Forex trading is the act of simultaneously buying one currency while selling another, primarily for the purpose of speculation.
Speculate on currencies by buying or selling the exchange rate of one country's currency against another with the aim of making a profit.
It is easy to place your first forex trade with City Index. Find out how you can open an account today in three easy steps.
Spread betting, CFD trading and forex trading are leveraged products which can result in losses greater than your initial deposit.
Forex trading enables you to speculate and potentially profit from the future direction of currencies by buying or selling the exchange rate of one currency against another.
Forex – also referred to as foreign exchange and FX – is the world’s largest market with an average turnover in excess of US$4 trillion per day. Currency values rise (appreciate) and fall (depreciate) against each other due to a number of factors, including international trade or investment flows, to economic or political conditions. This is what makes trading forex so interesting and exciting – high market liquidity means that prices can change rapidly in response to news and short-term events, creating multiple trading opportunities for retail forex traders.
Some of the key factors that influence forex prices are:
The common goal of forex traders is to profit from these changes in the value of one currency against another by actively speculating on which way forex prices are likely to turn in the future.
Unlike most financial markets, the over-the-counter (OTC) forex 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.
your losses are magnified in exactly the same way as your gains if the market moves against
you and can result in losses exceeding your initial outlay. Please ensure you fully understand the risks involved.
Spread betting, CFDs and Forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
*Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
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