1. Basic Tutorial

Why do forex traders go short? As we’ve mentioned previously, one of the distinguishing characteristics of trading spot forex over stocks, for example, is that you can sell currency pairs, without ever having bought or borrowed them. But why do spot forex traders go short in the first place? Trading both rising and falling markets…

Going long and going short When trading spot forex, there is no physical delivery of currencies. Rather, you are taking a position on the price movements made by currency pairs. Since there is no ownership of the underlying asset, you can take both long and short positions, which is one of the characteristics of forex…

What is the spread? As we’ve mentioned before, forex brokers always quote two prices for currency pairs. The bid or sell price and the ask or buy price. The ‘bid/ask spread’, more commonly referred to as just the ‘spread’, is the difference between these two prices. But why is it important? Market liquidity and the…

What are the bid and ask? When trading forex, brokers will always quote you two prices; the bid and ask. This might be confusing if you’re used to other markets, like the stock market, where you’d buy company stock for a specified price. So, what exactly are the bid and ask? Buying and selling The…

What are pips and lots? Pips and lots are an important part of any forex trade. You will need to understand both well before even thinking about entering the market for the first time. So, what exactly are they? Percentage in point (Pip) A pip is the unit of measurement used to register the change…

What affects forex prices? The prices of currency pairs rise and fall, which is essentially how money is made in the forex market. But what exactly drives these changes in price? And, as a trader, how can you take this into account when planning your trades? How does the economy affect a currency? First, it’s…

What are forex pairs? As we’ve mentioned previously, currencies are traded in pairs, meaning you’re always buying one currency while simultaneously selling another. Why is this the case? Say you go to a bank to exchange currencies ahead of a business trip to Japan. You give the bank your U.S. dollars and in return, they give…

Who trades forex? Although forex is now accessible to almost anyone through online trading, everyday people, or retail traders as they are known in the market, still only make up a small percentage of the total volume traded. There are a great many market participants trading forex at any given time, each for their own…

Forex, short for foreign exchange, is the conversion of one currency into another. In the past, forex trading was conducted mainly by large institutions and high-net-worth individuals, due to the costs involved. However, rapid advances in technology over the last decade mean that almost anyone can now trade on currencies from the comfort of their…

Why do people trade? There are many reasons why people or companies might trade. The concept of trading is assumed to have been around for 100’s of thousands of years, ever since humans first realized they could exchange their goods or services to acquire others. This hasn’t changed today, as many trades still happen out of need…