The foreign exchange (FX) market is the largest and the most liquid market in the world, with average daily trading volume of about $4trilion. As a fully decentralised market place, with no actual physical location, it operates over-the-counter (OTC) via a network of banks, financial institutions, hedging funds, investment management firms, broker and dealers. This structure enables the huge liquidity and trading 24h hours a day with minor gaps on weekends, meaning exchange rates can change virtually at any time, reacting to the latest market developments. This in turn means that you do not have to wait for an exchange to open in order to trade.
 As of 2010, source Bank for International Settlements
 The FX trading day starts in the Western Pacific, moves through New Zealand and Australia, followed by Tokyo, Hong Kong, Singapore, through to Middle East; later markets open in Europe and then in the US. While the trading comes to an end in the US the Asia-Pacific area readies itself for the next business day.
The concept is straightforward as it revolves around the notion of buying and selling money. Trading forex involves exchanging one currency for another one. That is why currencies are always traded in pairs, also known as crosses. By buying one currency you are simultaneously selling the other one and vice versa.
And as with any other commodity or asset, you would buy, if you expect the first currency in pair to appreciate. By doing it, you are concurrently selling the second one in pair. If you think the opposite is the case, i.e. the first currency in pair will depreciate, you sell it and simultaneously buy the second one.
If you trade for example GBPUSD, aka Cable, you trade the Sterling vs US Dollar. We provide you with a two-way quote, the bid and the offer, which represent the exchange rate for selling or buying GBP respectively. The bid price tells you how much you would get in USD, if you sold the GBP; the offer price shows the value in USD if you were to buy the Pound.
You can decide between mini and standard contracts. Our contract sizes are defined in the information window for the product. You can also decide on the leverage you want to use. This gives you the control over the margin you want to use and the extent your profits (but also your losses) are multiplied. You are in command of your trades.
FX trading is by its nature a risky business as its main purpose is to measure, price, accept and manage the risk. In that respect it does not differ much from trading other financial products. Your success will critically depend on your ability to evaluate and manage those risks effectively. For that reason it is crucial to only trade with funds that you can afford to lose and maintain trading discipline.
You can, however, be in charge of the degree of risk you are willing to take. By applying stop losses to your positions you can restrict potential losses. By varying the margin, you gain control over the scale of the leverage that is applied to your position as well.
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