Forex Trading – An Ultimate Guide Monday October 25th, 2021 – Posted in: Forex trading, Uncategorized

Forex traders often believe that they can passively make money on the market consistently and without fail. The reality of it is that although programs such as ours are meant to relieve the trader of some burdens, learning how to efficiently and properly use our state-of-the-art software is a task within itself. Online, traders console themselves by reading articles or rumors that there is software that is a profit generator, you turn it on, leave it, and come back to 100% profit. These articles are just that, rumors. Our company has been in operation since 2002, and if there were a program that we could create which allowed the trader to kick his feet up and wait for profit, we would be the wealthiest software developers in Canada.

Trading on the Forex market has a giant learning curve, and just like in any profession, to achieve excellence, effort is needed. You can think of automatic Forex trading software as a machine that requires consistent attention and calibration, with many moving parts which need to be adjusted, experimented with, and tested in order to achieve success. Not only does trading require effort, but it also requires a commitment of time. Traders range from full-time trading to those who trade for a few hours every few days and have a full-time job. Both types of traders are not exempt from learning and cannot purchase software, leave it unattended, and expect profits. When you purchase our software, you can expect to start trading easily, have accessible resources and access to lifetime support, and know you are purchasing software that is tailor-made to your needs. What you cannot expect is a program that holds your hand and makes you profits.

If you understand that using automated trading software requires time and effort, but eases your strain while trading, and you want to continue, you will have questions.

Can I ever expect to be making stable profits on the Forex market?

This totally depends on your definition of stability. If stability to you is knowing that you will generate 40% profit every month for the next 5 years, then this is not the case. If however, you consider months with 70% profit, followed by a month of 5-10% profit, which stabilizes in the long term, then yes you can earn a stable income. When our company discusses a steady stream of 30% profits, we mean that over time, you will see a figure such as this while using our strategy. What we don’t mean, is that using our software will replace a salary-paying job, and your expectations for monthly profits will always be fulfilled. As in any other business, you can never predict the source of your profit, but in the long term, you can achieve financial freedom and success by using automated trading software.

So if the prediction of your profits is not 100% successful, can you expect large profits?

As with the discussion about stability, the question of profit is also very ambiguous. If by large profits you mean profits of 1000% a month, as many advertisements and forums promote, then no. That is totally untrue. A more achievable figure would be from 30-60% monthly profits. It is very important to note, that your starting capital will also play a part in dictating your monthly profit. As a 30-60% increase with a starting capital of $100,000 is likely not achievable, and the figure will be closer to 10-15% monthly, with 100 dollars you will be able to achieve a figure of around 80-90% profits. This makes sense, as with smaller capital, you can be more aggressive in your strategy than with a larger one. However, if you are successful and raise lots of capital, you will gain increased stability. A larger capital will lead you to work with a higher level of a broker, one that offers more order types and instruments, and this will stabilize your profit at 6% or 7% monthly. Many individuals falsely pursue goals of 1000% profits, and this is completely incorrect, and there are cases of such figures, yet in almost all cases, the broker finds a way to block these profits, by claiming that guidelines have been broken, or your account has been blocked and so on. Our company creates software for you to create profit in the long term, and achieve financial freedom, not to get rich overnight.

So if you understand the lack of stability and the realistic figures regarding profits, you need to select a broker, do brokers really have your best interest in mind?

This question does not have an ambiguous answer. It is simply no. Trusting your broker is about one of the worst things you can do while searching for success in the Forex market. Many traders believe that the broker’s recommendations and advice are something to be treasured and followed, and consider their broker a partner or even a friend. If you arent ready to switch your broker, no matter how often, you will not be able to find success in Forex trading. This seems quite harsh, but brokerages do not make profits on commission, and in fact, they have conflicting interests with the trader. Often, brokerages start off by creating profits from the commission, but many believe that this is not enough. To generate more profit, brokerages implement plugins and put the trader’s account into b-book, and stop the trader from profiting. When this symbiotic relationship turns into a parasitic one, you as a trader, need to remove yourself from this broker. Your interests should be protected, as the broker does not hesitate to protect theirs.

The broker’s advice should be avoided, but sometimes the broker doesn’t directly give you advice, or flawed strategies and recommendations come from someplace else. Trading has grown in popularity over the years, and like any other profitable venture, there are dedicated walls, forums, subreddits, blogs, columns, and any other place for users to share their thoughts on strategies and brokerages. Inexperienced traders often display their theoretical strategies on forums, and believe that their strategy is the most profitable one, or try to purposely spread misinformation, as there is no other reason for a profitable trader to flaunt their earnings online. If your strategy is profitable, chances are that you will not be telling the world about it on the internet. Brokerages also create postings on such forums in order to create clientele or give advice which results in them profiting. Of course, this does not mean that all of these forums, social media groups, and blogs are full of brokerages and traders that mean you harm, but trusting your own knowledge and following a well-structured strategy with proper guidance will be the best way to make profits, regardless of what FOREXtrader10283 says on Reddit.

Now that some misconceptions about the Forex market have been cleared up, we can move on to the process of getting started. Choosing an initial broker is a vital step in your trading journey, and the purpose of the first broker choice is not done in order to start trading at full capacity, but rather to optimize your strategy and learn about the market. Later on in this article, we will outline why, when, and how to change your broker. Your initial broker however will be similar to your latter choice in broker characteristics. You need to understand the location, regulation, platforms, reviews, and other important information anytime you choose a broker. One of the most important things is choosing a platform on which to work. FIX API for example, is a very advanced platform, and we recommend that the first platform you should trade on is the MT4 platform, which is targeted towards brokers, not traders, yet has all of the instruments you need for you to gain an understanding. This platform is simpler to use than the MT5 platform, so you should look for a broker that offers this first, however, the MT5 platform is similar and can be utilized as well.

ECN Forex Brokers

  1. GlobalPrime
  2. Saxo Bank
  3. CMC Markets
  4. Interactive Brokers
  5. TD Ameritrade FX

After choosing your broker, the selection of a strategy is equally as important. As I have mentioned before, profitable strategies are rarely disclosed on forums, message boards, blogs, or someplace else. Before you choose a strategy you need to consider whether you have an interest or want to have manual elements in your trading, or if you want a fully automated strategy. With a manual strategy, you will need to test such a strategy either on a live account, which will cause monetary loss, or a demo account, which will cause you to lose time. Testing on a demo account can take upwards of a year, while the market goes through all of its phases. An automatic strategy can be tested using historical data, however, and won’t result in 100% accuracy but will account for important factors. Historical data is often squeaky clean compared to live testing Forex data, but it will give you an idea of how the strategy works without wasting your money or time. If you found an indicator that shows points of entry or exit, you are not done, the indicator is just a small part of the strategy, it can help the trader create his strategy, but a strategy does not only contain entry points, but exit points, how stop loss is set, how to take profit is set, which money management is used, and so on. This is why testing a strategy is important and you should start with an automatic strategy. When you automate a strategy or use an automatic strategy, it should be automated for the MT5 platform, which offers better tools for testing and optimization. You will find information online that will claim that you can use MT4 to accurately test, but this is simply a made-up concept. You cannot load ticks into the MT4 platform since MetaTrader stores all pertinent information, so if you are trying to test the strategy on ticks, it is much better to use the MT5 platform. Our software developers can assist you in programming such a program,  and once you are successful on the MT5 platform, you may look into switching to a FIX API platform, which allows you to work with highly reputable brokers, and allows you to use many different types of orders which help reduce slippage. We have many articles about this platform on our blog.

Platforms for Forex Trading

  1. MetaTrader 4 (MT4)
  2. MetaTrader 5 (MT5)
  3. cTrader
  4. jForex (DukasCopy)

After you switch to a broker offering the FIX API Platform, you will need to take notes of some intricacies. Brokers who offer this platform require you to input a large deposit to trade, usually, this is over $10,000, a few brokers offer the ability to trade with a smaller deposit but this is extremely uncommon and these brokers may lack other characteristics needed to use automated trading. If you don’t have this kind of money for a deposit, utilizing the MT4 and MT5 platforms is best, this will ensure that you have many brokers available in the case that you will need to switch. If you do, however, have the ability to have a larger deposit you should purchase a strategy compatible with FIX API, and switch your original broker. This is done if the broker starts rejecting orders, or has lower liquidity than you need. This concept goes for any strategy change, with a new strategy, you should always switch your broker to one that is more beneficial for the specific strategy. After this, you optimize it on a demo account and start trading. 

The selection of a VPS is extremely important, as it is a tool you will be using always. A VPS should be chosen in the same location as your broker, if your broker is in London you should choose a VPS in the same data center, for New york choose one in New York, and so on. This is done in order to prevent time delays and slippage, and the purchase of a VPS may be expensive but will save you money by controlling slippage and random loss while trading. Your broker may offer VPS services, but you should never use your broker’s VPS as then the broker is able to access the VPS and determine the strategy that you are using.

ForexVPS Providers

  1. UltraFXVPS (locations: NY, LD)
  2. BeeksFX (Locations: NY, LD, TY)
  3. FXVM (Locations: NY, LD, TY)

Selecting the correct strategy for you can be a long and tough task. The Forex market has been home to thousands of strategies, each with a different goal and way of functioning, and in the end, this selection comes down to your particular style of trading. News-based trading is a more expensive strategy than the ones that we talk about below, as the trader needs to purchase a news feed. Companies that provide news feeds often charge a lot of money for this purchase, and the total spend on a news feed could be upwards of $3000. We offer software for news trading as well as a live feed, but this will require extra funding during the trading process. The reason why this strategy is more expensive is that just one or two order entries, can create profits for the trader, but the trader needs to have deep knowledge of the market and experience with news trading to be successful. You need to understand current trends, prices of instruments such as oil, unemployment effects, the effects of a global pandemic, and so on.  Other than news trading, scalping strategies are extremely profitable, however, those using a scalping strategy are often hindered by a large value of stop-loss, meaning that one loss will result in loss of all profits made in the past couple of completed orders. Scalping strategies are extremely dependant on the broker that you use, and although you can make this strategy highly profitable, the broker could easily interfere with your trading. In the opinion of our company, based on past experience with the selection of strategies, arbitrage strategies are the most successful in generating wealth and creating profits. Arbitrage trading involves using the fast feed to trade, and there are large variations between types of arbitrage. Hedge, Latency, Statistical, and Triangular are all forms of arbitrage strategies, which are highly profitable with a short stop loss, meaning your profits are at less risk. So you may be wondering, what is the downside of arbitrage trading?  If it is so profitable and it is tough to lose this profit, why do people use other strategies? The answer to that is that you will need to change brokers a lot more often than with other strategies, often people are afraid of the opportunity cost of time spent searching for a broker, but one profitable month of using an arbitrage strategy will ensure that the time spent looking for brokers is worth it. Our company proudly creates automated trading strategies, which includes all of the arbitrage, and scalping tools listed above, but our latest and greatest software is called DAAS – Deep Analysis Arbitrage software. This program has many built-in arbitrage strategies, and after its creation, we are certain that this is the best and most innovative program on the market, after all, it is the only one of its kind.

We have recently noticed an increase in the usage of grid strategies on the market. May firms now provide grid signals, use grinders to control accounts, and so on, and this is a big surprise to our company. These are extremely high-risk strategies, and companies such as ours do not want to get involved in such gambling. When you are using a grid and open a trade on a currency pair if the grid changes direction and goes against your order, your account will soon be nullified, you will lose everything. Especially if there is a strong trend. This is why we discourage our clients from using a grid or a Martingale strategy. There is just too much risk of loss. A grid strategy could work, but the use of a fixated grid is essential. For example, if you suffer losses twice in a row, the grid should automatically stop functioning to prevent nullification. This is often not done by those using grid strategies, and many traders lose all of their profits in this way.

Once you start using your strategy, it is important to remember the principles of money management. If you are using a small deposit, you are trying to make lots of money, and need to be more aggressive and enlarge your lots with the growth of your capital. Every profit should be used in order to make your lots larger. If you are using a large deposit, you should use a fixed lot, and avoid being aggressive with your money management principles. This way, you will be able to extract profits and won’t risk losing what you have made. If you use a less aggressive strategy with a larger capital, this will also increase your chances of being able to work with a broker for longer, as the broker will understand that you do not depend on liquidity providers. 

I would recommend buying a signal in order to mask your arbitrage or news trading strategy. Mixing news trading or arbitrage with other strategies, or using manual trading with a signal, works very well. Just buying a signal is definitely not recommended as some signals are not very high quality and you will lose money if you do not have a mix of strategies that work alongside the signal to mask your toxic feed. When you buy a signal you can use a copier to copy the signal on multiple accounts that are using arbitrage signals. When you have working signals and arbitrage trading at the same time, the arbitrage strategy will generate more profit than the signal loses, therefore creating the illusion of arbitrage masking while still making profits. The trade copier is extremely important as you can control multiple accounts at once using this tool, not only copy signals onto them. You can use some accounts to trade and copy these trades onto other accounts to increase profit.

Forex Signals service providers

  1. MQL5
  2. ZuluTrade
  3. myfxbook

We hope that you were able to learn more from this article and get a head start in understanding the steps that are needed to be taken by a trader to become successful. As always, please reach out to us with questions or comments and we will get in touch. Thank you so much and good luck!