experience, the CFTC talks you through a detailed list of red flags that should set off your radar when encountering a new platform. These include word choice on the site, language errors, and other telltale signs that something is fishy.
Lately, social media is the weapon of choice for fraudsters, and the CFTC can tell you what a potential scam may look like from your side, teaching you to keep your feelers out for suspicious activity. Plus, they’ll guide you on looking up domain registrations so you can confirm a website’s claims to have been around for many years, or to enjoy a sterling reputation in the industry.
Wrapping Things Up
Exploring the abovementioned sites can lay the foundation for your forex trading career, so don’t rush and make sure you get the most out of each one. Our aim has been to steer you in the direction of data and educational resources you can rely upon, and which you can constantly turn to in times of need. Indeed, there may never come a time when you can say, “I’ve studied enough”. Just as in many other fields of life, you need to keep sharpening your mind and exposing it to new ideas in order to stay on the ball in the forex market.
iFOREX is a CFD trading brokerage that really has been around for over 25 years, all the while developing and improving their platform to meet the needs of professional and beginner traders alike. When trading with iFOREX, you can choose among hundreds of tradable instruments from all industries, including shares, forex pairs, stock indices, ETFs, commodities, and cryptocurrencies. Visit the iFOREX website to find out more.
