October 27, 2013

The Reasons Behind Using An FX Converter

Using an FX Converter

This article looks at the different aspects of an FX converter and how to trade the forex market.

If you are a new trader to the forex live market, then you need to gain as much information about the market as possible.  You need to be aware of the different strategies available and the different tools one can use.  The most convenient and handy device on the forex market is that of the FX converter.  It offers quick calculations of foreign currencies which providing details on the market movements.

The foreign exchange market

The basic function of the foreign exchange market is to provide a place where traders can exchange one currency for another.  The trades involve a purchasing and selling of currency pairs, where one side of the pair is the base currency and the other a counter currency.  There are two methods whereby one can trade in this market, both are discussed below.

1. Trading through a forex broker

When you begin trading on the forex live market you will require a forex market.  However, you have the choice of trading via the broker’s trading platform or having the broker trade on your behalf.  If you choose the latter, you will have distinct restrictions on the control you have over your trading account.  You will not have the ability to amend trades as the broker will be executing trades at his discretion.  This is a time-saving method of trading, however it is not recommended due to the high risk involved.  To ensure your capital is safe, it is important to conduct background research into the chosen forex broker.

2. Trading via a trading platform

The majority of traders choose to trade via a trading platform executing trades independently.  In order to do this you will require a computer and reliable internet connection.  When choosing a trading platform you must identify what your trading goals are and what the platform features are on offer.  It is important you are comfortable with your platform as this will affect your trading.  Experienced traders will agree that one should utilise a demo account before trading live.  This will allow you to test your strategy on the platform and determine whether the two are effective.

Currency conversion with an FX converter

If you are considering using an FX converter you must identify the currencies you will be trading.  While the foreign exchange market allows for trading of all global currencies, the FX converters only have a specific amount of currencies stored in their databases.  Furthermore, the amount of currencies available for conversion depends on the sophistication of the device.

The more popular converters will present with approximately 150 currencies, but these are only the well-known few.  The majority of converters will stick to the major currencies as these are the currencies most traders utilise.  The more sophisticated FX converter will offer forex charts and graphs for the foreign exchange trader.

It is vital that you determine the data being provided by the chart.  You need to identify whether or not the information is being based on historical charts or real time rates.  If you are a forex trader, it is necessary to use a real time rates FX converter in order to trade the market effectively.



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