Forex real time trading is the newest form of commodities and forex trading – but it has been around longer than you think.  As soon as Wall Street and other major exchanges began computerizing, it started becoming possible for traders to reduce the times it took for trades to be executed and to settle, until it is now possible to place virtual trades that effectively settle immediately.

In the old days, before forex real time trading, you would phone up your broker and instruct him (probably a man in a waistcoat and top hat, one would hope) to purchase a certain commodity on your behalf.  He would write up the instruction and phone it in, fax it, or even courier it, to a brokerage or dealing house at an exchange.  There it would sit for the remainder of the day, to be executed the next day by a trader.  Once it was executed it would then go into a clearing cycle, where it would take up to fifteen days for the shares or whatever it was you bought to be registered as your property.

These days it happens in the blink of an eye, and all of the execution and settling happens in the background, often many days after the trade has been completely closed off.  The impact of this is zero, because of how forward contracts on forex work.  In forex commodity trading you are buying or selling the right to buy or sell a commodity, so you always get the price it was when you placed the instruction.

Advantages of Real Time Trading

The advantages of trading in real time are obvious.  Because trades are effectively executed instantly, you almost always get the exact price you were planning on paying.  If you use stop loss and take profit orders, as you always must, you can place trades with millisecond accuracy, and reduce the risk of the price changing between when you wanted to buy the currency pair and when the trade becomes effective.

Of course, the settlement of the trades does not happen instantly – rather the price is ‘locked in’ by buying a contract on that price, so you pay what you see regardless of future moves in the price.

The Dangers of Real Time Trading

As the speed of markets has increased to near-instantaneity, so volumes have increased.  Sophisticated trading robots execute thousands of trades a minute, and hang on to each trade for less than a second.  This puts the individual investor at a disadvantage, because no person can think as fast as a computer working on a sophisticated algorithm.  That is why you need to remove all emotions from trading, and trade using only proven and well-thought out trading strategies.