Real Time Forex Feeds: Critical to Successful Traders

Many years ago, before the rise of the Internet, information wasn’t so freely available and certainly not within seconds of it actually happening. Traders would have to contact their brokers by phone to find out information or they would have to do it from newspapers, once a day. The only way for them to have up to date information all the time was if they were present on the trading floor.

However, since the Forex market does not have a central location from where trading is done, such as an exchange, this was next to impossible. This made day trading for retail traders practically impossible. In fact, the only reason trading is so popular today is due to the internet allowing people to access up to date information second by second through real time Forex feeds.

Real Time Forex Feeds: Charts, News and More

When starting out with Forex trading, one of the first things you will do is download a trading platform. These trading platforms offer charts and other analysis tools as well as, more importantly, accurate price information updated virtually every second through real time Forex feeds.

The charts your software displays are built on these real time Forex feeds as they take the price information and translate it into a graphic representation which forms the chart you are analyzing. Without the benefit of real time Forex feeds you would have to wait for the software to be updated a few times a day or maybe even less.

Additionally, many Forex brokers also provide a news service that is either connected directly to the platform or through separate downloadable software, ensuring that traders are aware of pertinent economic data as it is released. This is also usually achieved through real time Forex news feeds.

The Importance of Real Time Forex Feeds to Day Traders

Without real time Forex feeds, day trading is almost impossible and scalping is completely impossible. Scalping involves taking a few pips profit on a trade that can sometimes last under a few minutes. In this case, traders use extremely small timeframes to trade, namely one minute or five minute charts.

They aren’t interested in the long-term trend of the currency, just the overall daily trend and what movement price is exhibiting at the moment. In fact, one motto many scalpers have is not to stay in a trade for longer than a candle of the time frame they are trading, no matter how small the profit they make is.

While this may seem like a good approach, there is also a high level of risk associated with scalping because it’s easy to lose sight of the bigger picture when you are trading on such small time frames. Additionally, trading on a minute chart makes the market appear so volatile, with apparently no overall direction that you can end up forgetting that you need to make an informed decision.

However, day trading is the preferred method of trading for most retail traders and even though the profit might exceed scalping, it still requires the up-to-date information provided by real time Forex feeds. This is because, like scalping, trades are very short and the volatility of the market could lead to you incurring a loss.

The Forex market tends to be highly unpredictable which means that as soon as your profit target is hit or the market appears to be stalling, you need to close your position and take what profits you can. Without real time Forex feeds there is no way for you to know what is happening in the market, let alone be able to react in due time.

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