Canadian forex trading is regulated by the CSA, and selecting a registered broker is important. The Canadian dollar’s value is related to its exported goods, and traders should consider fundamental and technical analysis. Reports on economic indicators are important, and technical analysis can be used in conjunction. All participants should be aware of the risks involved.
Canadian forex trading is regulated by the Canadian Securities Administrators (CSA). CSA regulated brokers are the best choice for online trading. The Canadian dollar is referred to as a commodity currency. The value of the Canadian dollar is closely related to the value of its exported goods. Canada is a major exporter of oil, aluminum and other precious metals.
Selecting a registered forex broker should be your first consideration. The CSA protects investors from fraudulent and unfair practices and offers a comprehensive website to assist investors interested in Canadian forex trading. A reputable forex broker should provide educational resources, forex software, and reasonable commission rates. The Canadian Investor Protection Fund (CIPF) provides insurance for Canadian investment accounts.
Several forex platforms are available for Canadian forex trading. Most retail brokers make money from the spread, which is the difference between the bid and ask prices of the quoted pair. Electronic Communications Networks (ECN) provide clients with direct access to other forex participants. ECNs offer tighter spreads but charge a fixed commission per trade.
Canadian forex trading might involve trading the Canadian dollar against another currency. The foreign exchange market is what determines the values of international currencies. The trader could choose to trade a variety of currency pairs, which may or may not include the Canadian dollar. The main purpose of the foreign exchange market is to assist in foreign trade and investment. Exchange rate speculation has become a popular investment tool.
Canadian dollar traders generally consider the value of Canadian exported commodities. When the price of oil rises, the currency usually increases in value. This type of commodity correlation can serve as a valuable trading tool. Many other political and economic factors also need to be considered before trading. Canadian forex trading can be successful if due diligence is given to fundamental and technical analysis of the currency markets.
Fundamental analysis is the study of economic conditions within each country. Economic indicators generally come in the form of reports and policies. These reports are announced periodically. One of the major factors in the value of currency is interest rates. Other ratios to consider are gross domestic product, retail sales, and employment statistics.
These reports can indicate whether a nation’s economy is advancing or declining. Many reports are scheduled on a monthly basis. The investor should pay particular attention to the reports regarding the forex pairs to be traded. Fundamental analysis should be used in conjunction with technical analysis.
Technical analysis, or chart reading, is a popular method of currency forecasting. Technical studies could include chart patterns, support and resistance, and many technical indicators. Supporters of technical analysis believe that all relevant information can be viewed on the price chart. By combining this type of analysis with fundamental studies, the investor may be able to gain an edge in predicting future price.
Canadian forex trading is very similar to other international currency exchanges. The main difference is in the broker selection. Canadian forex brokers should be regulated by the CSA. All participants in currency trading should be familiar with the risk involved.
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