Well the first thing you have to do, obviously, is open a forex currency trading account. This is trickier than it sounds, first and most importantly you must gather information regarding the various companies providing such a forex currency trading service. Make sure you read customer reviews and check to see their foreign currency spreads.

This is essentially how forex brokers make money, the difference between the bid and ask price for any currency is called the spread and is essentially pocketed by the forex brokers. Different forex brokers have different spreads resulting from different bid and ask prices, the difference of a few pips between different companies may seem deceptively small but in the long run this very difference may be measured in thousands of dollars.

Thus it is your job to ensure that you find a forex broker (whether the online kind or the regular kind) that is competent and trustworthy and that has the right spread.

If you are planning on trading foreign currencies online, one of the factors that should affect which forex broker you go with is which forex trading platform they use. Currently, the forex trading platform that is most common and supports the largest number of third-party applications and software is Meta Trader. Payment and withdrawal options offered are of course another thing to look at.

The next key factor to look at when opening a forex currency trading account is leverage. Leverage is usually in a factor or percentage, if for example a firm offers a 100:1 leverage factor that means if you deposit $1 in your account then you will be able to trade currencies for up to $100 (the firm provides the other $99 that you trade).

The leverage also determines the margin (this is the amount that you have to have in your account) and which is very low as compared to equities. For example, based on the above example, the margin for a 100:1 leverage factor would be 1%.

Leverage is one of the advantages of trading foreign currency, as even with very small investments you can potentially make large gains. The other great thing about forex currency trading is of course the fact that there are usually no commissions or fees for operating your account, instead as we mentioned earlier, the forex currency trading broker makes money through the foreign currency spreads.

For the most part, automated forex trading systems involve little other than EAs (Expert Advisors) also known as Forex Robots. Forex robots or expert advisors are mostly monitoring tools that pick out likely investments by going through various news or data. These when used in conjunction with say MetaTrader (4 or 5) or similar online forex trading platforms allow you to find likely profitable investments without having to look through large amounts of information yourself. It is however important to remember that no form of automated system is foolproof and over-reliance on any automated forex trading system will undoubtedly result in losses for you.

There are also some hands-free automated forex trading software that actually do let you leave them running and come back a week later to find that you’ve made profits. While we do not discount their ability to do just that as impossible, we do firmly believe that automated forex trading programs or websites of this type are far from infallible.

Of course they do have the advantage of being emotionless (one of the major psychological weaknesses of forex traders in general) and also a logical approach to online forex trading. Furthermore, you can adjust settings so that the program may choose to be highly risk averse and settle for quickly trading in scraping a few pips or points per trade or you can set it to be more adventurous and attempt to make larger gains.

Most important however is that you keep in mind that a large number of scams are being run which promise huge profits by using forex currency trading software that are guaranteed to produce results. Some easy ways to ensure that the product is what it is claimed to be is to check customer reviews. Try to avoid reviews on the software publishers site as these are likely to be favorable ones only.

Instead try to look for a third party site that allows users to discuss the software and try to gain an idea of the software’s benefits and problems through user reviews. Another method would be to check with the CFTC (Commodity Futures Trading Commission)  and the NFA (National Futures Association) for alerts posted by users. Lastly it is our opinion that automated forex trading systems should be used by experienced forex traders as a means to save them time from having to look through large amounts of data and information, the point of them being to point out your options so that you can concentrate on them instead of looking for viable options in the first place.

For example with our recently post on gold prices falling below the $1,100 mark, we predicted that they would fall further and the price for gold today is at the time of writing listed at $1060.55. So prices of gold are plummeting at the moment, but will they recover? If so, should an investment be made right now or should you wait for prices to fall further? These are exactly the kind of questions you should ask yourself to define for yourself a good entry strategy. Forex trading depends a great deal on your timing, both for purchasing a lot for a certain currency and for selling it. This will determine whether the risk and the amount of pips you earn on any forex trade be it online, through automated software and with the aid of EAs (Expert Advisers) or through regular forex brokers.

There is no hard and fast rules for entry and exit strategies, but if you plan on staying in the black and minimizing risk and losses, most experienced forex brokers would tell you to exit early. This is not a rule of thumb, some forex traders prefer to wait it out and see a a currency reach its peak before cashing in on their pips, others prefer to take half their lot(s) out once they have made a decent gain and leave the other half until a peak is reached. Everyone has their own techniques but be sure to define your strategies and stick by them because if you don’t you may find yourself down by a significant amount and expect a turnaround which may never come.

Forex currency trading is a risky business and should never be treated as a game or thought of as gambling. Lots of online forex brokers offer free demo accounts where you can test out your forex currency trading skills and work out strategies that are effective for you and enable you to make gains.

There are many forex trading software or programs that help you make decisions on whether to buy or sell a particular currency, how do they do this? It is a rather complicated process, the program picks up data such as foreign exchange rates, trends, commodity prices, inflation rate, etc from all over the world and records it, then through statistical analysis it presents you with an answer in the form of buy, sell or hold. This is a very simplified process but does reflect accurately what these software do.

People on the other hand are not computers, and cannot assimilate information from all over the world that is changing by the second, record it, analyze it, process it and draw conclusions from it without taking a very long time. So much so in fact that by the time one arrives at a conclusion, the opportunity to make gains by trading foreign exchange has already gone.

Now this does not mean that we must rely on computers and forex software programs to make decisions or currency trading strategies for us. What this means is that one must always try to be up to date to news and if possible (and legal) should be aware of what is about to happen in the immediate future (through announcements or otherwise). This way one may be sure to be in tune with the forex market because amongst other things the forex currency trading market is also influenced by speculation. It is not clear how much forex trading speculators affect the market but it is considered to be a significant factor that determines the market value of any currency.

Other important forex rates determining factors include political conditions in a country (in general the more unstable a country is politically the worse the forex rate for that currency), economic conditions (an obvious example would be that if a country is in recession its currency is likely to depreciate) and the exchange rate regime chosen by the Central Bank of a particular country.

Thus for example, an announcement made by the Central Bank of a country that it shall devalue the currency from its current price to a lower level will result in people trying to purchase foreign exchange as soon as possible (although the Central Bank is almost certain to take measures to prevent people from doing so). Thus news and forex currency trading are inseparable and to not be up to date before making forex trading decisions is a very risky thing to do.