ویتریول

Currency trading is also known as FX trading or Forex trading. Provides an opportunity to speculate on price fluctuations in the FX market. The purpose of FX trading is to predict whether the value of one currency will strengthen or weaken relative to another. A forex trader is faced with several trading opportunities every day due to the daily news release.

FX traders take advantage of this by welcoming market news and then trading based on suspicious market sentiment. FX is an industry term that is abbreviated to Forex and is commonly used instead of Forex. However, Forex also stands for foreign currency. Read more about Forex News Trading Strategy.

How do Forex trades work
Forex is always traded in pairs - for example GBP / USD (sterling against US Dollars). You guess about the increase or decrease in the price of one country's currency against another country's currency, and you take a position based on that. Looking at the GBP / USD currency pair, the first currency (GBP) is known as the "base currency" and the second currency (USD) is known as the "mutual currency".

When trading in Forex, you guess about the rise or fall of the base currency against the cross-currency. So in Pounds / US Dollars If you think the pound is rising against the US dollar, you are buying (buying) the currency pair for a long time. On the other hand, if you think the pound is depreciating against the US dollar (or the dollar is appreciating against the pound), you are selling the currency pair short.

Find out some currency pairs traded in the Forex market by reading our in-depth guide.

What is leverage in Forex trading?
When trading, Forex leverage allows traders to control more risk with less money. The difference between the total value of the trade and the margin required by the trader is usually "borrowed" from the Forex broker. Traders can usually get more leverage in Forex than in other financial instruments, meaning they can control more money with less deposits.

Leverage availability is one of the reasons why many people are interested in FX trading through Forex spread betting or CFD trading account. CMC Markets offers competitive margin rates for Forex instruments starting at 3.3% or 1: 30 leverage. This leverage is higher than the 20% margin rate (5: 1 leverage) available for stock instruments. Read about other differences between Forex and stocks here.

What is traded on Forex
The spread in Forex trading is the difference between the buying and selling price of a FX currency pair. When you trade Forex pairs, you are offered a "buy" price that is often higher than the market price and a "sell" price that is often lower than the market price. The difference between the two prices is called the "buy offer" or "buy and sell" spread.

Forex trades offer some of the lowest spreads of all our financial instruments, starting at 0.7 points, compared to the minimum spread of 37 points for Bitcoin or 3 points for crude oil. See a complete list of our current Forex spreads and margins.

How to trade in the FX market
There are many ways to trade in the Forex market, all of which follow the aforementioned principle of buying and selling currency at the same time. If you think a FX "base currency" is rising relative to the "mutual currency" price, you may want to "buy" that currency pair. If you believe that the opposite will happen and the market will fall, you may want to "shorten" (sell) the currency pair.

The Forex market has historically been traded through a Forex broker. However, with the advent of online trading companies, you can take a stand on Forex price changes with a spread id or CFD. Both betting and CFD trading accounts offer a form of FX derivative trading in which you do not own the underlying asset, but rather speculate about its price changes. Derivatives trading can provide opportunities for leveraged Forex trading. Because this can be a risky process, forex traders often choose forex risk hedging strategies to offset any currency risk and subsequent losses.

Open a Forex account

To open a Forex account, you must first find a reliable broker, then fill in the required information and open a real Forex account for your trades. By opening Forex accounts you can trade Forex and invest in this market