Category: Uncategorized
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The Bid, Ask and Spread
All forex quotes are quoted with two prices: the bid and ask. In general, the bid is lower than the ask price. What is “Bid”? The bid is the price at which your broker is willing to buy the base currency in exchange for the quote currency. This means the bid is the best available price at which you (the trader) can sell to the market. If you…
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How to Read a Forex Quote
Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is that, in every foreign exchange transaction, you are simultaneously buying one currency and selling another. How do you know which currency you are buying and which you are selling? Excellent question! This is where the concepts of base and…
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How does forex trading work?
As a forex trader, you are speculating on whether one currency will rise or fall in price against another currency. So “forex trading” can be defined as the process of speculating on currency prices to try and make a profit. The value of a currency is influenced by economic, political, geopolitical events, and trade and financial…
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How to Make Money Trading Forex
The forex (also known as FX or foreign exchange) market refers to the global marketplace where banks, institutions, and individuals speculate on the exchange rate between fiat currencies. The forex market is the largest financial market in the world.
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Forex CFD
A contract for difference (“CFD”) is a financial derivative. Derivative products track the market price of an underlying asset so that traders can speculate on whether the price will rise or fall. The price of a CFD is “derived” from the underlying asset’s price.A CFD is a contract, typically between a CFD provider and a trader,…
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Forex Spread Bet
Spread betting is a derivative product, which means you don’t take ownership of the underlying asset but speculate on whichever direction you think its price will move up or down A forex spread bet enables you to speculate on the future price direction of a currency pair.A currency pair’s price being used on the spread bet is…
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Retail Forex
There is a secondary OTC market that provides a way for retail (“poorer”) traders to participate in the forex market. Access is granted by so-called “forex trading providers“. Forex trading providers trade in the primary OTC market on your behalf. They find the best available prices and then add a “markup” before displaying the prices…
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Spot FX
The spot FX market is an “off-exchange” market, also known as an over-the-counter (“OTC”) market. The off-exchange forex market is a large, growing, and liquid financial market that operates 24 hours a day. It is not a market in the traditional sense because there is no central trading location or “exchange”. In an OTC market, a customer trades directly…
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Currency ETFs
A currency ETF offers exposure to a single currency or basket of currencies. Currency ETFs allow ordinary individuals to gain exposure to the forex market through a managed fund without the burdens of placing individual trades. Currency ETFs can be used to speculate on forex, diversify a portfolio, or hedge against currency risks. Here’s a list…
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Currency Options
An “option” is a financial instrument that gives the buyer the right or the option, but not the obligation, to buy or sell an asset at a specified price on the option’s expiration date.If a trader “sold” an option, then he or she would be obliged to buy or sell an asset at a specific…