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Live Forex Trading

Written By

Jemma Grist

Written By

Jemma Grist

Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.

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Edited By

James Barra

Edited By

James Barra

James is an investment writer with a background in financial services. As a former management consultant, he has worked on major operational transformation programmes at prominent European banks. James authors, edits and fact-checks content for a series of investing websites.

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Fact Checked By

William Berg

Fact Checked By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

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Updated

Sep 26, 2024

Interested in live forex trading, but not sure where to start? In this 2024 guide, we offer a comprehensive overview of real-time forex trading. From trading hours to tutorials, charts, broker reviews and accounts, we cover all you need to know to get set up in the world’s largest and most liquid global market.

The Forex Market

Foreign exchange, or forex (FX), is a global marketplace that facilitates the exchange of currencies. It is open 24 hours a day, five days a week and is the only truly continuous trading market in the world. Currencies are traded worldwide, across all major financial hubs and timezones. As such, it is an active marketplace with particularly high volumes during periods in which two trading sessions overlap.

Importantly, the forex market is decentralized which means that all transactions are conducted Over-the-Counter (OTC), through global networks, as opposed to central exchanges.

Traditionally, the forex market has been dominated by banks, hedge funds and large corporations. But, as barriers to entry are diminished, and the popularity of live forex trading grows, we are seeing an influx of smaller retail investors. Spreads in forex markets also tend to be tight and upfront costs are low, which have contributed to a changing landscape.

What Is Forex Live Trading?

In one form or another, the forex market has been around for centuries. Societies have exchanged goods in order to purchase other goods since the dawn of civilization. But the modern forex market as we know it today took shape only in the late 20th century.

Following the collapse of the Bretton Woods accord in 1971, more currencies were permitted to float ‘freely’ against each other with the value of a currency determined by demand and circulation. Forex is essentially traded by anticipating whether a currency will appreciate or depreciate in value relative to another. FX is also always traded in pairs because when you buy one currency you are essentially selling another.

Live forex markets are considered relatively transparent environments. Disclosures are not mandated and with all transactions taking place OTC, it is free from manipulation by a single dominating authority.

How To Trade Forex Live

There are three main ways to trade forex live with each catering to different investors:

• Spot market – this is the most popular way to trade forex. For the most part, when people refer to forex trading, they are referencing the spot market. Here, currency pairs are traded with rates evaluated in real time, based on supply and demand.
• Forward market – a forward contract is a private, predetermined agreement between two parties to buy a currency at a future date.
• Futures market – a futures contract is an agreement between two parties to sell a currency at a future date, often following standardized terms.

Both forwards and futures contracts are binding and normally exchanged for cash upon expiry. Typically, these markets are used by large institutions to hedge against future exchange rate fluctuations.

Motives For Forex Live Trading

There are two primary reasons to trade forex. The first is for speculation and the second is for hedging.

There are many external influences that affect the valuation of a currency. Politics, demand, tourism, trade, and economic strength all have an impact. As these influences change, the valuation of a currency changes. Importantly, accurately predicting these changes presents an opportunity for profit.

Alternatively, hedging is a strategy used by businesses, authorities and individuals to ‘protect’ themselves against future price fluctuations. It serves much like an insurance policy. The individual will commit to buying or selling currencies at a fixed rate in the future. Any subsequent price changes will not affect the individual because they have already committed themselves to fixed levels.

How To Start Trading Forex Live

There are a few hoops to jump through before you can start trading forex live:

1. Educate yourself – whilst live forex trading is not overly complicated, it does require specialist expertise. It is worth spending some time upfront to get to grips with the processes, terminology, and any software you are looking to use.
2. Open a live account – to trade forex live, you will need to open a real-time account with a forex trading platform. This is arguably the most important step. With so many brokerages to choose from, it can be daunting but take your time. Do your research and where possible, make use of simulator accounts to test platforms risk-free. If you are a beginner, you might want to look into micro lot accounts, which have low capital requirements and variable trading limits.
3. Formulate a strategy – having a clear strategy serves as a roadmap. It helps ensure you move in the right direction and eases some of the psychological pressures of live forex trading. There is no ‘one shoe fits all’ approach when it comes to finding the right strategy. A good technique will take into account your goals, level of expertise, and risk-appetite. It goes without saying that whichever strategy you opt for should be underpinned by robust risk management considerations.
4. Be disciplined – success does not happen overnight. Be consistent, be disciplined and be patient. Ensure you keep on top of your figures, stay up to date with major global news or developments and stick to your strategy!

Live Forex Strategies

In its simplest form, a forex trade can either be a long or short position. In a short trade, the trader is anticipating the price to fall. In a long trade, the trader is betting on the price increasing. From there, trading strategies can be further categorised into four areas:

• Scalping – profits are small but (hopefully plentiful). Positions will be held for only seconds, minutes at most with a view to taking many small wins within a short period. Scalping relies on predictable swings so typically takes place during high volume windows.
• Day trading – short-term positions held and sold within a single day. Much like forex scalp traders, live day traders rely on cumulative profits to generate incremental gains. As reviews show, successful day traders will utilise technical analysis and indicators to inform their live forex trading positions.
• Swing trading – positions held for longer than a day. They tend to be taken up following major political announcements or events. Whilst they do not require constant monitoring, swing traders need to be up to date with affairs that may have an impact on the valuation of a currency.
• Position trading – long-term trades. Positions may be held for months or years. They require analysis, expertise and patience.

Platforms

Live forex trading platforms, such as MetaQuotes’ popular MT4, are the interface through which investors place trades. Most platforms offer real-time charts and allow traders to open positions directly from graphs.

A platform essentially defines how you can interact with the markets. So, what can you expect from your live forex platform?

All FX trading platforms feature charting these days. You need live charting examples. Make sure your broker also provides real-time prices and rates. Understand that the pricing of your broker depends on its liquidity providers to some degree.

The top terminals also offer a selection of technical indicators and trading tools, such as robots, otherwise known as Expert Advisors (EAs). In addition, most platforms provide live news streams. Through this feature, you can handle the fundamental part of your analysis.

The leading forex trading platforms support several order types. As a live trader, you need to understand how limit orders and stop orders work, among others.

The best trading platforms will also support a reporting function. You may need to use this for tax purposes. Note, some online platforms provide higher quality reports than others so if this is important to you, make sure you opt for a broker that offers a reliable service.

Forex Live Charts

There are a number of charts used in live forex trading. Charts help traders to identify trends, spot opportunities, and monitor movements. Key charts for live forex trading include:

• Line charts – are the most basic and commonly used charts. They are typically used as a starting point for further technical analysis. Most useful when it comes to identifying major trends.
• Bar charts – are used to identify whether a market is a buyers market or a sellers market. They represent specific time periods and offer detailed price information.
• Candlestick charts – first introduced in the 18th century by Japanese traders, these charts outline market direction. They are visual charts and are easier to read than the others.

Live Trading Signals

Forex trading signals are essentially trade triggers. They tell the recipient whether to buy or sell a certain currency pair, such as the JPY/USD. The signal may contain additional information about the timing, stop loss, take profit, etc.

Live forex trading signals may originate from expert investors or various technical indicators. Advanced signals are not free but may be worth the investment.

Live Prices

For real-time forex traders, access to live prices and quotes is essential. The current price of a currency is its most recent selling price at an exchange. The best forex brokers, therefore, offer instant pricing updates and rapid executions to prevent slippage.

Live Forex Trading Rooms

A live forex trading room is a place where traders can hold talks and build relationships with other investors as well as develop their investing skills and expertise. These popular groups are suitable for all, including beginners and seasoned professionals – there is always more to learn!

Trading rooms are essentially a social environment where experienced trading professionals will share advice, ideas, training tips, and sometimes even run contests. Graphs and charts are dissected, tools and software are leveraged and new strategies are put to the test. The content of sessions will vary, one room might focus on forex day trading whilst another might be using scalping strategies. Make sure you do some research and look at reviews to find the right live forex trading room for you.

Some live forex trading rooms are free but most charge a fee to enter and participate. Session length and frequency will vary between time zones but most will permit you to join from overseas. Conversation amongst participants is encouraged and facilitated through live chat features or a live forum.

Demo Accounts

Demo accounts are not live trading accounts but if you are new to trading, they are the best place to start. Demo accounts, also known as paper trading accounts, are simulations of real-world trading environments. They are useful because they offer investors a unique opportunity to trade risk-free. It is the perfect way to test out a new FX strategy or get to grips with a new platform.

Not all forex trading brokers offer a demo account, but many do. Where possible, we always recommend making use of it.

Trading Videos

The benefits of watching live forex trading videos to improve your profitability are obvious. Most forex educators deliver their lessons through videos. An interesting take on using videos for live forex trading is to record yourself. This way, you can analyze your emotional reactions later. It is important to record the screen as well as yourself when shooting such videos.

Note, FX course downloads may also prove useful.

Pros & Cons Of Forex Trading Live

Live forex trading has a lot to offer the right trader:

• Volume and liquidity – high trading volumes across forex markets mean they tend to be liquid. Liquidity makes for easier entries and exits.
• Accessibility – forex can be traded live around the world, 5 days a week. Each day opens in Australia and closes in New York. Broad coverage provides ample opportunities for profit generation.
• Leverage – is widely used in forex markets and means that you can earn big off a comparatively small initial investment. Compared to the stock market for example, which often requires large sums from the get-go, the forex market is more accessible to smaller retail investors who might not have the luxury of sitting on vast sums of capital.

Whilst live forex trading presents opportunities, it is not without its pitfalls:

• Volatility – can be viewed as both a positive and a drawback. Forex markets tend to be highly volatile, much more so than stocks or commodities. Whilst sudden fluctuations have their merits, it does mean levels of risk are high.
• Expertise – the price of global currencies is subject to a change via a whole range of influences. From war to economic collapse, politics, and speculation, to trade forex successfully, traders will need to ensure they are up to date with global affairs. Furthermore, an understanding of the fundamentals of economics and behaviour is valuable.

Final Thoughts on Forex Live Trading

Live forex trading can be exciting and profitable. In 2024, a growing interest in retail forex investment has inspired a whole range of platforms, tools, and resources including webinars, live news feeds and forex trading rooms where experts share top tips and advice. Traders today are spoilt for choice.

As always, ensure you do your research, find a reputable broker and utilize demo accounts where available.

FAQs

Is Live Forex Trading Suitable For Beginners?

Live forex trading should only be carried out by traders with a good level of experience or those willing to risk capital. It can be risky, so until you are confident you are equipped with a good level of understanding, make the most of demo accounts to hone your skills.

Is Live Forex Trading Profitable?

It certainly can be. There are many successful live forex traders who have enjoyed long and fruitful careers. And whilst the risks should not be overlooked, with the right experience and expertise there is no reason you could not be a successful forex trader.

Is Live Forex Trading Available In The US?

Yes, it is possible to trade forex live in the US as well as most other countries. See our list of the best live forex brokers in 2024 to get started.

How Do I Get Started Trading Live Forex?

To trade forex in real-time, you will first need to open a live account. Visit our list of top forex brokers to start trading today. Many of our recommended brands also offer live forex currency strength meters and exchange rate forecasts.

What are Live Forex Brokers?

Live forex brokers are service providers that act as intermediaries between retail traders and online currency markets. They make it possible for traders to speculate on major forex pairs, such as the EUR/USD and GBP/USD, as well as minors and exotics.