What is Forex?
Foreign Exchange, commonly know as Forex or FX, is the largest and most liquid market in the world with roughly $5 trillion traded on a daily basis. With no set exchange hours, you can trade currencies 24 hours a day, 5 days a week.
Foreign exchange prices move on various factors such as Geo-Political events, economic stimulus from central banks and speculation on future events. The Foreign Exchange market has a multitude of participants including central banks, hedge funds, multinational corporations and individual investors.
Tips on Forex
- Open 24 hours, 5 days a week
- World's largest market
- Deep liquidity
- Tight spreads
- No hidden charges
- Fast execution
Tips on Forex
- 1 CFD FX lot has a notional value of 100,000
- Currencies are always traded in pairs
- The first currency in a pair is known as the 'base currency'
- The second currency in the pair is known as the 'quote currency'
- If you were to trade EURUSD and you bought, you're buying Euros and selling US Dollars.
- If you bought 1 CFD lot of EURUSD at a price of 1.1800, you would be buying 100,000 Euros and selling 118,000 US Dollars.
- If the price of EURUSD moved from 1.1800 to 1.1850, this means you have made 50 pips. After buying 1 CFD Lot, this would result in a profit of $500. However if the price fell to 1.1785, then you have lost 15 pips and made a loss of $150.
- If you were to trade EURGBP and you sold, you're selling Euros and buying Sterling.
- If you sold 1 CFD lot of EURGBP at price of 0.9000, you would be selling 100,000 Euros and buying 90,000 Sterling.
- If the price of EURGBP moved to 0.9025, this is a change of 25 pips and a loss of £250. However if the price fell to 0.8940, then you would make a profit of £600.
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