Trading contracts for difference (CFDs) on the foreign exchange (forex) market can be as rewarding as it is complex.
What is forex trading, if not a highly lucrative and everchanging method of potentially profiting from price movements? But with such a rapidly altering market, you need efficient and accurate ways of monitoring and controlling your trades.
In order to achieve the greatest chance of profit, you need to ensure you are both aware of your trades’ performances, and equipped with the tools to sufficiently manage them.
One of the best ways of doing this, is to incorporate trading alerts in your daily trading routine. Not only will this be some defence against the unpredictability of the forex market, but it will also provide you with the tools to remain in full control of your entire trading experience.
Read on to find out what CFD trading alerts are, and why they are essential for forex trading.
What are trading alerts?
Trading alerts are notifications, set to give you vital information regarding your trades, or direct you to an opportunity for either starting or ending a specific trade, based on current performance.
It cannot be mentioned enough, how unpredictable the nature of forex trading is, so you might think you’d ought to be persistently monitoring your trades 24/7. However, this is not realistically feasible, which means it’s inevitable that you’ll miss some important changes occurring in the market.
This is where the need for trading alerts comes in. This way, you don’t have to be present on your trading platform at every minute of the day, waiting to see how things are developing. Instead, your alerts will notify you of anything that needs your attention, so important moments do not go unmissed – a core component in forex trading.
Along with trading alerts, there are various things that your platform – assuming you choose a suitable one – can notify you of, or complete for you, without the need for 24/7 monitoring.
Automatic orders are a great way of maintaining control over your trades, even when you’re not present to make any actions.
Currency pairs can rise and fall at any moment, and this will determine whether you’ve made a profit or a loss. Therefore, it’s important you open and close your CFD trades at the right moments. When this cannot be done in person, automatic orders are there to help.
For instance, you can set an automatic buy order, that will open up a position once an asset reaches a certain value (determined by you). Likewise, you can set an automatic sell order, which does the exact same, except it automatically closes the position.
This is highly important, as it can mean your CFD trade is closed once it reaches an optimal position of profit, removing the risk of it falling back down before you can manually close it. Also, it means you can close your position if you start incurring losses, to mitigate the damage.
Be aware, although you may have a set value you want the trade to open or close at, the rapid fluctuations of the forex market might result in the value being slightly either side.
Technical indicators can also contribute towards your trading alerts, as they can be used to analyse trends and patterns in the forex market, and give you notifications to better manage your trades.
Predicting price movements is key for trading forex CFDs, and yet it can be very hard to do. However, technical indicators, such as the Simple Moving Average (SMA), can give you a more accurate idea – based off calculations – of where currency prices might move next.
This information and data from your trading platform might inform you of certain trends in potential trades that you’d be wise to take advantage of, or maybe, the predicted movement of your current trade that warrants a position closing.
With your trading alerts being informed by accurate technical indicators, you’ll have a much better chance of making successful trades.
One last aspect of trading platforms that might determine the type of alerts you get, is the economic calendar.
This essential tool is an accumulation of all the events which are set to have an impact on the forex market. For instance, you might see news of changes in inflation, economic surveys, political events, and so much more on this calendar — all with an expected impact measurement tied to them.
This can allow you to receive alerts informing you of upcoming events which are set to affect your trades, as well as any opportunities to, for instance, buy a currency pair that is set to increase in value due to an external factor’s oncoming impact.
This important tool can be crucial in your ability to execute strategic and profitable trades.
If you haven’t already incorporated trading alerts into your CFD forex trading experience, you should no longer have any question of their importance, and the wide range of benefits they bring to your trading journey.