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Forex Pending Orders in Forex: 4 Types & How They Work Forex is one of the most liquid components of the global financial markets, with traders executing approximately $2 trillion worth of trades daily. In the last couple of years, forex has turned into a popular trading avenue for newcomers, meaning that learning the basic features of FX trading, particularly when it comes to the pending order step of investing, is more important than ever before. So, what are pending orders, and how many types are there? What Are Pending Orders? In forex trading, a pending order is the trader's order to buy or sell a currency pair at a later time, when it goes above or below a certain price. For example, if you are trading the USD/CAD currency pair, and you want to exit your position at a designated price of 1.2899, you will place a sell limit instruction on your order (we will get to that in a moment). This makes the process more manageable and convenient than sitting in front of your computer and waiting for your price target. Plus, during some trading sessions, you will notice that volatility can be immense or movements can be rather tepid. It all depends on what you are trading and when you are participating in the forex market. The fast and furious ticks can be either helpful or challenging, depending on your circumstances. » Want to learn more about forex currency pairs? See our guide 4 Types of Pending Orders There are four types of pending orders when trading currency pairs. Each type of pending order will carry out a specific function and serve a different purpose, whether you are buying or selling. Pending orders may potentially make your forex trading endeavors more fruitful, especially when you are not looking to trade actively every day. Here are the four types of pending orders: 1. Buy Limit A buy limit order consists of buying an asset at or below a specified price. This feature lets traders control the price of the position they enter rather than paying a higher cost at the entry point. 2. Buy Stop A buy stop order will result in the trader purchasing a pair when it hits a pre-specified price, typically above the current market price. It might seem like a counterintuitive mechanism (why would you want to buy at a price higher than what the market is showing?), but the aim is to take advantage of an upward movement in the asset's price. In addition, buy stop orders can be utilized to shield against unlimited losses of uncovered short positions. 3. Sell Limit A sell limit order will involve traders selling your securities at a specific price or higher. This is used for investors who have a target price in mind and want to execute an order that enables the trader to take potential profits or limit losses. 4. Sell Stop A sell stop order is another type of pending order to sell at a market price. The one notable difference is that it might result in a shift to the market order, meaning there could be some slippage in the order (the difference in the expected price and the actual price you receive upon the execution of the trade). » Looking to broaden your trading knowledge? See our beginner and advanced trading courses Final Words Forex is a fast-paced trading environment, whether you are working with major currency pairs (EUR/USD or GBP/JPY) or the exotics (EUR/TRY or USD/NOK). This is why many traders opt to use pending orders, as they can serve a variety of different purposes, from buying to selling. Instead of waiting for the best prices, you can make the whole process much easier and more efficient with pending orders, as they may help you obtain your desired price targets or limit your losses. » Ready to use your trading knowledge? Learn more about opening an account with Fortrade

Cfd trading What Does Market Rollover Mean for CFD Traders?In the financial space, a rollover usually refers to the process of extending the due date of a loan or credit, leading to increased fees and costs. Of course, the usage of the term rollover isn't only limited to loans, as it could be used in contracts, fund transfers, and repayments. The term is also quite popular in the trading space, so let's go over it and see what rollovers mean for CFDs. What is CFD Rollover? Simply put, a CFD rollover is the process of extending the expiry date of a contract for difference (CFD). This means you can "roll over" your current positions to the next day and avoid having them expire. However, keep in mind that there may be extra costs associated with this process, depending on your broker. For example, imagine that you have opened a long position with your CFD broker on the Tesla stock (TSLA), predicting that the price would go up. After opening the position, the contract should, by default, expire once the business day ends and the next one begins. However, with a rollover, you can essentially bypass the rollover date (the date when the contract is set to expire) by paying a small fee, effectively extending your long position on TSLA onto the next business day. » Learn how to avoid overtrading in the CFD market Do Rollovers Impact Trader’s Equity? As rollovers are generally associated with some form of interest, the cost of rolling over a position can have an effect on your overall equity. This is especially true when you leave open positions overnight for an extended period of time, leading to you being charged a higher interest from your broker. Therefore, it is important to take this into account when trading CFDs and factor in the cost of rollovers when assessing your overall risk. Additionally, it’s important to remember that such costs can quickly add up and can reduce your potential profits in the long run if you are not cautious. Market Rollover Example In addition to the TSLA example we mentioned above, let's take a look at a more precise example to get a better understanding of how rollover works in practice. In this example, we've decided to open up a short position on the NASDAQ stock index with our CFD broker today. The contract will typically expire overnight, and you will have to close the position manually. However, if you do a rollover on the position, then your broker will automatically extend it to the rollover date (i.e. the next trading day), giving you more time to make a decision and potentially benefit from changes in the market conditions. It's worth mentioning that rollover rates are quite low (almost always below 1%), but the amount can compound over an extended period of time. » Need more help with CFD trading? See our trading courses for beginners and advanced traders How Does CFD Rollover Affect Forex Traders? For traders who are trading CFDs on forex pairs, rollovers can be beneficial in two ways: Firstly, when a position is rolled over, it might result in an increase in the trader’s equity due to the interest rate associated with their particular currency pair. Secondly, a rollover might be incredibly beneficial if you believe that you opened a good trade, but don't intend on closing it yet. Let's say you open a long position on the EUR/USD forex pair, and you have set a goal to earn 20% profit on that particular trade. So, you open it today, and before trading hours end, you notice that you're only up 7%. However, your technical analysis shows that a 20% profit is not only realistic but also quite probable, so you roll over the position to tomorrow. Of course, you'll have to pay a small fee for the rollover, but it's much better than settling with less than 50% of the potential profits. Are Rollovers a Good Thing? CFD rollovers can be an incredibly useful tool for traders, allowing them to extend the expiry date of their contracts and potentially benefit from increased profits. However, it is important to remember that there are additional costs associated with such a process and that these can quickly add up if you're not careful. Therefore, CFD traders should always consider the costs of rollovers before deciding whether or not it is the right choice. Additionally, it's always a good idea to do your research and make sure that you have a solid understanding of how rollovers are calculated and how they work before taking any trades. Doing this will reduce your chances of losing money due to a misunderstanding of the system. » Ready to start? Check out Fortrade rollover rates

Forex The Zig Zag Indicator Strategy: How to Make the Most of It in Forex Trading How do you know if an asset's upward or downward trend is reversing? The zig zag indicator may be a useful tool to answer this question. Traders will use this filter to eliminate unnecessary noise from the price charts and home in on crucial trends rather than oversold or overbought fluctuations. But what does the zig zag indicator even do? Keep reading to find out. What Is the Zig Zag Indicator? The zig zag indicator is often described as a filtering indicator. The objective behind this uniquely named method is to avoid the inconsequential price fluctuations in an investment and focus on the fundamental trend. Moreover, since it can also be utilized to spot support and resistance price levels in a market, it can help determine the start and end of a cycle. So, generally, zig zag lines will only appear on a chart when the price movement reveals a substantial swing high or swing low (usually around 5%). Because of this, traders can ignore the minuscule price adjustments of a few percentage points, making it easier to notice trends unfolding throughout a session. » Struggling with the forex basics? See the forex terms you should know before trading Trading in Forex With the Zig Zag Indicator The initial steps are simple enough: Pick your swing high (a security's price peak) or swing low (a security's low is lower than previous settlements)Figure out the percentage of price movementsLocate new highs and lowsCreate a trendline (a line over highs or lows to highlight the direction of the price) Remember, most online trading platforms or software maintain input options so that traders can insert parameters of their own zig zag decisions. Meanwhile, it is important to note that the zig zag is a lagging indicator, so it cannot function as a predictive tool on its own. In other words, you need to complement your zig zag indicator with other indicators to determine the best course of action, such as relative strength indicators (RSIs), buy and sell momentum indicators, and volume indicators. » Need more help with forex trading? See our trading courses for beginners and advanced traders Key Takeaways Indeed, the forex market can have too much noise for some investors. It can be hard to discern what is truly happening in FX when there is so much concentration on the little things, and everyone starts forgetting about the much bigger picture. Fortunately, a zig zag indicator may help ensure that your forex trading strategy will not fall prey to these incessant noises and lead to foregoing your larger picture because of something that will die down almost immediately. » Ready to start trading? Learn more about opening an account with Fortrade

Stock trading DAX 30 Index Trading Signals Explained If there is one thing we learned in the last couple of years, it is that indexes are extremely popular. An index follows the price performance of a basket of stocks that represent a specific market segment or section. The most popular ones are the S&P 500, the NASDAQ Composite Index, the Russell 2000, and DAX 40 (previously known as the DAX 30). But what exactly is the DAX 30 and how do you use it? Keep reading to find out. What Is the DAX 30 Index? The DAX 30 is a German blue-chip stock market index that tracks 40 of the largest companies listed on the Frankfurt Stock Exchange. It was created in 1988 and has skyrocketed by nearly 1,100% since its inception. Considering some of the companies listed on the DAX, it is understandable why it is perhaps one of the most successful indexes in the world. The most popular ones include: Adidas AGDeutsche BankPorsche Automobil HoldingSiemens AGVolkswagen AG How to Use DAX 30 Trading Signals Investors are always on the prowl for trading signals. These are, essentially, alerts to potential trading opportunities in the market you are participating in, whether indexes or commodities. They are analytical tools for entering or exiting positions and taking profits or limiting losses. So, for example, a common trade signal is if there is a sharp selloff in the financial markets because of geopolitical tensions in the Middle East, but the fundamentals still indicate that the market is in good shape. As a result, investors may choose to purchase the discounts or buy the dip if there is a good deal available in the stock market. » Want to increase your trading knowledge? Take a look at our trading courses for beginners and advanced traders Can You Create Your Own Trade Signal? You may be wondering—is it possible to create your own trading signal for the DAX 30? This is a common question that investors have when they start analyzing financial markets, and the answer is yes. The first step is to establish a blueprint with these steps: Think about the type of indicatorDetermine what features will be added to your indicatorCome up with rules to figure out where and when price movements should happenExperiment with your indicator in the real market with your money or a free demo account The thing you need to consider is which inputs you should utilize for your trading signal. Some of the more common ones are: Volatility levelsMarket volumesMoving averagesMonetary policyTechnical patterns So, for example, let's say that Deutsche Bank has been slapped with another billion-dollar fine and could be under investigation by regulatory bodies. This would immensely impact the DAX 30 since there may be spillover effects. Your trading signal would respond based on volatility and market volumes, as well as moving averages and deeper insight into technical averages. Key Takeaway Trading signals are critical for anyone who is involved in the investment community since they can help you live and work comfortably. It is extremely beneficial to incorporate them into your daily arsenal, as the feature can help you spot opportunities, notice trends, and enter or exit a position at a good price. » Learn more about DAX 30 index with Fortrade

Forex Close Positions in Trading: Everything You Need to Know Understanding trading as a beginner requires learning the basics first, and there's no better way to start than with opening and closing positions. Namely, all assets in the market move in price, and the asset's price is represented on a chart. This asset can grow in price, leading to the chart going up, or it can fall, leading to the chart going down. Of course, traders can get potential profit from the market regardless of the chart's direction. Namely, a trader can open a long position, where you buy low and sell high, or a short position, where you reverse the order—selling shares to get potential profit from the price going down. However, to profit from a trade, you must understand how you can properly close a position. So, let's see what closing a position means in more detail. What Is a Close Position in Trading? Simply put, closing a position in trading means exiting an open trade and taking profits or losses accordingly. This can be done either manually if the trader is tracking their trades closely, or automatically with the help of stop-loss orders that guarantee the trader doesn't take too much risk. It's worth mentioning that there are many reasons why a trader would close a position. These include: Taking profits from an open long or short position. Mitigating a potential loss, anticipating that the market is headed in the opposite direction. Preventing forced liquidation by the market or your broker. Adding liquidity to your account for a bigger position. Short Selling Short selling involves opening a position in an asset with the expectation that it will fall in price, and closing it to take potential profits. To short sell, you first artificially "borrow" shares from your broker to open the position. When the time comes to close this position, you "return" these borrowed shares back to the broker, and any profits or losses are calculated accordingly. Exiting a Long Position The most common type of position is a long position, where you buy an asset at a lower price end and then sell it higher to earn a potential profit in the price difference. To close such a position, the trader "exits" the market by reversing their trade, effectively selling the asset back to the broker at the current market price and earning the potential profits. Exemptions In some cases, traders are not required to close their position. This can happen if the instrument they used is subject to an expiration date, as with derivatives such as futures or options contracts. In these cases, the position is automatically closed when it reaches its predetermined expiration date, regardless of whether or not the trader would like to close it. It's also worth mentioning that, in some cases, positions aren't closed voluntarily but forcefully by the broker or the market. This can happen due to improper risk management or extremely volatile market conditions. The most common type of a force-close position is with a margin call, which is a demand by the broker to invest more cash or close the position. Failing to deposit more cash in your account when margin-called might cause a forced liquidation to happen in your account, making you close your positions with a loss. » Read more about the differences between CFD and futures trading Closed Position Example Let's say a trader opens a long position on Microsoft stock (MSFT), which is currently trading at $250 per share. After two days, the price of the stock rises to $255, and the trader decides that it's time to take potential profits, so they close their position. This action will result in the trader making a profit of $5 per share invested. Let's explain this example in a step-by-step fashion: The trader sees an opportunity to profit from the MSFT stock, anticipating that the share price will go up after a certain event (like Microsoft releasing a new product). Then, the trader opens a long position with their broker (where you buy low and sell high) and waits for an increase in price. Once the share price reaches the trader's expectations (for example, $255), the trader closes the position and takes the profits. Final Words To summarize, closing positions refers to exiting an open trade and taking profits or losses accordingly. As you can see, positions can be closed either voluntarily or forcefully by the broker/market. This decision is based on multiple factors, like the trader's risk tolerance, current market conditions, as well as potential earning opportunities. Whether you're in a long or a short position, learning how to close positions properly is essential. » Want to learn more? Check out our free beginner's trading courses

Forex Understanding XAU/USD in Forex (+ 5 Tips on How to Trade It)In forex markets, gold is a form of currency, meaning that investors can trade the precious metal against currencies, with XAU/USD being the most common pair. The XAU/USD pair is mainly used as a safe-haven trade, making it an essential part of diversifying your forex trading portfolio during periods of market volatility, geopolitical tensions, and economic and political uncertainty. What Is XAU/USD? The XAU/USD pair informs traders how many U.S. dollars (the base currency) are needed to acquire one ounce of gold (the quote currency). In other words, XAU/USD trading works like any other currency trading: you purchase gold in XAU and sell it in USD. Since gold is a global asset, investors can trade the precious metal with other pairs, be it XAU/CAD or XAU/EUR. That said, XAU/USD is the second most liquid asset in the international forex market today. Forex trading can be a volatile experience, so traders will usually include XAU/USD in their portfolios to offset any substantial losses. » Confused about gold? Read our breakdown of gold CFD trading in 2023 5 Tips on Trading XAU/USD 1. Pay Attention to World Events Geopolitical events can play a critical role in gold, currencies, and other facets of the international financial markets. Therefore, it is crucial for XAU/USD traders to keep an eye out for situations that can result in enormous losses (or gains), such as the war in Eastern Europe, the Zero-COVID policy lockdowns in China, or financial crises in the European Union. 2. Look Up Real Interest Rates Many people talk about central banks, from the Federal Reserve to the European Central Bank (ECB), raising interest rates. But what is typically lost in the conversation are real interest rates, which are adjusted for inflation that can accurately reflect the actual cost of borrowing and lending. As we have seen this year, interest rates can play a massive role in the price of gold and other securities since a rising-rate environment results in two things—it lifts the opportunity cost of holding non-yielding bullion, and it increases the value of the greenback, which makes dollar-denominated commodities more expensive for foreign investors to purchase. » Struggling with the forex basics? See our list of the basic forex terms you should know 3. Analyze Highs & Lows Once you become accustomed to trading, be it XAU/USD or stocks, you will begin noticing patterns, particularly if something is overbought or oversold. The same applies to assets like gold. Because of these types of trends, it is vital to assess past highs and lows, which is a strategy known as technical analysis. You can also comb through other forms of analysis, like monitoring ratios (gold to silver or gold to crude oil), fundamental analysis (studying economic and financial factors), and watching technical indicators (relative strength index, moving averages, and moving average convergence/divergence). 4. Check What Popular ETFs Are Doing Exchange-traded funds (ETFs) have exploded in popularity over the last couple of years, surpassing that of mutual funds. Market experts now think that learning about the inflows and outflows of ETFs can help determine the best course of action, mainly because they can be immense. The best way to keep track of ETFs is to pick the instruments with the greatest volumes and assets and add them to your watchlist to figure out how they are trending. These are currently the most popular gold ETFs: SPDR Gold Shares (GLD)iShares Gold Trust (IAU)VanEck Vectors Gold Miners ETF (GDX)SPDR Gold MiniShares Trust (GLDM)Physical Gold Shares ETF (PHYS) 5. Pick the Right Broker Lastly, and this cannot be emphasized enough, it is imperative to select the right broker for your trading needs. While the list of online brokerage firms has increased in recent years, you need to do your due diligence to ensure successful trading. You should choose a platform that can support traders of all skill sets—novice and veteran—in all different categories, from forex to CFDs, while offering a wide range of tools and features. » Interested in opening an account? Learn more about opening an account with Fortrade Final Words XAU/USD is one of the most widely traded pairs in forex today. Gold has long functioned as a safe-haven asset to shield investors from market volatility, inflation, geopolitical chaos, economic uncertainty, and a broad array of other developments that can decimate portfolios.

Cfd trading How to Trade Crude Oil CFDs in a Volatile Market As an asset, crude oil has been one of the most important energy sources in the world for almost a century. In addition to powering vehicles, oil products are also used to heat buildings, produce electricity, and even as a material in creating certain products. Because of this, oil has consistently held a relatively solid price over the last 50 years. However, since it's both sought-after and rare to find, oil is susceptible to price fluctuations, particularly after major macroeconomic events. So, how can you profit from the price volatility of crude oil? Read to find out. What Is Crude Oil CFD Trading? To get potential profit from the price change of oil, you'd have to buy it when it hits a low price and sell it later for a profit. However, unless you have the logistics to manage this (including storage and resources), buying and selling physical oil is a difficult feat. This is where crude oil CFDs come in. Namely, a CFD, also known as a contract for difference, is a derivative financial product that allows you to profit from the price difference of an asset without having to physically own it. CFDs give you great exposure to the market as they can be used to trade a wide variety of assets, including crude oil. Moreover, traders can use leverage to magnify their profits even if their starting balance is low. Of course, CFD trading is not risk-free, as you'd have to risk at least some of your capital to profit from it—and this is magnified in the case of a volatile asset like oil. Still, those who know how to trade CFDs can get potential profit from these price fluctuations. » Become a more experienced trader: Trading courses for beginners and advanced trading courses Important Pre-trading Considerations Now that we've established why trading crude oil CFDs can be profitable, it's important to take some aspects into consideration before you start trading. Namely, performing detailed research, due diligence, and having a specific plan go a long way when planning to trade crude oil CFDs. With the right considerations, you may get some potential profit and minimize your risk exposure to the market. Commodity Choice When it comes to oil, there are two main types: Brent Crude Oil and WTI Oil. Brent Crude is extracted from the North Sea and used as a benchmark to price two-thirds of the world's internationally traded crude oil supply. The volatility of crude oil is primarily based on geopolitical events happening in Europe, Asia, and Africa, which is where this type of oil is primarily used. For example, after the start of the war in Ukraine, Brent Oil went up 23%. On the other hand, WTI or West Texas Intermediate is a type of crude oil that's extracted from Texas and used as a benchmark for pricing in the US. The price of WTI is primarily based on US domestic events such as the opening of the Keystone XL oil pipeline. After the war in Ukraine, WTI went up 19%, which shows that there's a correlation in the price between the two commodities, but also that they're never trading at the same price. This price difference is known as the Brent/WTI spread. Trading Strategy When you're planning to trade oil CFDs, it's important that you have a clear strategy in place. This includes setting entry and exit points as well as stop-loss and take-profit orders. Your trading strategy should also consider the time frame you plan on holding your position as well as the amount of capital you're willing to risk. Most experts would recommend setting your profit goals on the lower end if you're a novice trader. Risk Management Strategy As with any type of trading, oil CFD trading comes with its own risks that need to be managed. This includes the risk of losses as well as the price fluctuations of the commodity. To mitigate these risks, it's important to have a proper risk management strategy in place. This includes setting stop-loss orders at key levels or possibly including a hedging strategy. CFD Broker Last but not least, in order to trade oil CFDs, you'll need to find a reputable CFD broker. This is a platform that will allow you to trade a variety of assets without having to own them, including commodities like crude oil. When looking for a broker, it's important to consider the fees associated with trading as well as the features and tools that are available. If you're a beginner, we highly recommend, that you open an account with a reliable broker and trade with a user-friendly platform, like Fortrade. » Struggling to understand complex trading terms? Take a look at our glossary of terms. How to Start Trading Crude Oil CFDs Now that we've gone over the important considerations to take into account before trading oil CFDs, let's go over the steps on how to start trading. Open an account at a reputable CFD brokerDownload and install the broker's trading platformDeposit the funds you're willing to trade into your accountStart opening and closing trades via the platform » Ready to get started? Learn more about opening an account with Fortrade. Conclusion Even though crude oil has been a historically volatile commodity, CFD trading may become a potentially profitable endeavor if you take the necessary precautions. This includes performing detailed research, diversifying, and always being up-to-date with geopolitical events. With the right considerations in place, you can trade crude oil CFDs successfully and get potential profit even in the most volatile market conditions.