The FOREX, acronym for Fo r eign Ex change , may be a decentralized financial market where a day are exchanged so as currency for a complete of quite 4,000 billion dollars . The meeting between supply and demand for every currency traded in terms of another, gives rise to a continuing change within the price of a given currency pair .

What is an fx currency pair ? Eur / Usd – euro / US dollar – for instance is a currency pair and is the most traded in the world. The currency that’s in the denominator of the pair, in our example USD , tells us how much money is required to acquire a unit of currency present in the numerator (in our example EURO ).

Let’s take a practical example : Let’s suppose that the price of the euro / dollar , at a given moment, is at 1.10, which implies that it takes 1.10 US dollars to buy one euro .

With Forex Trading we mean that online speculative trading activity of currency pairs, like EURO / DOLLAR, to form a profit .

Make forex trading is one of the most preferred modes of small and large online investors to build on their capital, going to speculate on the price movement of the currency pairs.

Also remember that everything you’ll learn in the course of this guide, you can immediately put it into practice with a virtual account (that of eToro for example) . what’s it ? this is often a demo account that allows you to test learning and strategies without paying even 1 euro. But we’ll come back to talk about this later.

Before going ahead, we bring to your attention the entire list containing the best brokers to do forex trading , or the intermediary platforms (indispensable tools) to put this activity into practice.

About Forex Trading

What is Forex?

The forex, acronym of Forex Exchange , is a liquid market, where they are exchanged in terms of others: for these reasons it is called the currency market .

The exchange in platforms known as the high leverage broker, of one currency in terms of another, gives rise to a commercial negotiation and, because of this, the price of pairs (currency pairs) is in constant variation.

Speculation arises from the fluctuation of the prices of forex currencies . Forex Trading consists of speculative activity on the price of currency pairs whose price is constantly changing.

In the event that our intuition is correct, our investment in Forex will be profitable, we will be able to collect and we will have increased the consistency of our capital.

All the best brokers operating in this market offer you the possibility to trade all major currencies. On FP Markets you will find them all – as you can also see with a free demo account – to open here and to use freely for 2 weeks.

Main features of Forex Trading :

When the FX market opens : 24 / 24H – 6 days a week
Who regulates it : ESMA
How to invest : CFD trading
Best FX trading platform : EasyMarkets ( EasyMarkets Review )
How to get started : Visit Top Brokers

How the Forex market works

The first peculiarity of Forex compared to other financial markets is that it is possible to invest 24 hours a day , since the main markets on which you can run your investment are in different time zones , which end up covering the whole day. and of the night:

  • Frankfurt : opens at 09:00 and closes at 16:00
  • London : opens at 10am and closes at 5pm
  • New York : opens at 1pm and closes at 9pm
  • Sydney : opens at 10pm and closes at 6am
  • Tokyo : opens at 00:00 and closes at 08:00

With these times it becomes possible to go and operate practically throughout the day, being able to earn in the morning, in the afternoon, at night. This is the first of the great advantages that forex trading UK offers: you are not tied to specific hours, but you can trade whenever you want, adapting the analysis and the investment to your daily routine.

Forex Trading Advantages

There are many advantages for those who want to invest in Forex compared to those offered by other markets.

  1. The costs are very low : you will not have to pay large commissions to banks and intermediaries – each trade costs very few cents;
  2. You can operate when you want : the Forex market is practically always open and therefore you can organize your investments at the times you prefer;
  3. You can differentiate the capital , even if you have little money available;
  4. There is the possibility of using financial leverage , even in a very high ratio, covering only margin investments.

These are no small advantages that no other instrument is able to offer on the market, especially to small investors. All advantages that you can also find in HYCM Markets – one of the best brokers recommended by us – which allows you to invest without commissions and with all the access you need to the markets.

Leverage in forex trading

Leverage in forex trading

Let’s talk first of the financial leverage , or the tool that allows you to operate on the margin even on Forex.

The financial leverage has a not too intuitive operation for those who are beginners, but nothing that cannot be easily explained with an example:

  • Imagine having invested in EUR / USD when they were 1.1000, and having invested 10,000 euros in long , or betting on the rise of the Euro;
  • During the day, EUR / USD moved between a high of 1.1180 and a low of 1.1080. This means that at most during the day we reached a peak of -0.002 per euro invested, or in our case 0.002 x 10,000 = 20 euro;
  • It is particularly unreasonable to immobilize 10,000 euros in the face of maximum losses of 20 euros during the day, which is why the brokers have all decided to offer the tool of financial leverage ;
  • With financial leverage you will have to cover with your capital only the “negative changes in value” with respect to your position, and therefore in this case, 20 euros to actually have 10,000 invested;
  • The leverage has actually been standardized in the following operation: each broker offers a maximum leverage ratio, which can range from 1: 2 to 1: 300. The report indicates how many times we can invest the paid-in capital. With 1,000 euros invested in 1: 2 we will have 2,000 euros available on the platform to invest; with 1: 300, 300,000 euros to invest.

It is a very practical and convenient tool, which allows you to:

  1. Multiplying gains and losses , which is very important especially when we are going to bet on currency pairs that are relatively stable, such as EUR / USD and many others, leverage helps to move a market that would otherwise be flat;
  2. With more capital available, we can go to differentiate our portfolio in a more appropriate way.

Leverage is a tool to be mastered to be effectively successful in forex trading with not huge capital , a tool that is certainly available to those who are small investors and want to play with the big ones.

If you want to touch what is offered to you by leverage, you can also do it here with a good demo account – choose the leverage you prefer and start trading immediately!

Forex Trading with microlots

The second important tool is the micro-lot, that is a lot of 100,000 basic units, which is the minimum that can be negotiated on the market, which is divided by brokers into 10/100/1000/1000 and sometimes even 1000000 shares to allow everyone to invest even minimum sums.

If microlots did not exist, it would not be possible for those who do not have large capital to invest to participate in the currency market. All major brokers, such as FP Markets , allow you to operate with microlots, which combined with financial leverage allow you to operate even with investments of only 100 euros.

How can you do with FP Markets , a high quality broker that allows you to invest in the entire Forex market.

How to trade in Forex Online

You can invest in forex by changing one currency in terms of another, keep it and wait for its exchange to become favorable for you, and then exchange it, thus obtaining a profit .

The procedure procedure mentioned above is really complex, and not at all easy. If the basic concept is clear to you, it will be even easier for you to replicate it in online forex trading.

To trade on Forex , we will therefore have to buy the currencies that interest us, and we can do it directly online, having a good forex broker and a reliable trading platform .

Choosing a good broker among the best Forex brokers can guarantee you:

  1. Transparency and adherence to MiFID rules : that is those of the European framework for financial intermediaries; if the broker you have identified does not have EU authorizations, better stay away from them;
  2. Low commissions : unfortunately there are several operators on the market who charge too high commissions, and who end up eating all the earnings we have achieved;
  3. Adequate technical platforms : such as MetaTrader or however professional platforms, which allow you to invest with conditional orders and advanced trading strategies;
  4. Financial leverage : if you have reduced capital available, and by reduced on Forex we mean capitals below hundreds of thousands of euros, financial leverage becomes a fundamental tool for investing profitably on Forex.

Conclusions: is it worth investing in Forex? Yes or no?

Yes . Forex is a market that offers very high potential returns and that you will have to learn to exploit if you want to become a successful investor. Forex trading is a world where you can thrive with your capital – follow the free guide and insights our specialists have prepared for you.

The currency market awaits you – start by opening a free demo to learn. We therefore conclude our complete guide by answering the most common questions that are generally asked on the subject.

Is forex difficult?

No . Once you understand the key concepts, you just need to start taking the online forex course .

Is investing in forex really worth it?

Yes . Otherwise it would make no sense to have opened our site, which we remember being active since 2012. Forex trading is only convenient if you  use the right tools and learn the basics of technical analysis .

How to become a forex trader?

To start your forex trader career you start from the basics, that is, by opening a  forex trading demo account (it’s free). With this you can start getting used to forex right away without investing real money.

Is forex trading suitable for everyone?

Absolutely yes . Anyone can start trading forex, but you must first understand the risks and possible returns. Understanding the concepts and putting them into practice.

Is forex a scam?

The forex market is not a scam but there are many chameleon systems that, using the notoriety of this market, try to scam people.