6 Forex Services You must know and 2 Types of Automated Forex Systems for Forex Trading
Is an automated system important to the Forex trading system?
Forex market is the largest in the world, not only in terms of average daily turnover and average revenue per trader but also on the different services that revolve around it. There are at least 6 services that revolve around this huge market and have an impact, either directly or indirectly to the value of currencies:
1. Central Banks
Central banks play an important function in the Forex market and have control over and regulate the supply of different currency, inflation and interest rate. Apart from stabilizing the Forex market through the use of foreign exchange reserves, they also set the target rates for the currencies that they are handling. Thus their involvement in the market is enough to stabilize a particular currency.
2. Banks
Banks are the major players in Forex market. They cater to large quantity speculative trading as well as daily commercial turnover. A typical established bank can trade billions of dollars worth of foreign currency daily. Some of these trades are undertaken on behalf of their clients but most are through proprietary desks.
3. Investment Management Firms
Investment management firms are companies that normally manage huge accounts on behalf of their clients, for example endowments and pension funds. They use the Forex market to facilitate transactions, specifically in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
4. Commercial Companies
Commercial companies normally trade in smaller quantity of foreign currencies compared to the larger banks and their impact on the market rates are small and short term. However, the trade flows from transactions made by commercial companies are essential factors with regards to the long-term direction of the exchange rate of a certain currency.
5. Retail FX Brokers -
Retail FX brokers handle a fraction of the total volume of Forex market. A single retail Forex broker estimates retail volume of between 25 to 50 billion dollars each day, which is estimated to be at 2% of the total market volume.
6. Speculators
Speculators are individuals who purchase and sell foreign currencies and profit through fluctuations on its price as opposed to popular methods such as interest and dividends. They perform the important role of transferring the risk to individuals who do not wish to bear it.
In Forex market alone, there are already six major players partaking on the $1.8 trillion worth of daily turnover. With a large number of Forex players, there is really a need in switching from manual to automated Forex trading system.
Among the aforementioned major Forex players, the automated trading system is of great advantage to the speculators. Since they focus on the price fluctuations of various foreign currencies in order to profit, the real time data analysis will help them determine trades that will give advantage to them.
There are several automated Forex trading systems available in the market. There are also automated Forex systems that are offered for free or as part of their trading account acquired from their Forex brokers or agents. Such complimentary system packages are typically elementary trading system. Thus, if you are looking for more features, you can avail of it through additional payments.
There are two types of automated Forex trading system. These are discussed in the following:
1. Desktop-based Automated Forex Trading System
For desktop based automatic Forex trading system all the Forex-related data are stored on your desktop’s hard drive.
This system is unpopular to Forex traders because all data are susceptible to computer virus contamination and other security problems. Worse, when the computer malfunctions, all essential information might be lost and cannot be retrieved (unless you have some back-up files of your own). However, it is little expensive compared to the other types of automated trading system.
2. Web-based Automated Forex Trading System
For web-based automatic Forex trading system the security of your Forex account and other data are provided by your web-based provider. These are hosted on secured servers. It is also convenient because there will be no software required on your PC and it is universally compatible with your Internet browser.
There are many different automated trading system and you may try and test out some of them using demo accounts first before deciding which is the one that suits your personal preference and needs. And there is one here which worth your effort to explore, this system is called FAP Turbo.
FAP Turbo allows you to choose to either run it off your PC or have it run on a hosted machine. The additional advantage of running it off a hosted machine is that you choose to run it 24hrs a day and have it do the trading while you sleep.
FAP Turbo is very affordable and comes with excellence technical support.
Even if you are just a small-time Forex player, it will be to your advantage if you will use an automated Forex trading system for your future trades.
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