Forex Trading Tips for Beginners
LONDON, June 25, 2012 /PRNewswire/ --
Trade across 37 global currency pairs with a City Index forex trading account and benefit from access to a range of professional Advantage trading platforms.
In the following guide, we show you how you can potentially profit from small movements in the forex market, with some of the tightest spreads available to retail forex traders through City Index.
Introduction to Forex Trading
Trading on future price movements of global currency markets can open up multiple trading opportunities for investors.
Foreign exchange, also known as 'forex' and 'fx', is the exchange of one currency for another at an agreed exchange price on the over-the-counter (OCO) market.
As the world's most traded market, it has an average turnover in excess of US $4 trillion per day.
How to Trade Forex
Trading forex is the act of simultaneously buying one currency while selling another, primarily for the purpose of speculation.
When trading a currency pair, for example EUR/USD (Euro/US dollar), you are speculating on the first currency in that pair, against the second currency. In this example, that would be whether the euro will rise or fall against the US dollar.
If you think the value of the Euro will fall or 'depreciate' against the US dollar, you would go short and sell.
If you think the value of the Euro will rise or 'appreciate' against the US dollar, you would go long and buy.
In the event you are correct and the market moves in favour of your position, you will profit.
However, if the market moves against your position, you will incur a loss.
Through a City Index forex trading account, you can take advantage of Capped Variable Spreads (CVS).
These spreads are some of the tightest available to retail forex traders - giving you the edge over other traders in the market.
The Capped Variable Spreads feature enables City Index to place a 'cap' or 'ceiling' on the maximum amount that a forex spread can go to, for example, the spread on the GBP/USD pair is capped at 5 pips.
This means that when trading GBP/USD, if the underlying market spread moves to 8 pips, the spread will remain fixed at 5 pips on the City Index trading platform until the underlying markets spread retraces back below the capped five-pip limit.
Start Trading Forex
To start trading forex across a range of trading platforms - including mobile - you can apply for a forex trading account through the City Index website.
Read More Forex Trading Tips
If you found this article helpful, you may want to read more just like this. You can access a range of forex trading tips, guides and articles through the Forex Trading section of the City Index website.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk for details.