Effective Forex Trading

The Foreign Exchange market, also known as FX or Forex is a decentralised, over-the-counter (OTC) global marketplace where currencies are traded. It is the most liquid market in the world and the largest in terms of trading volume, with a staggering daily turnover that surpasses $5 trillion. The many unique features of the Foreign Exchange, as well as its size and liquidity, make it the most dynamic and competitive financial market, filled with innumerable profitable opportunities for traders all around the world.

How the Forex Market works

The Forex market implies all aspects of buying, selling, or exchanging currencies at present or established prices. It also determines the foreign exchange rate that represents the rate at which one currency will be traded for another.

The currencies are always traded in pairs so their relative value is set by the market price of one currency if paid for with another (E.g. 1 Canadian Dollar is worth X U.S. dollar, Japanese yen, etc.). There are three types of currency pairs: Majors; Minors (also known as crosses) and the Exotic pairs.

Major currency pairs are the most heavily-traded, have the lowest spread and are the most liquid. Their main characteristic is the presence of the U.S. dollar on one side of the pair. The most popular currency pairs from this category are: the EUR/USD (Euro/U.S. dollar), the USD/JPY (U.S. dollar/Japanese yen), and the GBP/USD (British pound/U.S. dollar).

Minor currency pairs include the U.S dollar, but rather shift the focus onto other major currencies, like EUR, the JPY, and the GBP. They are often referred to as euro crosses, yen crosses, and sterling crosses. Some of the most prominent currency pairs from this category are the EUR/GBP (Euro/British pound), the EUR/AUD (Euro/Australian dollar), and the GBP/JPY (British pound/Japanese yen).

Exotic currency pairs are the least traded; hence, they have bigger spreads and are less liquid than the other categories. They are formed from a major currency and a currency from a country with a developing economy. Some examples include the EUR/TRY (Euro/Turkish lira), the JPY/NOK (Japanese yen/Norwegian krone), and the USD/HKD (U.S. dollar/Hong Kong dollar).

Who Trades Forex?

The rise of online retail forex trading has made this financial market accessible to just about anyone with a computer/mobile device and an internet connection. However, bigger percentages in terms of transaction volume fall into certain categories more than they do in others. Here are the main ones:

National central banks typically have control over the money supply and the interest rates of currencies. They hold significant reserves of their domestic currency, as well as that of their trading partners. Decisions that are made by these institutions can have an instant and powerful effect upon the value of a currency.

Professional forex traders are hired by large banks to act as market-makers, by entering/adjusting quotes to buy, sell, execute and clear orders.

International companies play an important role in the forex market. Multinational corporations generally trade smaller amounts of money compared to other participants, but they contribute to the long-term direction of a currency’s exchange rate.

Retail traders & speculators are a constantly-growing proportion of the forex market. This segment is represented by the individuals who trade their own money in order to make a profit. Once you open a forex account, you’ll become part of this category!

Brief Guide on How to Trade Forex

As an individual trader, you can trade forex by opening an account with an online forex broker like TradeLTD.com. You complete the required personal data, fund your account, and you’re good to go. However, a giant market like the Foreign Exchange has a lot of unwritten rules you need to follow.

Trading forex implies buying a currency by selling another currency. In other words, you speculate on the price of one currency against another. In order to get the best out of the speculative nature of this type of trading and maximise your chances of making a profit, consider the following tips:

  • Choose the account type that addresses your needs and level of experience. TradeLTD has five account types capable of satisfying even the most demanding investors.
  • Get familiar with the basic forex terms and concepts. Here is something to get you going.
  • Study the market and the factors that make the prices move. We know that information is essential; therefore, on our platform you can find Daily Market Analysis, finance news, as well as other tools & resources to help you stay informed.
  • Create a trading plan with clear objectives. Planning ahead will help you be disciplined, stay focused, and hopefully get better results.
  • Pick a strategy that suits your style and needs. The internet provides you with hundreds of strategies on how to trade forex, but use the one that corresponds to what you want and aim for.
  • Use trading orders. They have the potential to significantly minimize your loss risks and maximize your chances of gaining profits.
  • Use leverage. At TradeLTD, we offer you a leverage ratio that goes up to 1:200 to boost your chances of achieving the profits of your dreams!
  • Develop a healthy mindset. Forex trading can be extremely difficult. It takes a lot of time, patience, and determination to become successful. Failures are part of the process; instead of seeing them as obstacles, use them as lessons.

Advantages of Trading Forex

The currency market stands out not only for its size and liquidity, but for many other unique advantages too. Some of them are:

  • The ease of access. As we mentioned, the advance of technology made it possible to access the world’s largest financial market with just an internet connection and a digital device. You can trade forex from the comfort of your own home or on the go; wherever you are, whenever you want!
  • The low costs. Compared to other financial instruments, there are no commissions charged, except a small transaction cost known as the spread (the difference between the sell and buy prices). The account minimum depends on the broker, but at TradeLTD, you can begin your forex journey with just as little as $200.
  • The high leverage. The levels of leverage provided in Forex are the highest compared to any other market. Leverage enables you to rapidly increase the size of your account while keeping risk to a minimum.
  • The possibility to trade 24/day. The global market is open 24 hours a day/5 days a week. This flexibility allows you to set your own trading hours and enjoy the market’s volatility at the most convenient time.

Trade Forex effectively with TradeLTD

The broker you trade with has the power to drive you towards profitability or losses. At TradeLTD, we treat our customers with the utmost professionalism and strive to guide them to the highest possible profit levels.

We know that the Forex market is complex and requires a robust and intuitive trading environment – that’s why we designed a secure and modern platform that allows you to turn your dreams into reality.

We provide:

  • Cutting-edge technology & many advanced trading tools.
  • A variety of platforms (MT4 Desktop/iOS/Android; MobileTrade, WebTrader).
  • Five account types with no withdrawal fees, competitive spreads, and leverage levels of 1:200.
  • An outstanding educational centre.
  • Cashback programs on each trade.
  • A round-the-clock professional customer support team (24/5).
  • Security of your personal data and capital (SSL technology, AML Policy).

TradeLTD puts at your disposal all the features you need to reach the best results. Our professional and courteous customer support team will stand by to field your questions throughout the entire process, as well as guide you towards making the most inspired trading decisions.

Simply make a deposit, and let’s start an unforgettable forex trading journey together!