CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

At FXTM, we are committed to ensuring our clients are kept up-to-date on the latest products, state-of-the-art trading tools, platforms and accounts.

For those just getting started, we have created a comprehensive Beginners Guide to introduce you to forex terminology, answer common FAQs and, most importantly, we have kept things simple.

Looking for more in-depth information on forex terminology? Head over to ourglossary page.

Foreign exchange (also known as forex or FX) refers to the global, over-the-counter market (OTC) where traders, investors, institutions and banks, exchange speculate on, buy and sell world currencies.

Trading is conducted over the interbank market, an online channel through which currencies are traded 24 hours a day, five days a week. Forex is one of the largest trading markets, with a global daily turnover estimated to exceed US$5 trillion.

Forex trading is the act of buying or selling currencies. Banks, central banks, corporations, institutional investors and individual traders exchange foreign currency for a variety of reasons, including balancing the markets, facilitating international trade and tourism, or making a profit.

Currency is traded in pairs, in both spot and futures markets. The value of a currency pair is driven by economic, political and environmental factors, such as wars, natural disasters, or national elections.

Brokers act as intermediaries, facilitating trades by providing clients access to the 24-hour interbank

FXTM offers a number of different accounts, each providing services and features tailored to our clients individual trading objectives. Discover the account thats right for you on ouraccount page. New to forex trading? Learn about the markets by opening ademo account page.

All transactions made on the forex market involve the simultaneous purchasing and selling of two currencies.

These are called currency pairs, and include a base currency and a quote currency. The display below shows the forex pair EUR/USD (Euro/US Dollar), one of themost common currency pairsused on the forex market.

The base currency is the first currency that appears in a forex pair. This currency is bought or sold in exchange for the quote currency.

So, based on the example above, it will cost a trader1.0916 USDto buy1 EUR.

Alternatively, a trader could sell1 EURfor1.0916 USD.

The quote currency also referred to as the counter currency is the second currency that appears in a forex pair.

The Ask Price is the price a trader will sell a currency for.

It is given in real-time and will change constantly, driven by market demand, as well as the political and economic factors

that influence the value of individual currencies.

The Bid Price is the price a trader is willing to buy a currency pair at. It is given in real-time and is constantly updated.

A spread is the difference between the ask price and the bid price. In other words, it is the cost of trading.

For example, if the Euro to US dollar is trading with an ask price of 1.0918 and a bid price of 1.0916, then the spread will be the ask price minus the bid price. In this case, 0.0002.

A point in price or pip for short is a measure of the change in a currency pair in the forex market.

The acronym can also stand for percentage in point and price interest point. A pip is used to measure price movements, and it represents a change in a currency pair. Most currency pairs are quoted to five decimal places.

Note:Forex prices are often quoted to four decimal places because their spread differences are typically very small. However, there is no definitive rule when it comes to the number of decimal places used for forex quotes.

On the forex market, trades in currencies are often worth millions, so small bid-ask price differences (i.e. several pips) can soon add up to a significant profit. Of course, such large trading volumes mean a small spread can also equate to significant losses.

Always trade carefully and consider the risks involved.

A position is the term used to describe a trade in progress. Along positionmeans a trader has bought currency expecting the value to increase. Once the trader sells that currency back to the market (ideally for a higher price than he paid), his long position is said to be closed and the trade is complete.

Ashort positionrefers to a trader who sells a currency expecting it to decrease, and plans to buy it back at a lower value. A short position is closed once the trader buys back the asset (ideally for less than he sold it for).

For example, if the currency pair EUR/USD was trading at 1.0916/1.0918, then an investor looking to open a long position on the euro would purchase 1 EUR for 1.0918 USD. The trader will then hold the euro in the hopes that it will appreciate, selling it back to the market at a profit once the price has increased.

An investor going short on EUR would sell 1 EUR for 1.0916 USD. This trader expects the euro to depreciate, and plans to buy it back at a lower rate if it does.

There are seven Major currency pairs on the forex market. Other brackets include Crosses and Exotic currency pairs, which are less commonly traded and all relatively illiquid (i.e., not easily exchanged for cash).

Major pairsare the most commonly traded, and account for nearly 80% of trade volume on the forex market.

These currency pairs could typically have low volatility and high liquidity.

They are associated with stable, well managed economies, are less susceptible to manipulation and have smaller spreads than other pairs.

Cross currency pairs Crosses are pairs that do not include the USD.

Historically, Crosses were converted first into USD and then into the desired currency, but are now offered for direct exchange.

The most commonly traded are derived from Minor currency pairs (eg. EUR/GBP, EUR/JPY, GBP/JPY); they are typically less liquid and more volatile than Major currency pairs.

Exoticsare currencies from emerging or smaller economies, paired with a Major.

Compared to Crosses and Majors, Exotics are much riskier to trade because they are less liquid, more volatile, and more susceptible to manipulation.

They also contain wider spreads, and are more sensitive to sudden shifts in political and financial developments.

Below, weve created a table which showcases several different currency pairs from each bracket, as well as some nicknames which were coined by traders themselves.

A candlestick is a chart, also known as a Japanese Candlestick Chart, and is favoured by traders due to the wide range of information they portray. The chart displays the high, low, opening and closing prices.

A candlestick has three points; open close and the wicks.

The wicks show the high to low range and the real body (wide section) shows investors if the closing price was higher or lower than the opening price.

If the candlestick is filled then the currency pair closed lower than it opened. If the candlestick is hollow, then the closing price is higher than the opening price.

A bar chart shows the opening, close, high and low of the currency prices.

The top of the bar represents the highest paid price and the bottom indicates the lowest traded price for that specific time period.

The actual bar represents the currency pairs overall trading range and the horizontal lines on the sides represent the opening (left) and the closing prices (right).

A bar chart is most commonly used to identify the contraction and expansion of price ranges.

A line chart is easy to understand for forex trading beginners. In a line chart, a line is drawn from one closing price to the next.

When connected, it is easy to identify a general price movement of a currency pair throughout a time period and determine currency patterns.

In this guide, weve briefly covered some of the most important aspects of forex trading, including key terminology, what currency pairs are, how currency pair transactions work, and how investors can profit from positions taken on the forex market.

Take your trading to the next level with ourinstructional videos, articles, webinars and glossary, all available free on theeducationsection of our website.

FXTMs industry-leading educational resources are available in 22 languages, and are tailored to the needs of both experienced and novice traders.

It is essentially the process of buying and selling currencies in order to make a profit. The price of one currency is linked to the price of another currency in a trade, so you will always work with two currencies at a time.

The base currency is the first currency appearing in a currency pair quotation, followed the quote currency.

The difference in price between the currencies is where your profit, or loss sits.

Look for a regulated broker that has at least a 5 year track record. If your broker abides by regulatory rules, then you can be sure that they are legitimate. Once you have an active account you can trade but you will be required to make a deposit to cover the costs of your trades. This is called a margin account.

Fortunately there is an enormous amount of training material available to both new and established traders. The training comes in many formats designed to suit your style of learning. You can attend workshops and seminars, doonline tutorialsand webinars, orread Ebooksand articles. They will all assist you to become a better trader.

Learning about forex trading is the first step any successful trader takes. There are many different types of learning materials available to traders-from beginners to advanced.

There are manyforex tools availableto traders such as margin calculators, pip calculators, profit calculators, economic trading calendars, trading signals and foreign exchange currency converters.

Forex widgetscan help you to enhance your trading experience. Some of the more popular widgets include, Live rates feed, Live Commodities Quotes, Live Indices Quotes, and market update widgets.

We are a leading global broker, committed to providing services tailored to the needs of our clients. As such, FXTM is proud to offer its traders the choice of two of the industrys leading forex trading platforms; MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

These platforms, combined with innovative services such as FXTMs Pivot Point tool andFXTM Invest,as well an award-winning customer support team, ensures FXTM traders have the resources they need to trade with confidence.

You can find out more about our trading platforms, or download MT4 and MT5 from ourtrading platformspage.

Still not trading with a world-leading broker?Sign up today.

FXTM brandis authorized and regulated in various jurisdictions.

ForexTime Limited( is regulated by the Cyprus Securities and Exchange Commission with CIF license number185/12, licensed by the Financial Sector Conduct Authority (FSCA) of South Africa, with FSP No. 46614. The company is also registered with the Financial Conduct Authority of the UK with number 600475.

ForexTime UK Limited( is authorised and regulated by the Financial Conduct Authority with license number 777911.

Exinity Limited( is regulated by the Financial Services Commission of the Republic of Mauritius with an Investment Dealer License bearing license number C113012295.

Risk Warning:CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Regional restrictions:FXTM brand does not provide services to residents of the USA, Japan, Alberta,British Columbia, Quebec, Saskatchewan, Haiti, Suriname, the Democratic Republic of Korea, Puerto Rico, the Occupied Area of Cyprus. Find out more in theRegulationssection of our FAQs.

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