Forex CFDs

In the Forex market, currency exchange trading consists of the purchase or sale between two different currencies. These combinations of currencies are referred to as currency pairs. Exchange rates are the relative price of currency pairs when compared to each other. There are seven major currency pairs, all of which include the US dollar. A Forex CFD is a financial derivative that allows you to speculate on the price movements of these currency pairs without owning the currencies.

• Trade long and short
• Trade 24 hours 5 days per week
• Mitigate currency risk
• Carry trades

A pip stands for ‘percentage in points’ or ‘price in points’. This term was traditionally the smallest price increment of a currency pair; also, it measures the amount of change in the exchange rate for a currency pair, calculated using the last decimal point. For FX majors and minors excluding JPY, a pip is the 4th decimal point (0.0001). Meanwhile, on JPY pairs, a pip is the 2nd decimal point (0.01).

The spread is the difference between the best bid and the best ask quotes of a currency pair, is measured in pips, and affects the cost of entering a trade. (Spread = Best Ask Price – Best Bid Price)

• The bid price is the price you can sell the base currency
• The ask price is the price to buy the base currency
• The base currency is shown on the left of the currency pair. Also, the variable, quote or counter currency, on the right.

EUR/USD is the most widely traded pair so it tends to have the tightest spread. But depending on the region and news flow, USD/JPY is also very popular with day traders, along with EUR/JPY and AUD/JPY.

The tick volume indicator looks very similar to a traditional volume indicator, only tick volume counts the number of bid/ask quotes per bar. Whereas a volume indicator from an exchange represents how many shares or contracts have been traded per bar.

FXTRADING.com offers 45 currency pairs among many other products across commodities, metals, indices and cryptocurrencies. You can also enjoy lightning-fast execution from tier-1 liquidity providers.

Leverage in online Forex trading is a powerful tool provided by your Forex broker that allows you to control a large currency position with a relatively small amount of capital. Trading with Forex CFDs allows you to amplify your potential market exposure, meaning a small price movement can result in a larger profit or loss.

FXTRADING.com offers a Forex demo account and the ability to copy Forex trading for traders who are new and wish to practice or follow more experienced traders before they execute trades on their own.

Margin in online Forex trading refers to the initial capital deposited by a trader into a Forex trading account in order to open and maintain a leveraged Forex CFD position. It acts as collateral for the borrowed funds from your Forex broker to secure your trades on the Forex trading platform. It is crucial to maintain sufficient margin to keep your positions open.