Trading Forex
Unlike most financial markets, the OTC (over-the-counter) foreign exchange market has no physical location or central exchange and trades 24-hours a day through a global network of businesses, banks and individuals. This means that currency prices are constantly fluctuating in value against each other, offering multiple trading opportunities.
At City Index, you can speculate on the future direction of currencies, taking either a long or short position depending on whether you think the currency’s value will go up or down. The below video shows you how to trade the EUR/USD currency pair with CFDs.
FX Trading steps
1. Choose a currency pair
Decide which currency pair you wish to trade. With over 65 currency pairs to choose from, picking a trading opportunity that’s right for you is important.
City Index’s technical and fundamental research tools can help you spot currency trading opportunities to suit your trading style. We recommend that you take your time to understand the amount of price volatility associated with the currency pair to help manage your risk.
2. Decide on the type of FX trade
There are three ways to trade forex with City Index Spread Betting, CFD or Forex Trading. Each has its particular stake size:
In spread betting you trade pounds per point movement
In CFD trading you trade a quantity of CFDs in the unit of the base currency (currency on the left). For example if you trade GBP / USD your stake would be in Pounds, while in USD / JPY your stake would be in US Dollars
In Forex trading you buy lots, in the unit of the base currency (currency on the left)
For example if you trade GBP / USD your stake would be in Pounds, while in USD / JPY your stake would be in US Dollars (the minimum stake size is 1000)