With more than $5 trillion traded each day, the Forex market is considered as the world's largest and most dynamic financial market, attracting trading from new traders wishing to maximise trading opportunities and high-power international institutions that rely on the markets for their business activities.
What is the forex market?
Forex or FX means "foreign exchange". Most people are familiar with foreign exchange when travelling abroad and need to change their country's currency for the local currency. Trading online Forex is different as the majority of trading is speculative, which is defined by the fact that traders do not take physical ownership f currencies, but instead traders are trading in contracts for difference to generate profits from the future movements of the markets.
Trading Forex online is an over-the-counter (or OTC) market which makes trading between two parties possible without dealing through a financial exchange and allows you to access the markets virtually from anywhere in the world.
What is traded?
When trading Forex, you will trade currencies that are always pairs. These pairs are split into categories known as Majors like Euro/Dollar (EUR /USD), the British Pound/Dollar (GBP/ USD), Japanese Yen/Dollar (JPY/USD) and the Swiss Franc/Dollar (CHF/USD), the most liquid and most traded pair is EUR/USD. Minors such as Euro/Australian Dollar (EUR/AUD) and Exotics such as Swiss Franc/Polish Zloty (CFH/PLN).
There are hundreds of instruments and pairs you can trade at Yadix that includes segments like Forex, Indices, Metals and Oil so that you can maximise the latest market trends in any of these instruments.
Who can trade?
The truth is anyone can trade Forex, all you need is a broker account and as low as $100 to start taking advantage of this dynamic market.
As there are always two parties involved in any one trade (Trader and counterparty), the Yadix advantage is that prices are feed and executed to a range of 15+ tier 1 liquidity banks who act as the counterparty to your trades, this is known as Straight Through Processing (STP) or Direct Market Access (DMA) and offers all traders a no conflict trading environment and the confidence to make money. When comparing to a market maker who makes profits on the spreads and the losses of their clients, the STP/DMA model is the most transparent and issue free brokerage model.
When to trade
As the Forex market is open 24 hours a day from Monday to Friday, and is split into three session US, European and Asian, you can trade at anytime. This gives traders the opportunity to take advantage of profitable trading possibilities regardless of their location in the world and their trading strategies.
Where can I trade?
As Forex trading has evolved along with the online world we are used to in the modern day, you can trade directly from a range of devices, online from anywhere. There are platforms for Desktop, laptop, Android phones or tablets and Apple phones or tablets to allow you to trade from your office, home or even when you're not in front of your computer directly from your phone or tablet.
How do I make a profit?
Profit can be made on any order, on any instrument trading in any direction. For example, recent weaknesses in Oil prices have delivered great opportunities for selling Oil. At the same time, strength in the US dollar means that there are perfect possibilities to sell EUR/USD to profit from both strong trends.
Due to the flexibility that the Forex market offers, the liquidity depth and volatility you can make money from buying or selling any currency pair. For example, in the European session the EUR/USD is gaining so you buy, just a few hours later positive economic data is released as the US session opens to give strength to the dollar, you sell the Euro vs. Dollar to make money. You can see that the market movements allow you to buy and sell the same pair just a few hours apart and make money on both positions.
What influences Forex prices?
The Forex markets, just like any other market in the world is influenced by supply and demand and is driven by several factors that are easily accessible for everyone. Naturally, the currency of any country or region is determined by the economic status, outlook or issues as well as localised and international news. By using the Yadix economic calendar, traders can plan their trading according to upcoming news that is categorised into High, Medium and Low impact. Another factor is news, for example US presidential elections, conflicts, and influential business news, each one delivers opportunity.
A Unique Market
Trading Forex offers many unique advantages when comparing to traditional trading:
Easy access
You can start trading with a low first deposit and access trading platforms using your desktop, laptop and even your mobile phone or tablet. Account funding is easy as you can choose from many localised deposit options like debit or credit card, e-wallets and even bank wire transfers. You can create your account, make your deposit and start trading in just a few minutes, the entire process is done online.Liquidity
Due to the high volumes traded on the Forex markets leads to high liquidity provided by the world's leading banking institutions. High liquidity means traders can always find prices to buy or sell any currency pairs at any time. Higher Leverage
Leverage is a tool that allows you to borrow money from your broker that allows you to trader higher volumes with smaller invested capital and generate higher returns on you investment. Most other markets such as stocks offer only 1:2 leverage, however with Forex markets you can choose a range of leverage from 1:1 to 1:500. Leverage increases your opportunities to maximise profits from successful trades. It's important to remember that higher leverage also increases risk, in fact most professional traders choose to trade with 1:100 leverage in order to better manage risk. Opportunities
Due to the high volumes traded in Forex, the market direction can change at any time and this creates opportunity to identify new trends to make quick and unlimited profits. Trading volatile markets like Forex can be risky and a good risk management plan is always advisable. Spreads
As Yadix is an STP broker, where market execution is used to submit all of our client's trades directly to the inter-bank markets with no conflicts of interest between broker and client, our profits are made on the spreads or ECN commission which is dependable on the account type you choose to trade on. Spread only accounts are when the core spreads we receive from our 15+ liquidity banks are "marked-up" to give us profits. On ECN accounts, client's trade using the core bank spreads, without any mark up to give Expert Advisors and professional traders more favourable trading conditions,. Instead a flat ECN commission is charged to generate profits for the broker. Unlike market makers, Yadix does not make money when a client losses. Imagine that it's in your brokers interests that you lose money, how can you trust your broker? The STP/ECN model is the most transparent broker model that offers no-conflicts of interests trading for your peace-of-mind.Controllable Risk
There are many trading tools available on the Yadix trading platforms to allow you to make risk controllable. You can set a stop loss that allows you to identify the maximum loss of any trade and set the position to be stopped should your limit be exceeded. The same useful logic is available to lock in your trading profits. Take profits can be set from the platform to ensure that should your order reach the take profit level you have set, the order will be closed at your profit target. Both options allow you more freedom when trading as you can be assured that the stop loss or take profit will be triggered even if you are not even logged in to your trading account.
Is Forex trading risky?
Just like any investment, Forex trading is risky and could lead to a loss of invested capital. However, the unrivalled risk management controls available to everyone to manage risk efficiently and effectively.
It is advised that you start with an investment that is comfortable and not to risk more than you can afford to lose. Chose carefully the trade sizes you decide to enter to manage properly your margin and avoid unnecessary loses.
What is a pip?
A pip (percentage in point) is the minimum change in quoted forex prices. Most pairs are quoted in four decimal points, one pip on EUR/USD for example can be identified as 0.0001. Currency pairs such as USD/JPY the pip is identified as 0.01. As a five digit broker, traders can take advantage of point movements for greater accuracy, for example on EUR/USD 0.00001, one point is 1/10th of the value of a pip.
What is "the spread"?
When trading a currency pair, there are two prices the Bid and the Ask, the difference between these two prices are what is known as "the spread". A trader buys on the Ask price and sells on the Bid price. Example EUR/USD Bid price is 1.31125 and the ask is 1.31126, the spread is 0.1 pips and is essentially the cost of making that trade.
When a trader buys a pair they are buying the base currency and selling the counter and when selling a pair, the trader sells the base and buys the counter.
What is a‘long’ and ‘short’ trade?
As you can trade in either direction of the markets (buy or sell), Long is defined as a buy order and short is defined as a sell order. Remember you can also hedge your orders with zero margin requirements and even hedge orders if you have negative free margin, which many traders use as a great risk management tool.
How do I start trading?
Getting started is a simple process, all you need to do is register a live account from the Yadix website, login to the client area and make a deposit. We accept 15+ different payment methods that are easy to use according to the region you live in. We can accept deposits through major credit and debit cards, popular e-wallets and bank wire transfers. After your account is funded you are ready to start trading.
Should you have any difficulties, your personal account manager can assist you. They will be able to offer help you select the best account types and help you with the most suitable promotions and offers to help you start trading forex in the best way.