Forex trading is the process of speculating on currency price movements, with the aim of making a profit. Many currency conversions on the forex market are for practical use, and not for creating profit. However, traders can speculate on forex market price movements, with the aim of capitalising on correctly forecasting these movements
Trading forex step-by-step guide
Open a spread betting or CFD trading account. You can open a live or demo account to trade on price movements of forex pairs
Start researching to find the FX pair you want to trade. Use our news and analysis section to keep up-to-date with market news which may impact FX, and our market calendar to keep updated with market-moving events
Based on your research, decide if you want to buy or sell. Is the research you’ve conducted indicating the base currency (the first-named currency in the pair) is likely to weaken or strengthen? Go long and ‘buy’ if you believe it will strengthen, or go short and ‘sell’ if you think it will weaken
Follow your strategy. Before placing a trade, ensure you have followed your strategy which should include risk management. Also, see our tips on building a trading plan
Place your forex trade. As per your strategy, place your forex trade with defined entry and exit points. Don’t forget to use risk management conditions, such as a take-profit or stop-loss order
Close your trade and reflect. By following your trading plan, exit the market at your forecasted limits. Think about how you performed, so that you can improve after each trade you make
Forex trading is the process of speculating on currency price movements, with the aim of making a profit. Many currency conversions on the forex market are for practical use, and not for creating profit. However, traders can speculate on forex market price movements, with the aim of capitalising on correctly forecasting these movements
Trading forex step-by-step guide
Open a spread betting or CFD trading account. You can open a live or demo account to trade on price movements of forex pairs
Start researching to find the FX pair you want to trade. Use our news and analysis section to keep up-to-date with market news which may impact FX, and our market calendar to keep updated with market-moving events
Based on your research, decide if you want to buy or sell. Is the research you’ve conducted indicating the base currency (the first-named currency in the pair) is likely to weaken or strengthen? Go long and ‘buy’ if you believe it will strengthen, or go short and ‘sell’ if you think it will weaken
Follow your strategy. Before placing a trade, ensure you have followed your strategy which should include risk management. Also, see our tips on building a trading plan
Place your forex trade. As per your strategy, place your forex trade with defined entry and exit points. Don’t forget to use risk management conditions, such as a take-profit or stop-loss order
Close your trade and reflect. By following your trading plan, exit the market at your forecasted limits. Think about how you performed, so that you can improve after each trade you make
Forex trading examples
When placing trades on the forex market, you are trading the strength of one currency against another. For example, if you go long and ‘buy’ USD/GBP, you are speculating that the US dollar price will increase, relative to the price of the pound. Alternatively, if you go short and ‘sell’ EUR/AUD, you are speculating that the euro will weaken in comparison to the Australian dollar
Example trades are a useful way to learn the process of forex trading. Our forex trading examples show the opening and closing of a trade position, and how to calculate the accompanied profit associated with the trade
When placing trades on the forex market, you are trading the strength of one currency against another. For example, if you go long and ‘buy’ USD/GBP, you are speculating that the US dollar price will increase, relative to the price of the pound. Alternatively, if you go short and ‘sell’ EUR/AUD, you are speculating that the euro will weaken in comparison to the Australian dollar
Example trades are a useful way to learn the process of forex trading. Our forex trading examples show the opening and closing of a trade position, and how to calculate the accompanied profit associated with the trade
Forex basics
As a forex trading beginner, it’s important to understand the basics of the forex market. These fundamentals will help your understanding of the key aspects of the foreign exchange market and ultimately help you to make informed decisions when currency trading
As a forex trading beginner, it’s important to understand the basics of the forex market. These fundamentals will help your understanding of the key aspects of the foreign exchange market and ultimately help you to make informed decisions when currency trading
The foreign exchange market
Forex, foreign exchange, or simply FX, is the marketplace where companies, banks, individuals and governments exchange currencies. It’s the most actively traded market in the world, with over $5 trillion traded on average per day. When trading currencies on the foreign exchange market, currency pairs are often split into major, minor and exotic (or emerging) currency pairs
The US dollar is considered the most popular currency in the world, and constitutes around 60% of all central bank foreign exchange reserves. So it’s no surprise the US dollar is evident in many of the ‘majors’ (major currency pairs), which make up 75% of all forex market trades. As a beginner, it may be wise to trade the majors, as they’re known to be the most liquid and least volatile of the currency pairs
Forex, foreign exchange, or simply FX, is the marketplace where companies, banks, individuals and governments exchange currencies. It’s the most actively traded market in the world, with over $5 trillion traded on average per day. When trading currencies on the foreign exchange market, currency pairs are often split into major, minor and exotic (or emerging) currency pairs
The US dollar is considered the most popular currency in the world, and constitutes around 60% of all central bank foreign exchange reserves. So it’s no surprise the US dollar is evident in many of the ‘majors’ (major currency pairs), which make up 75% of all forex market trades. As a beginner, it may be wise to trade the majors, as they’re known to be the most liquid and least volatile of the currency pairs
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