Far from being an easy way of getting rich, forex trading requires a great deal of knowledge and skill to deliver success. Many traders seek out the expertise of qualified, experienced brokers to help them identify the currency pairs that could yield substantial profits. This is because the forex market is hugely volatile, and nobody can predict exactly which currencies will increase in value and which will head in the opposite direction.

Nevertheless, several inherent benefits continue to attract traders to the market: forex trading is low-cost, suitable for a variety of different trading styles and provides high levels of liquidity. Further, while volatility can pose significant risks, it also offers sizeable rewards – it all depends on the positions that traders take up before big currency swings occur.

The year ahead certainly promises several geopolitical events that could have a huge impact on the forex space. The World Finance Forex Awards 2020 showcase the businesses that have displayed the foresight to pre-empt these developments and guide their customers to a more profitable future.

Open for business
Forex platforms have always understood that setting foot in the world of trading for the first time isn’t easy. For years, many have made an effort to reach out to potential traders by highlighting the ease of entering the field. For example, forex trading needn’t be a huge drain on an individual’s time: many people start engaging with the forex market on a small scale, using any profit to supplement their income, rather than becoming a trader full-time.

As new digital solutions enter the forex market, traders will have to remember that technology cannot do all the hard work for them

For many forex firms, there is as much of an emphasis on education as there is on having a well-developed trading platform: companies usually offer guides and even live classes to help new traders get off to a good start. Although there is some terminology that may prove unfamiliar – ‘pips’, for example – many forex brokers include glossaries to help cut through the jargon.

Coming up with effective marketing strategies is another way in which brokers are expanding their customer bases. Numerous forex firms publish blogs, which not only provide educational materials but also serve a promotional purpose. Similarly, social media has proven to be an effective method of increasing awareness of the forex market.

Another reason forex is attracting more traders is due to the openness of the market. Unlike securities, forex trading is global and invariably accessible – while stock markets close, forex’s international nature means there is always a market open somewhere. As a result, global currency trading reached $6.6trn per day late last year, according to the Bank for International Settlements.

Simple solutions
Perhaps more than any other financial sector, the forex market owes much of its recent success to technological developments. The internet has made it much easier for traders to receive updates on currency developments, and mobile applications mean trades can be conducted immediately at the touch of a button. In fact, technology has meant forex trading is sometimes even simpler than that.

Increasingly, traders are using software to automate their trades. One of the most commonly used platforms is MetaTrader 4, which allows individuals to employ algorithms that open and close trades when bespoke parameters are met. Excitingly, MetaTrader 5 is due for release later this year and will offer new features to traders, including the ability to view trading history in the form of positions, with all deals related to a certain position grouped for easy comparison. Those who trade using multiple monitors will also benefit from the ability to detach financial symbol charts from the main trading terminal window, giving them more flexibility in terms of how they follow the market.

However, technology also has its pitfalls. One of the tips forex traders are often told is to avoid ‘trading the news’ – this means eschewing the temptation to indulge in knee-jerk trades because of geopolitical developments. Of course, today’s 24-hour news cycle doesn’t help matters here, so forex brokers must encourage traders to take a long-term view.

Although forex brokers shouldn’t trade the news, they must certainly keep an eye on it

Throughout 2020, as new digital solutions enter the forex market, traders will have to remember that technology cannot do all the hard work for them. While there are useful tools for identifying trading opportunities, performing technical analysis and following market developments, they are no substitute for experience and a willingness to learn.

A shift in focus
Although forex brokers shouldn’t trade the news, they must certainly keep an eye on it. Geopolitical developments can help traders determine which currency pairs to trade and which ones to avoid. Looking at the year ahead, there is much uncertainty for forex traders to ponder.

The ongoing trade dispute between the US and China will continue to have a huge impact on the values of various currencies. Perhaps most notably, forex speculators may want to steer clear of the Chinese yuan, unless signs of a resolution start to emerge. The COVID-19 pandemic will also affect global economic development throughout the year and is likely to send traders scrambling to safe-haven currencies such as the Japanese yen and the US dollar. The forex market will be watching intently to assess the extent of the economic damage and whether there are any signs of the virus abating.

Similarly, the US presidential election in November will surely influence the forex market. Traders interested in US dollar markets will need to examine the probable Democratic nominee before assessing the likelihood of that individual beating incumbent Donald Trump at the ballot box. Of course, with so many unknowns in this particular market, traders could simply choose to look elsewhere.

Many forex platforms will offer support to traders who are seeking to explore new markets. They will have a firm grasp of the events that are likely to affect currency pairs in the year ahead, while stressing that nobody can say with certainty what the future holds. It’s for this reason that the best forex firms are keen to emphasise the inherent risks of playing the market. For example, the ability of individuals to employ leverage – essentially borrowed funds – to complete their trades offers the promise of higher profits, but can also significantly amplify losses.

As we move further into 2020, the forex market will undoubtedly experience more unexpected twists and turns, providing traders with new opportunities to make – or lose – money. The most reliable, efficient and honest forex firms will support their customers without being didactic. The World Finance Forex Awards 2020 celebrate the organisations that make it as easy as possible to enter the exciting world of forex – for new and experienced traders alike.

World Finance Forex Awards 2020

Best Cryptocurrency Broker
101investing

Best Partnership Programme
ACY Securities

Best Trading Conditions
BDSwiss

Best Forex CFD Provider
ETFinance

Best Liquidity Solution
FXSpotStream

Best Trading Experience
FXTM

Most Transparent Broker
HFTrading

Best Mobile Trading App
HYCM

Best Trading Platform
Libertex Group

Best ECN Broker
OctaFX

Best Islamic FX Account
OctaFX

Best Forex Education Provider
T1Markets

Best FX Broker, Australasia
XM

Best FX Broker, Europe
XM