Online Forex Trading
Foreign Exchange trading, also known as Forex or FX trading, has gained enormous popularity in recent years among layman individuals due to the growth of online brokers and the technological development of online trading platforms. With high liquidity, non-stop opening hours 5 days a week, and great opportunities, it is no wonder that the forex market is the world’s most traded market with a daily trading volume of $5 trillion USD.
Open a FX Trading Account with AvaTrade and enjoy the benefits of an internationally regulated broker!
The FX market is also liquid due to several factors. One of the unique features of this market is that it is used by a wide variety of market participants for entirely different reasons. This includes brokers, speculators, forex dealers, central banks, retail traders and many more.
Consider this: large volumes of currencies are traded in the markets due to the necessity of currency exchange required in international trade. Large institutions may need to settle accounts in a cross-border manner quite frequently. As an example, an American company, looking to pay its German division, will need to pay them in euros. This means a forex transaction will be completed, and will likely influence the EUR/USD pair, even if only slightly.
Meanwhile, daily interbank settlements are also a mover of these markets as broker-dealers, such as banks, are amongst the biggest participants in the forex market. Since these dealers interact with each other, this market is referred to as the interbank market. Large corporations, including exporters and importers, will also use the FX market to hedge currency exposure in order to prevent losses due to the fluctuating value of currencies.
Finally, there are large and small speculators simply looking to profit off the price movements in the currencies market, which, of course, is where you come into the picture. With all of these cross-currents, the forex markets offer unique trading opportunities, and it is easy to see why this type of trading has become so popular with both new and professional investors worldwide.
What is Forex Trading?
The Basic Concept
When trading Forex, you are buying one currency by using another. Therefore, the forex trader is trading currency pairs and not each currency individually. Take for example the EURUSD, when buying the pair – it means you are buying EUR using (selling) USD. When selling the pair – it means you are buying USD using (selling) EUR.
In the Forex world the pairing of the currencies is presented as a rate, which reflects the ratio between the values of the two currencies. For instance, the rate for buying the pair GBPUSD is 1.50514, i.e. £1 GBP = $1.50514 USD.
Forex Pairs Groups
The FX pairs are divided into three main groups – majors, minors and exotic pairs. The main difference between the pairs is their liquidity which is a result of the trading volume of these pair. E.g., the major currency pairs are the most traded pairs and each include the USD and another currency, while the most traded minor pairs include one of the three major non-USD currencies (The Euro, the UK Pound and the Japanese Yen).
How to trade forex with AvaTrade
Forex Trading Platforms
AvaTrade offers a selection of trading platforms, for both automated and manual trading, with unique features and tools like expert advisors for MT4 to optimize your trading experience. Whether you are interested to trade on your own, or copy the trades of others, our selection caters to all traders, where you are sure to find the one for you. We also offer the option to open a demo account on each platform, where you can practice trading on your platform of choice and master your trading skills, before you start trading in the real market with your own money. In addition to spot trades, our platform allows FX options trading.
Leverage is given by the broker to enable traders to hold trading positions that are larger than what one’s own capital would otherwise allow.
How to Calculate the Cost of a FX Trading Position?
When a trader opens a position at AvaTrade, he is not charged any other commissions beside the spread. The spread is the difference between the buy and sell price which is counted in pips – the fourth digit after the dot. For example if the buy price of EURUSD is 1.1123 and the sell price is 1.1120, then the spread is 3 pips. The spread charged for a position opened by a trader is the spread multiplied by the size of the position.
Range of Markets
AvaTrade provides its traders with the ability to trade over +50 Forex pairs, including all the major currency pairs, minors and exotics.Trading Bitcoin and other digital currencies is also available to AvaTrade’s clients.
For more information regarding leverage and spreads for all forex pairs offered by AvaTrade, please take a look at our Trading Conditions & Charges.
What Forex Trading Training Can I Expect at AvaTrade?
While the forex markets do offer many potentially profitable trading opportunities, the ability to profit is greatly determined by the knowledge and skills that the trader possesses. Whether you consider yourself a forex investor, speculator, or are simply looking to diversify your portfolio, AvaTrade offers a comprehensive educational centre to get our clients started on the right foot. Being an award-winning forex broker isn’t an accident, it’s something we strive for at AvaTrade by offering effective educational resources, information and assistance to our valued clients. Check out our trading for beginners section now!
To start, we provide our clients, both new and advanced, with the ability to enter the currency markets seamlessly. Everything you need to trade forex can be found under the AvaTrade umbrella.
But we don’t stop there. The FX trading training that we offer at AvaTrade is something that we pride ourselves on. All of the best traders were once beginners, but they found the education necessary to learn how to navigate the markets right here at AvaTrade. We know that we have simplified the learning curve for many traders with our vast selection of educational materials.
We offer our traders access to exclusive trading videos that cover a wide range of topics including advanced trading tools, a MetaTrader 4 and MetaTrader 5 guides, forex strategies and much more. You can also join our webinars or get the AvaTrade eBook that covers the important aspects of trading forex online.
To top it off, we give our traders first-class access to our information portal, Sharp Trader, which is also packed with a choice of powerful trading resources and tools. At AvaTrade, we don’t expect you to jump right in, and that is why we have made a demo trading account available to all our traders.
In this way, you can familiarise yourself with the platform, and practice your trading skills and strategies, without the risk of losing your trading capital. With so many resources available, we continue to educate and offer value as one of the best forex brokers for traders worldwide.
Still having doubts? Take a look at the Avatrade Reviews by our clients!