Learn to Trade Forex CFDs

Invest effort into finding them and you will have everything that you need to win in trading CFDs, locating CFD brokers, trading Forex and locating a Forex broker. Currencies trade in pairs, such as euro/US dollar (EUR/USD) or pound sterling/US dollar (GBP/USD). The first currency listed is known as the 'base', and the second reason is the 'variable'. The value of the base currency is constantly 1.

Unlike trading on the stock market, forex trading does not take place on some sort of central exchange. Instead market is an OTC (over-the-counter) market. The main forex trading centres are in London, New York, Tokyo, Singapore together with Sydney. The worldwide distribution these trading centres means that foreign exchange can take place 24-hours per day - the market 'chases this sun'.

Forex trading may be the largest and most liquid market in the world. According to a survey carried out by the Bank with regard to International Settlements (BIS) within 2007, the forex market has a turnover of more than $3 trillion a day.

Which trades forex?

Daily turnover in the forex market comes from two sources: speculation for profit (approximately 95%) and unusual trade (around 5%). The most crucial market participants in currency trading are banks, but currency speculators, companies and other loan companies also account for an important proportion of trading action.

Most traders consentrate on the most liquid foreign exchange pairs, known as 'majors'. More than 85% of daily currency trading involves these major currency pairs.

How to trade forex

A comparatively straightforward way of gaining access to the foreign exchange market is through trading forex CFDs (Contracts for Difference). Forex CFDs let you take advantage of the high volatility seen in the forex market without having to own substantial quantities of the actual currencies.

CFD providers quote a price for a currency pair, and, depending on whether you consider the base currency is set to rise or fall with variable, you buy or sell the bottom currency. For example, if you thought pound sterling would strengthen and that the US dollar was going to weaken, you would buy GBP/USD contracts.

How come trade forex CFDs?

Trading forex CFDs means you don't have to pay for any full value of the underlying currencies you will be trading. Instead you drop a deposit, which, in some cases, means you can trade up to 100 times more as compared to your initial outlay would have bought in actual currency. Because of this shockingly high leverage - and when and also the liquidity and volatility of the forex market - there is significant potential for making huge profits or losses with forex CFDs in a short time, even when there are only very small price moves.
Forex Cfd TradingForex, aka fx, currency trading and currency trading, is the market for trading currencies. Some other benefits include:

- Forex is a 24 hour market, with trading positions that could be opened and closed constantly, and trading online means that your orders are accomplished immediately.

- Foreign exchange has lower costs as compared to other fiscal instruments, as foreign currency trading is commission free, and make high use of gearing as a result of the higher levels of liquidity than in other fiscal markets. For a deposit as low as $500, or 5%, it is possible to trade $100, 000 unit currency lots.