Trading Basics You Should Know

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Foreign exchange FX or forex trading is when you buy and sell foreign currencies currency trading markets try to make a profit. This webpage outlines the risks of this strategy. Before you put your money on the line, you should find out how forex markets and trading works, do extensive research currency trading markets consider getting professional financial advice.

Foreign exchange trading is when you attempt to generate a profit by speculating on the value of one currency compared to another. Foreign currencies can be traded because the value of a currency will fluctuate, or its exchange rate value will change, when compared to other currencies. FX trading is normally conducted through 'margin trading', where a small collateral deposit worth a percentage of a total trade's value, is required to trade. Foreign exchange trading is complex and risky.

Even the most skilled and experienced traders have difficulty predicting movements in currencies. Trading in international currencies requires a huge amount of knowledge, currency trading markets and monitoring. Most FX trading products are highly leveraged. This means you only have to pay a fraction for example, 0. He paid a 0. If John had not closed currency trading markets this trade currency trading markets the value of the AUD against USD continued to fall, he may have had to meet a margin call and lose many times his original investment.

If John had arranged a guaranteed stop loss order with his provider, this would have cost him a fee. The guaranteed stop loss order would have closed him out of the trade at a certain price to prevent further losses if the market moved against him.

This may have capped his losses but would not have covered them entirely. Forex trading raises the stakes further by letting you trade with borrowed money leveragebut you'll be responsible for all losses, which may exceed your initial investment. Margin FX trading is one of the riskiest investments you can make. Different types of foreign exchange trading products involve different risks so currency trading markets should read the product disclosure statement carefully before investing.

You should also check that the forex provider you are thinking of dealing with has an Australian Financial Services Licence. Find out what an AFS Licence means. If the provider does not have an AFS licence, make sure it is regulated by currency trading markets appropriate overseas authority trading with these providers may not give you recourse to Australian currency trading markets.

See check an investment company or scheme for more details. Read ASIC media release warning about a fake forex website. To successfully trade you will need to have good knowledge of foreign exchange, leverage, volatility and the conditions of each country whose currency you are trading. You will also need to predict how these conditions affect the relative value of those currencies. This is extremely difficult as so many factors come into play, including politics, economics and market confidence, and these are unexpected, random events.

There are also many software programs available for this type of trading. They may claim their programs can let you know when to make trades. Remember that no person or program can ever accurately predict movements in foreign currencies. Be wary of companies that say if you use a currency trading markets product you will get access to better exchange rates or easy money. They may let you trial their trading platform for free at first, but this is usually just a teaser for you to buy the software or platform.

You should also do your own research and consider getting separate financial advice from a licensed adviser. Foreign exchange trading is very risky even if you have years of skill and experience in this type of trading. You will need plenty of spare money if you have to cover a margin call.

What is currency trading markets trading? Risks of foreign exchange trading Dealing with FX providers Is forex trading right for you? Warning Foreign exchange trading is complex and risky. Warning Forex trading raises the stakes further by letting currency trading markets trade currency trading markets borrowed money leveragebut you'll be responsible for all losses, which may exceed your initial investment.

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Trade CFDs on over spot and forward currency trading pairs, including major, minor and exotic FX pairs. Find out more in our introduction to forex. View the spreads, margins and trading hours for some of the most popularly traded FX pairs. Our platform combines innovative trading tools with an intuitive interface.

Native mobile apps for iPad, iPhone and Android give you access to your account wherever you are. Learn more about our platform. Switch to CMC Markets. Try Countdowns for fast-paced, fixed-odds trading on popular financial markets. Just decide whether the price of a product will be above or below the current price at the end of a range of short-term timeframes, from just 30 seconds.

Our free education tools and webinars are designed to help improve your trading skills. This data is provided for general information only and may not be current.

Please refer to the product overview area of our trading platform for real-time information on the spreads, margin rates, commission as applicable and trading hours of a particular product. At the end of each trading day 5pm New York time , positions held in your account may be subject to a holding cost.

The holding cost can be positive or negative depending on the direction of your position and the applicable holding rate. Historical holding rates, expressed as an annual percentage rate, are visible on our platform within the overview section of each product.

This website uses cookies. By continuing to use this website you agree to this. Digital trading examples Digital trading strategy What is digital trading? Learn forex trading Forex trading examples Forex technical indicators Using leverage in forex trading Benefits of forex trading What is forex?

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Create an account Trade over 9. Open a demo CFD account. Home Products What you can trade Forex. Forex trading Trade CFDs on over spot and forward currency trading pairs, including major, minor and exotic FX pairs.

Over FX pairs. Apply now to start trading. Open a live account Losses can exceed your deposits. Open a demo account. Forex CFD instrument details View the spreads, margins and trading hours for some of the most popularly traded FX pairs.

Demo account Try CFD trading with virtual funds in a risk-free environment. Sign up for free. Live account Access our full range of products, trading tools and features. Countdowns Try Countdowns for fast-paced, fixed-odds trading on popular financial markets.

You may also be interested in: Range of markets Choose from thousands of forex, indices, commodities, shares and treasuries. Learn Our free education tools and webinars are designed to help improve your trading skills. CFD trading can result in losses that exceed your deposits.

Ensure you understand the risks.