Providing access to the world's largest and most liquid market with raw spreads that start from 0.1 pips on EUR/USD.
Operating 24 hours a day for five days a week, the foreign exchange market is the most extensive and most fluid market globally, with a daily volume exceeding $5 trillion, surpassing any exchange-based market.
Foreign exchange trading involves speculating on the movement of one currency against another currency in a currency pair. This means predicting whether one currency will appreciate or depreciate in value relative to the other currency. Currencies are always traded in pairs, such as the Euro against the US Dollar (EUR/USD).
Unlike stocks or commodities, foreign exchange trading does not occur on exchanges but rather involves direct transactions between two parties in an over-the-counter (OTC) market. The forex market is governed by a worldwide network of banks, situated in four major forex trading centers spanning different time zones: London, New York, Sydney, and Tokyo. Since there is no central location, forex trading remains open 24 hours a day.
In the forex market, the spread refers to the difference between the buy and sell prices quoted for a currency pair. When initiating a forex trade, you will be presented with two prices - the buy price and the sell price. If you intend to go long or buy, you will trade at the buy price which is usually slightly above the market price. Conversely, if you intend to go short or sell, you will trade at the sell price which is typically slightly below the market price.
Forex trading involves the use of lots, which are batches of currency utilized to standardize forex trades. As forex market fluctuations tend to be minor, lots are generally quite substantial; a standard lot equals 100,000 units of the base currency. Therefore, since individual traders may not have 100,000 units of their currency to allocate on each trade, the majority of forex trading is done with leverage.
Leverage in forex trading allows traders to gain access to larger amounts of currency without having to pay the entire value of the trade upfront. This is accomplished by placing a small deposit, known as margin, instead. When a leveraged position is closed, the profit or loss is calculated based on the full size of the trade, rather than just the amount of margin deposited.