FOREX.com is a trading platform that lets users trade foreign currency pairs. This is a relatively rare asset class, one which even few full service trading platforms offer. While using FOREX.com feels somewhat like trading on a legacy system, this is a good platform for trading foreign currencies. Before diving into the world of foreign currency trading, work with a financial advisor who can help you decide how much of your portfolio should be devoted to this and how best to pursue this type of investing.
Services & Feature: What Does FOREX Offer?
As a threshold matter, it is important to understand that trading foreign currencies (forex) is a highly volatile, very risky section of the market. That doesn’t mean that you should necessarily avoid it. However, you should reserve this for the speculative section of your portfolio.
Foreign currency is traded in pairs. For example, a USD/GBP currency swap means trading U.S. dollars against British pounds, while EUR/JPY trades the euro against the Japanese yen. As a result, when you trade currencies you will often have to exchange the base currency in your account (for example, U.S. dollars) into one of the currencies in the swap.
FOREX.com is a feature-limited trading platform. It allows you to trade foreign currency only with almost 100 different currency pairs on offer (although it also offers a Gold/USD pair). As a result, you cannot trade any other financial product on this platform, including mainstream assets such as equities, funds and bonds. Unless you have an extremely specific (and very risky) investment strategy you will need another investment platform in addition to FOREX.com.
Investors with FOREX.com have three different platforms to choose from. As with many trading services, the desktop platform offers the most sophisticated set of options. It has a truly impressive range of technical indicators to review, all of which can be laid onto customizable charting options that allow you to build information in whatever way suits you. In addition to the desktop platform, traders also have access to web and mobile-based platforms. While the mobile platform offers a feature-limited set of options, FOREX.com’s web platform offers almost as many tools as the desktop version does.
In fact, with the range of technical indicators, customization options and trading tools available, most investors probably won’t notice the difference between the web and platform versions of FOREX.com.
However, while its research options are comprehensive, FOREX.com offers a limited set of complex trading instructions. In this regard it falls short of some of its peers. You can enter basic orders such as stops, limits, take profit and stop loss, however the system lacks the more sophisticated conditional orders that other currency trading platforms sometimes offer. This is a particularly noteworthy omission given how quickly currencies move, and how…