By James McKee – Now that you have a basic understanding of the words used in the market I will go ahead and share with you some slightly more advanced terms used to convey events in the currency world and specific items or systems associated with forex trading. There are many electronic methods utilized by traders every day to make their activities more efficient and effective that every trader should be aware of. Many of these things are completely free to use but again, you must first understand something before you can utilize it, in this article I aim to do just that!<\/p>\n
Candles- One of the very first things a new Forex trader will notice in the market when they begin to get their feet wet is the esoteric data flowing around on various charts. Forex charts can be a bit intimidating because of the colors, units and overall composition being presented to the trader. The real key to understanding this data is the same as any thing else you’ve ever learned, one step at a time. The first step in understanding a candlestick forex chart is the candle, a candle is a block with a line coming out of the top and bottom which represents a period in time which either gains or losses for the currency pair in question. Most often gains will be represented by green candles while losses will be represented by red ones. As you will see looking at just about any chart utilizing candles gains and losses are numerous and go back and forth often, but it is the overall arc you need to watch and follow in order to come out on top. A candlestick chart is just one type of chart used in the Forex community, bar charts are also very widespread.<\/p>\n
MT4- One of the most popular automated trading systems currently being utilized by forex traders is MT4 or Meta Trader 4. However where time is money you will notice that traders love to use abbreviations, pseudonyms or whatever else they can to save time when discussing something market related or otherwise. MT4 is a useful tool to have but by no means is it a silver bullet and as with every thing else you should approach this software with caution and an open mind.<\/p>\n
EA- This is something that should raise the hairs on your neck and always bring about extreme critical thinking and caution, EA or “expert advisor” is a type of software which advises you on which trades to make and when. While some have proven to have limited success all too often the real case using an EA is that you not only wasted money on bad software but lost some listening to it. Is it possible that an EA out there will work for you? Sure it is, but it is not likely and therefore you should always remain skeptical when you see someone refer to having an EA that will fix all of your problems. Caveat Emptor.<\/p>\n
Please feel free to ask me for any clarification regarding the information and above, and do not be afraid to visit forex forums for advice.<\/p>\n