How to open Axi's Forex Trading Account?

Open Axi’s Forex trading account for free

To start trading Forex with Axi, you just need to:

1. Go to Axi’s Official Website;
2. Open a live trading account for free;
3. Make a deposit via any method you like;
4. Log in to Axi’s MT4 and start trading.

For any inquiries, you can contact Axi’s multilingual support team available 24 hours a day and 5 days a week.

With Axi, you can open trading accounts and make a deposit without any fees charged.

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Forex trading on Axi MT4

The foreign exchange market known as the forex (or FX) market is nothing more than the global market where you can buy and sell currencies.

Here are some points that underline the uniqueness of the forex trading market:

Market size

The forex market has a daily trading volume of up to 5 billion USD.

Forex trading hours

FX brokers give access to all 3 major forex markets (New York, London, and Tokyo) where almost all currency pairs are traded. Therefore, currencies can be traded around the clock during the weekdays.

Stability

Unless a major event like Brexit occurs, currency prices tend to move very slowly. For this reason, currencies are in fact quoted at the 4 decimal place (except for the Japanese yen). On a typical day, a currency moves around 0.0010 – 0.0030. Furthermore, the size of the forex market means that even very large transactions have a minimal impact on prices, making forex markets less prone to market manipulation by a single entity.

High Leverage

Due to the stability of a currency, forex trades almost always harness the power of leverage. Leverage allows the use of a smaller amount of money to operate with a larger amount. For example, with a leverage of 1: 100 the trader can use 100 USD on his trading account to buy a EUR position with a value of 10,000 USD. When the euro undergoes a change in value of 0.0001, the fluctuation of the position is 1 USD. As can be appreciated, a very small change in the price of a currency can result in a large gain/loss for the trader. Furthermore, this means that a retail trader can start trading forex with a relatively small amount.

Deep Liquidity

Currency pairs can get quite liquid due to the volume of trading and the limited number of currency pairs on the market. However, the liquidity of currency pairs can be less than normal when trading emerging market currencies, such as the Sri Lankan rupee.

Fees and expenses

FX commissions are integrated into the spread between the bid price and the ask price (more on that later) and this results in a variable commission instead of fixed commissions.

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Available Forex Currency Pairs for Trading

In every transaction, there is always something that the buyer gives to the seller and vice versa.

In forex, the buyer gives money to the seller, while the seller gives the money in a different currency to the buyer.

Therefore, every forex transaction is formed by a currency pair.

Currencies are denominated using the ISO 4217 currency code. This code is always three characters.

The following table shows the currencies traded on the foreign exchange markets in 2016, with their respective market shares.

Since currencies are traded in pairs, the total market share amounts to 200%.

Due to the particularly large size of the US economy and the fact that most commodities (such as oil) are traded in USD, the FX market for the USD is far superior even to other currencies.

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How are Forex Currencies are paired?

An FX currency pair is always quoted in the following way: USD/CAD 1.30425

The currency on the left, which is the USD in this example, is called the base currency.

The currency on the right is called the secondary currency.

The base currency is spent to purchase the secondary currency.

The number represents the amount of secondary currency that is obtained by spending one unit of the base currency.

In this example, spending one US dollar yields 1.3042 Canadian dollars.

The fourth decimal place is called a pip.

A pip is the smallest unit tradable on the FX market.

Therefore, the fifth decimal place is given for informational purposes only and is called a pipette.

Some brokers do not quote the pipette.

The only exception to the above is currency pairs with the yen.

The pip becomes the second decimal, as the yen is relatively much less valuable than the major currencies.

Therefore, the USDJPY pair will take the following form: USD/JPY 111.604

Due to the dual nature of the currency pair, if an FX trader wants to buy the base pair using the secondary currency, he can choose to sell the currency pair instead of buying it.

For example, you can buy 1 USD with 111.60 JPY according to the above quote.

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Trading Cost/Spread (Bid and Ask Prices)

Although it is solid for most people to see only one price for currency pairs, there may be a discrepancy between what the seller is willing to sell and what the buyer is willing to pay.

Let’s take this example:

• GBP/USD 1.3074 Ask Price
• GBP/USD 1.3070 Bid Price

The first price, ask price or ask price, indicates that a buyer is willing to spend 1 GBP to buy 1.3074 USD.

Instead, the seller is willing to accept 1.3070 USD in exchange for 1 GBP.

The bid price or bid price is usually lower than the ask price.

The difference between the two prices is known as the spread.

This spread can be different depending on the broker used by the FX trader, as, as a rule, the broker adds a certain amount to the spread to generate a profit.

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What’s the difference between ECN, NDD, and STP?

The forex market is made up of retail and institutional traders without a central authority such as a stock market.

Traders can vary by transaction, from the smallest individual traders to investment management companies, hedge funds, and central banks.

A retail trader will tend to use a broker that has access to liquidity providers, i.e. large institutions that trade with brokers.

Generally, brokers will provide an online platform on which retail traders can execute trades.

Based on the structure of how trades are performed, brokers can be classified as follows:

• Market Maker
• ECN broker
• STP broker

Market makers are counterparties to the transaction submitted by a retail trader.

Therefore, with a market maker, trades can be executed very quickly without re-quotes.

However, the trader’s loss becomes the broker’s gain and vice versa.

This can cause a conflict of interest, which can lead to price manipulation.

However, there are different market makers competing for business, so prices and spreads between different brokers tend to be similar.

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1. ECN Broker

The Electronic Communications Network (ECN) is used by major banks and other institutions that provide price feeds to the ECN pool.

The broker has access to this ECN pool and can therefore offer the trader the best ask and bid prices.

This can lead to a very low spread between the bid price and the ask price, sometimes even close to zero, i.e. with a bid and ask price substantially equal.

Brokers usually charge a flat fee on each trade.

Therefore, traders who engage in high-value trades can save money by using ECN brokers.

Also, as ECN brokers are just intermediaries between liquidity providers and traders, they don’t profit from traders’ losses.

Therefore, this type of broker has much less incentive to manipulate prices.

However, trades made with ECN brokers are subject to re-quotes, a condition where the execution price varies from the time the trader places the order, as the volume provided by the counterparty at a specific price may not be sufficient for full execution of the transaction.

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2. STP broker

STP brokers are similar to ECN brokers in that they act as a link between traders and liquidity providers.

The main difference is that STP brokers have connections with individual liquidity providers.

They usually profit from an additional spread on the bid / ask price instead of one
commission.

While the above classifications are generally accurate, on the practical side there may be specific characteristics, fee structures and trust factors relevant to choosing different brokers.

Therefore, before choosing a broker, you should exercise due caution and carry out specific research on individual brokers.

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Axi’s Trading Platform – MT4

Trading platforms are essentially the type of software used by traders to place orders.

Each broker can offer its services through different platforms.

MT4 Most FX brokers offer MT4, as it has become the most popular FX trading platform in the world.

On this platform, there is certainly no shortage of training materials and automated scripts (called Expert Advisors).

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Axi MT4 Price Chart

After selecting a trading platform and broker, the next step is to learn how to trade.

For this purpose, the basic tool to use is the line chart.

This type of chart very simply represents the price of a currency pair over a given period of time.

While simple to read, the line chart does not include a lot of information relating to rapid market movements which can be very important for short-term traders.

The main reason for this is that a line chart links the closing price of each time period, so information regarding the price movement within that time period is lost.

Candlestick charts, by contrast, present most of the relevant data in an elegant way.

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Axi MT4 Candlestick Chart

While they may seem complicated at first, candlestick charts are very simple to read.

Candles represent four relevant price points in a given time period.

Normally each period can be set to 1 minute, 5 minutes, 30 minutes, 1 hour, day, week, month, and so on.

The four relevant price periods are shown in the diagram.

The main body of the candle will be colored green (or empty) if the closing price is higher than the opening price in that time period, that is if the price has risen.

If the body turns red or black, it means that the price has decreased over the period under review.

Knowing how to read candlestick charts is the first step before you can use the various analysis tools available and become a successful trader.

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Available Order Types on Axi MT4

As a rule, forex brokers offer the following types of orders to ensure that the trader can execute their strategy without having to constantly monitor the market.

Market order

This is a manual order in which the trader asks the broker to open a buy or sell position at the price currently available on the market. This type of order is used if the trader wants to open a position in the shortest time possible.

Limit order

We speak of a limit order when the trader asks the broker to go and buy at a price lower than the market price or to sell at a price higher than the market price. For example, if the USD / CAD is currently trading at 1.3012 and the trader believes that the price will move to 1.3030 before dropping, the trader can place a sell limit order at 1.3030. When the price reaches or exceeds 1.3030, the broker will automatically sell the position at the best available price.

Stop-loss order

A sell stop order can be set up in such a way that the sale is only executed if the price is at or above a certain level. This type of order can be used in conjunction with a limit order so that the sale is executed automatically but not below a certain price. In the example above, if the trader also sets a stop loss at 1.3028, then the broker will proceed to sell at 1.3030, but will not sell if the price falls below the 1.3028 level. The same type of order can be used to buy and in this case it is called a buy stop.

Other types of orders

There are many other types of orders that an FX trader can use, such as stop entry, trailing stop, good till canceled, good for the day orders, etc. As a rule, we try to find ourselves in the position of not having to constantly monitor market prices. The use of these automated orders helps you execute your own trading strategy and to limit losses.

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Technical Analysis on Axi MT4

There are basically three categories of analysis that FX traders can use to predict the market trend.

Technical analysis consists of the use of a set of methods aimed at searching for patterns on the graph to predict future behavior.

Technical analysis assumes that all available information relating to a currency pair is already priced.

Therefore, the theory is that if a particular previous pattern is repeated, recognizing the pattern, the trader can try to predict the immediate future.

The biggest advantage of using technical analysis in forex trading is that the trader does not have to conduct research on the state of the economy and predict future political decisions.

Since the FX market fluctuates with patterns, it becomes much more practical to automate the trading strategy.

Finally, with more and more FX traders trading on technical analysis theories, there is a greater likelihood of it becoming a “self-fulfilling” prophecy.

Conversely, if the trader ignores the economic and political context that affects the forex market, it is easy to open losing positions, especially in the long term, even when clear signs of problems emerge.

What is Technical Analysis?

Tools and Techniques of technical Analysis

Even a novice trader can start using these tools without necessarily having to understand the technical calculations since the most popular platforms provide ready-to-use tools that can be applied directly to the chart.

Here are some basic tools of technical analysis.

1. Support and Resistance Lines

One of the most noticeable patterns on the forex market price chart is a cyclical upward and downward movement.

The turning or reversal points of these cyclical patterns define the support and resistance levels of a chart.

In very simple terms, the support line is the temporary limit that the price fails to breach to reverse the overall trend.

In the example above, the blue boxes support the general bearish trend and do not allow the price to record a reversal and follow an uptrend.

Resistance is the opposite of support. In the example, it is shown in orange color.

If the general trend was bullish, the support will be the minimum, while the resistance will be the maximum.

A basic trading strategy when you have a bearish trend involves buying the currency at the resistance level and selling at the support level, while in the case of an uptrend it involves buying at the support level and selling at the resistance.

While this strategy may work in theory, on a practical level it is almost impossible to accurately predict price movements and support/resistance levels without using other tools.

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2. Moving Averages

One of the basic tools to identify whether the price is generally following an upward or downward trend is that of the moving average, abbreviated as MA from the English moving average.

This indicator takes into account a number of closing prices and generates an average of the price for the reference periods.

The greater the number of closing prices, the stronger the moving average trend.

The diagram shows the 30-period moving average in orange, the 10-period moving average in black, and the 5-period moving average in blue.

As evident, the blue line follows market movements much more accurately than the orange line.

Therefore, the orange line shows a much stronger trendline or trend line.

However, since a price hike in a given period can unnecessarily affect a moving average line, traders tend to use exponential moving averages (EMA), which give more weight to more recent price periods.

In the example above, the blue line represents the 30 EMA line, while the orange one represents the 30 MA.

The 30 EMA is more sensitive to recent price changes, even if it still considers the previous 30 closing prices.

Therefore, it is more accurate to use the EMA trendlines to discern general price movements.

What is MACD (Moving Average Convergence Divergence)?

3. Oscillators

Assuming the trader has identified the overall trend, how can he be sure that the trend will not reverse as soon as he opens a position? This is where oscillators come into play.

Among the most common oscillators, we find the stochastic oscillator and the relative strength index (RSI).

Without going into the technical details of how they work, let’s see how to interpret the signals.

The stochastic oscillator and the RSI are similar on the graphics software.

Here, the bottom graph is the RSI, while the next one is the stochastic oscillator.

The blue line on the candlestick chart is the EMA 30.

The most important factor to identify here is that both oscillators exit their zones (breakout) in dark color before a trend reversal occurs.

Therefore, by studying the breakout of the oscillators, the trader can anticipate an imminent trend reversal.

What are Oscillator Indicators?

Other instruments and notes

There are many other tools such as Fibonacci retracement, Bollinger bands, and MACD that can signal possible future trends, as well as support and resistance levels.

The most important thing to keep in mind is that none of these tools can predict the FX market with absolute accuracy.

However, a trader can increase their forecast odds by adding these tools to their arsenal.

When you are still a beginner, don’t get overwhelmed, but it’s good to start with the basics.

This also applies to the adjustment of the parameters of the instruments mentioned above.

Using the defaults of the tools above, you may have a condition that sees the prediction come true, as most traders will use the same parameters in turn.

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Fundamental Analysis on Axi MT4

Fundamental analysis sees FX traders take economics and politics into account to justify the price swings of a currency.

The basic idea behind the analysis is that if it is expected that the reference economy for a certain currency will do better than that of other countries, the price of that currency will rise and vice versa.

The main advantage of fundamental analysis is that the predicted price swings are based on the real-world value.

Therefore, the identification of sufficiently important influencing factors can make it possible to accurately predict future price developments.

However, especially in the short term, prices can be dictated more by trader behavior that can be random.

What is Forex Fundamental Analysis?

Tools and Techniques of Fundamental Analysis

Unlike technical analysis, the fundamental analysis uses fewer charts and uses more economic indicators and research.

Below are some economic indicators and how these are related to the trend of currencies is explained.

1. GDP and retail sales

Gross domestic product (GDP) represents the economic output of a country.

The most important factor for traders monitoring is the annualized GDP growth rate.

As we get closer to the release date of a country’s GDP data, traders will have different ideas about the expected outcome and therefore tend to price consensus estimates.

As soon as the data is released, if there is better than expected growth, the currency will appreciate and vice versa.

Retail sales figures indicate consumer propensity to spend.

If consumer spending is contracting, it is possible that it is heading for an impending recessive cycle, as GDP is largely affected by retail sales.

When negotiating USD pairs, the US monthly retail sales report can be used as a short-term indicator to compare with quarterly GDP data.

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2. CPI and interest rates

The consumer price index (CPI) measures the inflation of an economy, that is, the speed at which the prices of goods are increasing.

If inflation turns out to be higher than expected, the monetary authority will raise interest rates to reduce consumer spending.

This means that more investors will be willing to buy bonds denominated in that currency, thereby increasing demand.

This, in turn, will lead to an increase in the price of the affected currency.

In the event that inflation is lower than expected, the price of the currency could fall.

Conversely, if traders perceive inflation as out of control, as in the case of Venezuela, the demand for the national currency can decrease very quickly.

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3. Employment reports

And the employment reports include measures related to the unemployment rate and wages.

If unemployment is low and wages are rising, the population will spend more in the future, thereby increasing GDP.

The reverse is equally true. Therefore, a positive employment relationship will tend to strengthen the currency of the reference economy.

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4. Geopolitical events

The indicators we talked about above refer to periodic measurements published by state agencies.

There may be other major events relevant to currency markets with geopolitical effects.

Events with repercussions for currency markets include Brexit, the US elections, the NAFTA agreement, trade wars, etc.

The thing every trader needs to evaluate is how an event is going to affect the underlying economy and, consequently, trading.

Even if other traders do not share your opinion, if the forecast is correct, the markets will move in your favor over the long term.

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Type of Trading Strategies on Axi MT4

There are several styles of forex trading that you can follow. In general, it is possible to divide these styles by the time horizon of holding the positions.

Scalp Trading

Scalp trading is the most active form of trading as positions are only held open for a few seconds or minutes. The strategy is entirely based on technical analysis as fundamentals cannot play any role in such a short time frame. For this type of trading, it is important
to select an FX broker with low commissions and fast execution times, as several hundred small trades are required to generate a significant profit.

Day Trading

Like scalp traders, day traders also use technical analysis, except for the presence of sudden geopolitical events. Day traders operate within a trading day and, as a rule, do not keep their positions open overnight. Even day traders need fast execution and low commissions to be able to make a profit.

Swing Trading

Swing trading is the natural next step in this series of trading styles. In this case, the positions are kept open for several days or weeks. Technical analysis is combined with fundamental analysis as both can detect factors that influence the price in this period of time. Since positions are opened and closed at lower frequencies, this can be a practical trading style for FX traders wishing to trade on the forex market, not full-time.

Position Trading

This is the trading style with the longest time horizons. Positions are typically kept open for several months or even years. In this case, FX trading is mainly driven by fundamental analysis. The most important criteria on which to base the choice of the broker are reliability and solidity, as it is imperative not to close soon.

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How to get started on Axi MT4?

Swing trading is the natural next step in this series of trading styles.

In this case, the positions are kept open for several days or weeks.

Technical analysis is combined with fundamental analysis as both can detect factors that influence the price in this period of time.

Since positions are opened and closed at lower frequencies, this can be a practical trading style for FX traders who want to trade on the forex market, not full-time.

Once you are familiar with demo trading, you can decide to use real money.

Also at this stage, it is very important to continue learning about new tools and refining existing knowledge.

It can be difficult to exclude emotions from FX trading, so it becomes imperative to use automated strategies for opening and closing positions, such as stop and limit orders to ensure that the strategy is followed scrupulously.

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