Real-Time Forex Trading

Real-time forex trading is a form of speculation in which a trader bets on the movement in the exchange rates of foreign currency pairs. This type of trading involves placing an order to buy or sell a specific currency pair at the current exchange rate. Real-time FX trading requires the use of real-time forex charting software.

Forex currency traders perform real-time forex trading on the foreign exchange market. To do this, they use analysis based on technical and fundamental indicators, which help them forecast the movement of the currency pair traded. Because real-time currency trading is wholly electronic, execution speeds are extremely fast, allowing the trader to quickly buy and sell currencies in an attempt to cut losses and take profit.

High volatility, high risk and the potential for significant losses are a reality with forex trading. Because of this, the ability to access information in real-time, or ensure that buying and selling occur without any significant lag time, is of utmost importance to traders. Decisions can only have the intended result if based on accurate and data.

On the forex market, the largest market in the world, traders buy and sell various currencies around the globe. Forex trading involves the purchase and sale of currency pairs. Currency pairs are the national currencies from two countries coupled for trading on the FX marketplace. Both currencies will have exchange rates on which the trade will have its position basis.

The calculation for the rates of exchange between foreign currency pairs is as a factor of the base currency. A typical currency pair listing may appear as, EUR/USD 1.3045. In this example, the euro (EUR) is the base currency, and the U.S. dollar (USD) is the quote currency. 

When traders purchase a currency pair on the forex market, they buy the base currency while simultaneously selling the quoted currency. When traders sell a currency pair, they receive the quoted money and sell the base currency.

Trades pass through a broker where an individual holds a standard, mini, or micro account. Standard forex accounts require prior funding and order lots of 100,000 base units, Mini accounts allow 10,000 unit trades, and Micro accounts allow 1,000 base unit trades. Also, Standard accounts enter orders in multiples of 100,000, whereas mini account holders place them in multiples of 10,000. Micro accounts may use any multiple of 1,000.

The forex market is open for 24 hours, five days per week. Buying and selling among traders scattered across different time zones around the globe can complicate forex trading. However, it can also provide an excellent opportunity for traders because real-time forex trading can occur at any time of day, fitting into any schedule.

Many forex brokerages make real-time forex trading charts available online to clients. Sites that offer free trading charts may not guarantee the information is accurate or timely. Use these websites with caution, and before taking action in the market, ensure that the table you are using is a real-time forex trading chart.

(To learn more about forex trading, read Investopedia's Forex Walkthrough.)