Currency trading

Currency trading

The forex market is the largest and most liquid financial market in the world. Since the gold standard was abandoned in 1971, exchange rates started floating and currency trading therefore became possible for banks and large financial institutions.

Since 1990, forex trading has become within everyone's reach, thanks to the development of the Internet and the arrival of new online brokerage firms. Nowadays, individual traders such as you and me can speculate on currency movements through a broker and a trading platform. These forex brokers offer lot sizes that are suitable for small investors. However, speculating on exchange rates is not for all traders due to leverage-related risks and a lack of experience.

Unlike stock markets, currency trading is not centralized on a regulated marketplace. There are therefore no clearing houses as is the case with traditional exchanges, forex participants trade with each other through an electronic interbank network, in OTC mode (Over-The-Counter).

Here are some articles on the advantages of currency trading and how it works.

Types of brokers

Types of brokers: ECN - STP - No Dealing Desk

There are several different types of brokers. Each one offers different trading conditions. ECN, STP and MTF broker offer direct access to the interbank market, while market makers act as the counterparty to clients' trades.

NDD DD trading platforms

How do I choose a broker: ECN/STP or Market Maker?

Is an ECN/STP broker more reliable than a Market Maker broker? This article will demonstrate that it is more important to choose a broker that is located and regulated in a country with strict regulations and that guarantee your funds.

A book B book

What is the A Book and B Book that forex brokers use?

Forex trading is different from investing in shares or futures, because a broker can choose to trade against his clients. This system used by "Dealing Desk" Market Maker brokers is known as "B booking".

Forex and CFD broker comparison

Forex and CFD broker comparison

Compare forex brokers' trading terms and conditions. Spreads and commissions, types of trading orders, regulation, etc.

Forex market players

Forex market players

Forex traders include banks, international companies, investment funds, hedge funds and individual investors. Most forex players speculate, while the others manage the exchange risk related to exports/imports of goods and services.

Forex broker regulatory agencies

Forex broker regulatory agencies

The forex market is an OTC market. Broker regulation authorities are therefore necessary to protect traders and impose rules of good conduct for brokers. Traders must check whether or not their broker is licensed in their country.

History of forex trading

The history of forex trading

The currency exchange market has changed considerably throughout history. Once reserved for banks, this market, commonly referred to as the forex (foreign exchange) market, has been available to individual investors since the 1990s.

History of forex trading

Leverage in forex trading

Forex brokers lend money to traders so that they can increase their investisements on the foreign exchange market. Leverage therefore essentially consists in borrowing money from a broker to increase one's return on investment. However, this also means that a trader increases his risk of losing more money.

Main forex currencies

The main forex currencies

Forex transaction volumes are mainly concentrated in five currencies: the dollar (USD), the euro (EUR), the yen (JPY), the British pound (GBP) and the Swiss franc (CHF).

Forex swap

Forex swaps and rollovers

Transactions that are done with cash (spot forex) with foreign exchange brokers are subject to positive or negative interest charges (currency swaps) if the positions are held at the time of the rollover at 22:00 (GMT time).

Advantages of forex trading

The advantages of forex trading

The forex market offers many advantages over other financial markets. It is open 24h/day and allows traders to speculate with leverage and very low transaction costs.

Forex trading hours

Forex trading hours

It is possible to trade the forex 24h/day, from Sunday evening to Friday evening. However, the volatility of the currency exchange market depends on the time of day. Trading volumes increase when the main financial marketplaces are open.

Forex glossary

Forex glossary

Every trader needs to understand the language used in finance. Here is a glossary of important technical terms which relate to derivatives trading (forex and contracts for difference) and the world of finance in general.

CFDs (contracts for difference)

Contracts for difference

CFDs are derivative products that are traded on the OTC (over the counter) market. CFD trading allows traders to invest in a broad range of financial products (currencies, stocks/shares, indices, precious metals and commodities) through a trading platform.

CFDs (contracts for difference)

The underlying assets of CFDs

Contracts For Difference allow traders to easily invest in shares, indices, commodities and currency pairs.

CFDs (contracts for difference)

CFDs: DMA or Market Maker?

There are two types of execution methods for CFDs: DMA (Direct Market Access) CFDs and Market Maker CFDs.

How to start trading quickly

How to start trading quickly (crash course)

If you're new to forex trading, you might want to start playing with a forex trading platform and testing out your strategies with a free demo account. Learn the key basics here (how to place an order, etc...).