Foreign Exchange Trading

The nature of our global economy mandates an exchange of capital between nations and economic zones. When an American purchases a Toyota, a Japanese car, the US Dollars the American provides must be converted to Japanese currency- the Yen or JPY. Billions of transactions like these occur each day, creating the largest market in the world. Nearly $3 trillion of capital is exchanged in the foreign exchange market each day- only $30 billion worth of transactions occur in all the American equity markets combined.

Economic and political events affect the relationship between currencies. For example, if the United States is perceived to have an increasing economic strength against another economy, the USD will increase against that economy’s currency. These fluctuations in value between currency pairs can occur in a steady trend line over months or can be drastic, moving many cents in one afternoon as a result of a single economic or political event.

Individuals are able to participate in global Forex [Foreign Exchange] trading as day traders by speculating on the movement between currency pairs. In order to participate in global Forex Trading, an individual must choose a currency pair. All trades are relative to two different currencies. For example, the GBP/USD is a commonly traded pair. If a trader believes that the GBP [British Pound] will gain strength against the USD [US Dollar] he will purchase the GBP/USD. If a trader believes the GBP will weaken against the USD, he will sell the GBP/USD.

A trader profits from global Forex trading when the currencies fluctuate as the trader predicted. Because of the leverage they utilize [up to 400:1], significant amounts of money can be made or lost off of small movements. With $250 a trader can open one standard lot. If a trader accurately predicts a 1 penny movement, they will make $1,000 or a 400% return off of their initial $250.

The Forex market is the OTC [Over the Counter] Spot global exchange market. The spot nature of Forex allows traders to take advantage of the foreign exchange market’s tremendous liquidity. FX Trading’s entirely electronic trading system provides traders instant execution, allowing them to immediately enter and exit the market as they choose.

FX Trading offers commission free Forex trading. Traders pay no additional broker or trade fees. The only fee that a trader must pay is the bid/ask spread [the difference between the bid and ask prices]. FX Trading offers industry leading spreads to those wishing to practice global Forex trading. Depending upon initial investment and trade volume, we’ll offer you either a 2 or 3 pip spread on the major USD pairs. Whatever spread you’re granted, it will remain constant- even during news releases. If you don’t initially qualify for the 2 pip spread, don’t worry. FX Trading provides multiple ways to achieve the reduced bid/ask spread. Contact Us to inquire about any current Forex promotions.

FX Trading offers a demo Forex trading account. You’ll have all the features of our live trading accounts, but with $50,000 of practice funds. To practice foreign exchange trading, Register for our Forex Demo Account.

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