Last update 2020.08.11
Unlike other markets, the Forex market does not have a central exchange, so there isn’t a measure that tracks the entire market as a single entity. Unlike U.S. stocks, which can be tracked with broad market indexes such as the S&P 500 index, the decentralized Forex market has many different flows of currency operating simultaneously around the world.
There are around 30 main individual currency pairs for the entire Forex market, each pair’s exchange rate is quoted for itself and not as some sort of market average. Because one of the currencies in a pair is always strengthening against the other, you can always find an exchange rate that is going higher.
In a sense the Forex market is always bullish, you simply have to look for the currencies that are strengthening against weaker currencies. Thankfully, that is easier than ever to do for the modern trader using tools such as those found on wiseinvest.ai.
The Forex market allows for the trading of currencies between countries and as such they are always expressed as currency pairs.
The most popular currency pairs are:
- EUR/USD – Euro Dollar
- USD/JPY – Dollar Yen
- GBP/USD – Pound Dollar
- USD/CHF – Dollar Swiss Franc
All currencies are quoted in pairs. The first currency quoted is known as the base currency (the “EUR” of the EUR/USD currency pair for example). The second currency quoted is known as the quote currency (the “USD” of the EUR/USD currency pair for example).
In the case of EUR/USD, the price quoted (say 1.08404) tells you how much you’d pay in the quote currency (USD) for one of the base currency (EUR). If tomorrow’s price for the EUR/USD is quoted at 1.10101, it means the EUR has become more expensive compared to the USD, or that it takes more USD to buy one EUR.
It’s possible that the price action of certain currency pairs affect the price of other currency pairs.This is known as correlation. For example, if the dollar (USD) gets weaker compared to other currencies it’s logical that the EUR/USD (where the USD is the quote side) and the USD/CAD (where the USD is the base side) would react opposite to each other.
Raditional notions of bullishness and bearishness in stocks or bonds can become confusing if used in Forex trading the same way. For example, if the USD/CAD chart is moving up and to the right, it’s easy to think that it is bullish. But it is more accurate to understand that the Canadian dollar is weakening, or losing value, compared to a strengthening U.S. dollar which is comparatively gaining value.
Buying the EUR/USD is really going long the euro and short the U.S. dollar, so you expect the U.S. dollar will fall in value against the euro. Shorting the EUR/USD is really an expectation thatthe value of the euro will fall in value compared to a bullish U.S. dollar.
Another way to think of currency pair movement is the expectation of one nation’s economic outlook and growth compared to another’s. As such, changes in Overnight Interest Rates, Economic data showing the performance of a nation’s economic activity, and changes in the Political climate of a country can significantly impact the exceptions traders have and wildly affect the currency pair representing these nations.
The best way to trade forex
There are two ways to invest with our AI in forex:
1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.
Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker Oanda. Click here to open an account.
With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account and you can monitor the AI trading performance directly on our dashboard.
2. Manually with AI-Signals.
Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.
There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.
Each AI signal alert consists of the following five data points:
- Symbol (forex pair)
- Direction (long or short)
- Position size (number of units or lots)
- Take profit (price level to exit with maximum gain)
- Stop loss (price level to exit with maximum loss)
You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.
When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate or change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.
Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.
The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.
The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.