PRN: A Beginners Guide to Currency Spread Betting
A Beginners Guide to Currency Spread Betting [31-January-2012] LONDON, January 31, 2012 /PRNewswire/ -- Also known as Forex or FX for short, foreign exchange trading is one of the most widely traded markets in the world.
A Beginners Guide to Currency Spread Betting
LONDON, January 31, 2012 /PRNewswire/ --
Also known as Forex or FX for short, foreign exchange trading is one of the most widely traded markets in the world. However, currency spread betting allows traders to control a much larger position than their deposit would normally allow in the underlying market. City Index provides a beginner's guide to the benefits and dangers of spread betting currencies.
Wide Choice of Currency Pairs
GBP/USD, EUR/USD and USD/JPY are the most popular currency pairs, and spread betting clients can trade these forex pairs with competitive daily rolling spreads, with EUR/USD at 1 point and GBP/USD at 2 points. There are dozens more major, minor and exotic currencies to be traded, including the Swiss franc, Australian dollars, Canadian dollars and many more.
Multiple Influences on Movement
Forex trades are based on the exchange rate between two currencies, such as EUR/USD. This exchange rate will then move as investors gauge a range of constantly changing factors from economic data, political decisions, social unrest and even natural disasters. As a result FX traders, particularly short term traders, tend to base their currency trades in reaction to significant events in the belief that they will have a pronounced impact on the market.
Go Short or Go Long
Because foreign exchange can be a volatile market and all trades are leveraged, trading currencies requires careful risk management and a considered trading strategy. Your positions can be managed efficiently using stop losses and limit orders to help minimise losses and lock in profits at predetermined levels set by you.
It is also important to outline a profit target and know exactly how much you are prepared to lose before you place the spread bet. By creating a carefully considered strategy before you start trading, your key decisions are already made, leaving you free to follow the market movements and react to them as they happen.
Learn more about foreign exchange spread betting with City Index at:
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
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