Foreign Exchange for sort forex. Trade the most popular currency pairs with limited risk and low cost.
What is the forex market?
Get in on the action of the most traded market in the world..
Foreign exchange (also known as forex or FX) refers to the global, over-the-counter market (OTC) where traders, investors, institutions and banks, exchange, speculate on, buy and sell world currencies.
Trading is conducted over the ‘interbank market’, an online channel through which currencies are traded 24 hours a day, five days a week. Forex is one of the largest financial markets, with an estimated global daily turnover of more than US$5 trillion..
Understanding Currency Pairs
All transactions made on the forex market involve the simultaneous purchasing and selling of two currencies. These are called ‘currency pairs’, and include a base currency and a quote currency.
How to start trading with a forex broker
A broker such as FXTM acts an intermediary between the traders and the liquidity providers. It facilitates in the execution of clients’ orders.
VISUALISING CURRENCY TRADES
A ‘position’ is the term used to describe a trade in progress. A long position means a trader has bought a currency expecting its value to increase. Once the trader sells that currency back to the market (ideally for a higher price than he paid for it), his long position is said to be ‘closed’ and the trade is complete.
A short position refers to a trader who sells a currency expecting its value to decrease, and plans to buy it back at a lower price. A short position is ‘closed’ once the trader buys back the asset (ideally for less than he sold it for).
For example, if the currency pair EUR/USD was trading at 1.0916/1.0918, then an investor looking to open a long position on the euro would purchase 1 EUR for 1.0918 USD. The trader will then hold on to the euro in the hopes that it will appreciate, selling it back to the market at a profit once its price has increased.
An investor going short on the EUR would sell 1 EUR for 1.0916 USD. This trader expects the euro to depreciate, and plans to buy it back at a lower rate if it does..