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    How To Trade Forex

    Uploaded by

    Josephine Cericos
    Individual traders have two main options to get involved in forex trading: through forex contracts for difference (CFDs) or trading forex via a broker. A forex CFD is a contract where the trader agrees to exchange the difference in price of a currency pair from when they open to when they close their position. Trading forex via a broker works similarly to CFD trading, where traders speculate on currency price movements without owning the currencies, and can go long or short on pairs. When trading forex via a broker, traders only have access to currency markets and not other markets.

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    How To Trade Forex

    Uploaded by

    Josephine Cericos
    52 views2 pages
    Individual traders have two main options to get involved in forex trading: through forex contracts for difference (CFDs) or trading forex via a broker. A forex CFD is a contract where the trader agrees to exchange the difference in price of a currency pair from when they open to when they close their position. Trading forex via a broker works similarly to CFD trading, where traders speculate on currency price movements without owning the currencies, and can go long or short on pairs. When trading forex via a broker, traders only have access to currency markets and not other markets.

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    Steps on trading forex

    Original Title

    How to Trade Forex

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    Individual traders have two main options to get involved in forex trading: through forex contracts for difference (CFDs) or trading forex via a broker. A forex CFD is a contract where the trader agrees to exchange the difference in price of a currency pair from when they open to when they close their position. Trading forex via a broker works similarly to CFD trading, where traders speculate on currency price movements without owning the currencies, and can go long or short on pairs. When trading forex via a broker, traders only have access to currency markets and not other markets.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    52 views2 pages

    How To Trade Forex

    Uploaded by

    Josephine Cericos
    Individual traders have two main options to get involved in forex trading: through forex contracts for difference (CFDs) or trading forex via a broker. A forex CFD is a contract where the trader agrees to exchange the difference in price of a currency pair from when they open to when they close their position. Trading forex via a broker works similarly to CFD trading, where traders speculate on currency price movements without owning the currencies, and can go long or short on pairs. When trading forex via a broker, traders only have access to currency markets and not other markets.

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    Decide how you’d like to trade forex

    A lot of forex trading takes place between major banks and financial institutions, which
    buy and sell massive amounts of currency every single day. For individual traders who
    don’t have the means to make billion-dollar forex trades, though, there are two main
    ways to get involved: forex CFDs or trading forex via a broker.

    What is a forex CFD?


    A forex CFD is a contract in which you agree to exchange the difference in price of a
    currency pair from when you open your position to when you close it. Open a long
    position, and if the forex position increases in price you’ll make a profit. If it drops in
    price, you’ll make a loss. Open a short position, and the opposite is true.

    Forex is just one of the markets you can trade using CFDs.

    Forex trading via a broker


    Forex trading via a broker – or sometimes via a bank – works in a broadly
    similar way to CFD trading. You’re speculating on the price movements of
    currency pairs, without actually taking ownership of the currencies
    themselves. If you think a currency pair’s price is headed down, you can go
    short instead of long.

    When you trade forex via a broker, though, you won’t have access to other
    markets.

    Learn how the forex market works


    One of the first things to learn when you want to trade currencies is how the
    forex market operates, which is very different to exchange-based systems
    such as shares or futures.

    Instead of buying and selling currencies on a centralised exchange, forex is


    bought and sold via a network of banks. This is called an over-the-counter, or
    OTC market. It works because those banks act as market makers – offering a
    bid price to buy a particular currency pair, and a quote price to sell a forex
    pair.

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