Forex Social Networks - What Are They and Are They Useful-Forex Social Network Useful,iphone forex,iphone forex app,iphone forex chart

Forex Social Networks - What Are They and Are They Useful-Forex Social Network Useful

Within the last year, there has been an increase in the number of Forex social networks in existence, potentially as a result of the incredible success of the likes of Facebook. Whilst many people wil know of a Forex social site, most of these people never sign up.

Do you know any Forex social sites? Are you currently a member? Chances are that the answer to the first is "yes" and the second is "no". This is not surprising. Let's take a look at why Forex social networks are having a hard time gathering members whilst looking at the reasons why joining one might actually be an extremely good idea in the longer term.

What is a Forex Social Network?

Unlike Facebook or MySpace, a Forex social network is a dedicated network of Forex traders, all of whom share their trades for their friends to see. There are a number of different iterations and formats - but in general, the idea of a FX social network is to increase transparency and provide a medium by which you are able to share your trades and trading knowledge with likeminded people.

One FX social network has even gone as far as allowing you to "follow" a particular trader, which automatically places trades on your account when they make a trade. This is an interesting feature - bit also quite a dangerous one at the same time.

Why FX Social Sites Might be Useful

Despite the hassle of setting up yet another social profile and going through all of the steps to link your FX social account to your FX broker account (so that all of your trades can be recorded) - there are a few benefits to being part of a social network.

Take a look at the list below. This list is a number of benefits that people see from joining an FX social network:

Able to verify that the majority of traders are on the same side of a particular currency pair as you are
See what other likeminded people and likeminded traders (those using similar strategies) are doing with their trading accounts
Filter through top trades and see which accounts are making the most money

Another great reason to join an FX social network is that it allows you to surround yourself with people who enjoy doing the same things as you do. Unlike Facebook and MySpace, where your "friends" might think you are a bit "nerdy" for continuously talking about FX trading, a specialty FX network will accommodate you and be on the "same page" as you are.

Forex Social Networks - What Are They and Are They Useful-Forex Social Network Useful

What is the Next Big Technological Step in Forex Trading?

FX trading utilizes some of the most complicated financial trading mechanisms and software in the entire financial world. It has been argued a number of times that facilitating the retail FX trading environment takes up more resources throughout the world than any other financial market - and we absolutely believe that this is true.

Each and every day, over 5 trillion USD worth of currency changes hand. To keep track of all these millions of transactions, technology needs to continue to evolve to make trading faster, more reliable, and of course - fairer.

So where is FX technology heading? Are we in for a revolution in the way that we trade Forex in the next few years, or are things currently sailing along a nice course smoothly?

The Next Big Thing in Forex

We've already seen the addition of Forex trading apps for iPhone and Android devices. The iPad has also revolutionized the way that we trade Forex. But are there any other technological developments which could take place in the near future?

Yes! However, they are more behind the scenes changes than ones which are actually practical to use from a customer standpoint.

One of these changes will be the way that Forex transactions are processed behind the scenes. At the moment, most transactions are routed through a dealer before actually being executed. Whilst this is still a very fast method of trading - it does lack the speed and ability that "non-dealer" trading has. Essentially, non dealer trading is where trades go straight to the trading floor, so that you broker doesn't even have a chance to view the trade before it is executed.

There are a number of positive features to having this take place. Trading times are increased, and the following things are minimized:

Slippage
Re-quotes
Intervention and trade cancellation by the FX broker
Trading errors arising from Forex broker error

As you can see, once all Forex brokers begin using this new system, trading times will be chopped in half, and the industry as a whole will operate much more fluidly.

Other Enhancements to Forex Trading

A few other enhancements include trading from the charts. This is utilized currently by just a few Forex brokers, but there are still a number out there which do not allow this functionality. This should change within the next 2 to 3 years, as chart trading becomes much more important to technical traders.

What is the Next Big Technological Step in Forex Trading?

Do Any Brokers Offer Free Rollover for Open Forex Trades?

One of the features of the Forex market is that you are able to leverage trades to a high degree. For example, whilst you may only have $500 to invest in the Forex markets, you will be able to trade up to 200 or even 400 times this amount, thanks to the power of leverage. Taking a $500 account size with 400:1 leverage, you will be able to trade up to $200,000 worth of currency at any one time.

However, for this to be possible, you need to borrow money from somewhere. The $200,000 doesn't simply appear from nowhere.

In addition to borrowing the money, you also have to pay to borrow it. This is considered to be the rollover cost or premium - and it is usually charged to your account at the end of each business day.

Rollover Costs as Expenses

Rollover costs can accumulate to be quite expensive in the long run. This is especially the case for traders who hold positions for a longer term - i.e. more than a month. If a trade, for example, is held for 45 days before it is closed out, it will accumulate 45 days worth of rollover charge. At $2 to $3 per day - depending on the position size, this presents quite a significant cost to a trader.

To work out the cost of rolling a position over to the next day, you need to look at two things:

Size of the position
Currency pair being traded

Both of these variables will cause the rollover amount to be different.

For example, if you have a position which is of $20,000 size, you will probably be paying only a few cents to roll it over. Contrast this to the position size of $200,000 or more above, and the cost of rolling over becomes significantly more.

Additionally, the currency pair you are trading matter to a great extent. When calculating rollover amounts, the difference between the official cash rates in both correspondent countries is taken in to account.

I.e. if you are trading the EUR/USD, the official cash rate in the Eurozone will be compared to the official cash rate in America - and the difference will represent the rollover amount. Hence, if you choose a currency pair with a very small difference between official country cash rates, you are able to minimize the rollover cost on a long term trade.

Brokers without Rollover Costs

Unfortunately, because of the cost to brokers of providing additional leverage to you to use in the Forex markets, there is no such thing as a broker which doesn't charge rollover interest. This would be like trying to find a bank which didn't charge any interest on a loan - it is simply not ever going to happen because it would generate a loss for the lender.

Do Any Brokers Offer Free Rollover for Open Forex Trades?

What are the Risks of Trading Forex Autopilot Systems?

Trading foreign exchange is a risky business - even for the most educated of traders. However, when it comes to trading Forex autopilot systems, the risks are magnified even further.

Let's take a brief look at the things you need to keep in mind when trading with autopilot systems (and robot trading systems) so that you can ensure that you account balance is protected at all times.

Running the Forex Autopilot Server-Side

Probably the most important consideration that you need to think about before trading or running a Forex autopilot system is how you are actually going to run it. Are you going to simply run it from your computer, or will you run it on a third-party server?

Hopefully, you have picked the latter option. The problem with running a Forex autopilot script or program from home is that home based internet connections are relatively unreliable. Just imagine what would happen if your internet connection failed at a pivotal moment when a trade was about to be placed?

Alternatively, think of an even worse scenario where you have an open trade on the market, the Fore autopilot system indicates that the trade should now be closed, but your internet connection is temporarily down!

As you can see, running a Forex autopilot or Forex system on your home computer is never a good idea. You should always look to a third party - which has a speciality in running such scripts, to ensure consistent reliability of the program.

Finding a Server to Run the Forex Autopilot System

Once you have found the right Forex autopilot system, you will now want to look for an appropriate server to run the script on. There are a number of options out there - but we would highly recommend that you speak to your Forex broker to discuss what server they believe would be best for the program. If you have a technologically advanced Forex broker, it might even be that they have their own server that you can run the program on.

Ultimately, this is the only risk to running a Forex autopilot system (other than the risk that the system presents on the whole).

Hence, you should take steps to mitigate this risk from the outset, so that you do not learn this lesson the hard way in the future.

What are the Risks of Trading Forex Autopilot Systems?

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