Forex Trading

Forex Trading

Forex trading is also known as foreign exchange trading, currency trading or FX trading. With over $5 trillion traded on the market each day, the forex market has become the most liquid and dynamic market in the world.

What is forex?

Forex trading involves the conversion of one currency into another. A lot of foreign exchange is done for practical purposes, but the vast majority is undertaken in order to try and turn a profit.

Not only is forex the largest market in the world, it’s one of the most volatile.

Foreign exchange rates are determined by a de-centralised or over-the-counter market where currencies are traded. It’s open to both major institutions and individual investors alike.

What is forex trading and how does it work?

The forex market is a global currency trading market. It’s also sometimes called FX or FOREX. Here, one currency is exchanged for another in what’s known as a ‘currency pair’. There’s an exchange rate between each currency pair that fluctuates regularly.

Forex traders look to profit on fluctuating exchange rates, speculating on whether the price of one currency will go up or down against another.

Why Select Forex Trading?

There are many reasons why this market would appeal to both new and experienced traders, and just some of them include:

There are many reasons why this market would appeal to both new and experienced traders, and just some of them include:

  • Accessibility, because with the power of leveraging you can trade large amounts of forex with just a small amount of capital;

  • Reliability, because with trading taking place on the largest market in the world there are fewer opportunities for individuals and institutions to manipulate prices;

 

  • Ease of trading, because with this being such a large market, liquidity is incredibly high;

  • Benefit from long and short trades, because it is possible to trade currencies without acquiring them;

  • Harness the power of technology, because trading platforms for forex allow you to trade almost instantly in a live environment;

  • Availability, because forex trading occurs on a worldwide market which offers the opportunity to trade 24 hours a day, five days a week.


As you can see, the forex market is highly attractive and potentially very lucrative for traders. Another advantage of this market is that the costs of individual trades are usually low, as they are built into the trades themselves.

As you can see, the forex market is highly attractive and potentially very lucrative for traders. Another advantage of this market is that the costs of individual trades are usually low, as they are built into the trades themselves.

Currency trading basics

Although stocks and shares are traded singularly, all currency trading must be done in pairs. When forex trading, you simultaneously buy one currency and sell another.

For example, the GBP/USD currency pair is sterling vs the dollar. The first currency in the pair (in this case GBP) is known as the base. This is the currency you think will go up or down in value against the second currency (in this case USD), which is known as the quote.

Currencies are often priced to the fifth decimal point. The smallest increment of any trade is known as a ‘pip’, which stands for percentage in point

Can you make money buying and selling currency?

A forex investor can be an individual, a country or even a corporation. Anyone can trade forex online as long as they are astute enough and have enough financial capital.

The size of the market’s liquidity means that prices change rapidly, reacting to news and short-term events. This fluctuation creates opportunities for traders.

You can either take a long (buy) or short (sell) position depending on whether you think the currency’s value will go up or down. You would ‘buy’ a currency pair if you thought that the base currency would strengthen against the quote currency, or if you thought the quote currency would weaken against the base currency.

In contrast, you would sell a currency pair if you believed that the base currency would weaken against the quote currency. Or if you thought that the quote currency would strengthen against the base currency.

If you speculate incorrectly and the market moves against your position, you will make a loss.

Forex Trading with TradeBrainFX

Open an account with a Broker /or a Bank and use the API TradeBrainFX trading Platform and you will not only have access to the forex market but will be able to benefit from our powerful trading platform – which includes charting and Algorithmic abilities that can really make a difference when it comes to implementing your trading strategies.

In order to apply for your account with TradeBrainFX, you need to provide make an account application and buy a user’s Licenses. As a forex trader you can fund your own account with one of our API connection Bank’s OR Broker, in a variety of ways and operate in a corporate, joint or individual capacity. We provide the flexibility, technology and customer service to ensure that you receive a smooth forex trading experience.

CFD Trading

CFD stands for Contract for Difference. A Contract for Difference allows you to speculate on price movements in a number of financial markets, regardless of whether they’re rising or falling.

A CFD acts as a contract to exchange the difference in value of a financial instrument between the time that the contract was opened and the time it was closed. With CFD trading, you never own the underlying instrument, you are only speculating on its price movement.

What is a CFD?

CFDs are a form of derivative trading. A CFD is a tradable instrument that mirrors the movements of the asset underlying it. When you take a position, the value of the asset will move in relation to that position. The contract allows profits or losses to be made from these movements.

With a CFD, you never own the asset in question. Instead, it is a contract between the client (you) and the broker. With CFD trading, you can trade on the margin, and you can go long (buy) if you think prices will rise, or short (sell) if you think they’ll fall.

What is a CFD trade?

A CFD trade allows you to speculate on whether the price of an asset will rise or fall. You can speculate on a number of markets and instruments, including shares, commodities, indices, currencies and treasuries.

When you open a CFD position, you select the amount of CFDs you’d like to trade.

For every point the price moves in your favour, you will gain multiples of the number of CFD units you have bought or sold. For every point the price moves against you, you will make a loss. When trading CFDs, it’s important to know that your losses can exceed your original deposit.

If you think the price of the market will rise, you ‘buy’. If you think the price of the market will fall, you ‘sell’. Then, if you’re correct, your profits will rise in line with any price increase/ decrease. However, if you’re incorrect, you will make the equivalent loss.

What is CFD Hedging?

Some investors use CFDs to hedge their investment portfolio against overall risk. If they have a long-term investment, for example, which they believe will be profitable in the long term but may sink short term, a CFD against that asset may help to offset the initial losses.

This is an effective strategy when considering how to make an investment portfolio more diverse, as it can effectively balance investments out.

How to Get Started with CFD Trading

To begin trading CFDs, all you need to do is create an online account and you can start trading straight away. It is worth remembering that losses can exceed deposits, especially with leveraged investments, so it is best to be well clued up about how to manage investment risk accordingly.

It is possible to make consistent profits from CFD investments, but only if you have researched the assets/instruments you are investing in and based your investment decisions on logic rather than emotion. Constructing a well-developed, comprehensive trading strategy is the best way of approaching CFD trading, and will help you on your way to success.

Do you have to pay tax on a CFD trade?

As you don’t own the underlying asset when trading CFDs, there’s no stamp duty to pay in the UK. However, you will be subject to capital gains tax. CFDs are generally considered to be tax efficient due to this.

What is Day Trading?

Since the advent of the internet, online trading has become a massive activity globally, and with good reason. Online brokers now allow traders to access a myriad of global markets from their computer and/or mobile device, meaning that trading is now more accessible than ever.

This has led to a significant boom in trading as both a hobby and a main source of income (for professionals). Now, day trading is a common activity amongst savvy investors who know how to read and take advantage of the global markets. This guide will explore day trading and what it involves.

Day Trading

Traders who buy and sell securities on the same day are known as day traders, as they are trying to make a short-term profit within daily market trading hours. It is possible to day trade on almost any market, but two of the most traded markets are forex and the stock market.

A professional day trader will typically treat trading as their sole occupation/business, but it can also be a part time occupation or even a hobby. It is also worth noting that day traders can either work for themselves or for larger institutions.

Can Anyone Day Trade?

As long as they have access to the internet, any individual can day trade, as trading is usually conducted through an online broker. Now it is also possible to access the markets through mobile devices, which allows for much greater flexibility in any day trading schedule.

It is worth remembering that trading always carries at least some element of risk and this risk increases when leverage is applied to investments. As such, day trading should be approached sensibly, with a willingness to analyse how each market behaves differently.

Can You Make Money From Day Trading Stocks?

Professional day traders would be out of a job if they didn’t make money from trading on a regular basis, but making a profit is by no means guaranteed. To be successful in this field requires discipline, the ability to research and expert knowledge of global markets and the factors which influence their behaviour.

Since day traders must take advantage of market opportunities as and when they open up, a keen eye for detail is needed, as is the ability to understand the optimal times to buy and sell any given asset. The essentials for day trading success include:

A Strategy: No trader can expect to make money without a solid, comprehensive, and considered strategy which is based around their financial goals and the markets they trade. A strategy also ensures that trades are conducted using logic rather than emotion, which is essential for minimising overall risk.


Research: Research is a necessary part of all trading strategies, as without it traders would essentially be gambling on market movements. In the forex market, for example, looking at upcoming political elections can help traders make predictions on how a certain currency may rise or fall in value, thus informing their trades.

Trading Tools: Using the tools available is an essential part of day trading, as they help traders analyse the markets, execute a strategy, and paint a clearer picture of market behaviour (and influence trades accordingly).

Successful Day Trading

Different day traders take on different levels of risk with their investments, with some preferring high risk, volatile markets, and others preferring lower risk, steadier markets. The chances of becoming a successful day trader really depend on how effective any given strategy is, and how well risk is managed. It undoubtedly takes time to master the markets, and there will always be losses on the path to success.

ECN Broker

At TradeBrainFX our trading platform uses Electronic Communications Networks (ECN) to deliver competitive market prices. This is an automated system which matches buy and sell orders currently in the foreign exchange market and provides information about orders being placed.

As one of ECN providers of a forex Trading Platforms, this means that you get direct access to other participants in the currency market, allowing for quick and easy trading without a dealing desk. Our ECN connected platform uses a pure agency model and pricing to offer an online trading solution that is transparent and free from manipulation.

ECN Pricing

Price quotations from many market participants are consolidated to determine the ECN pricing offered. All market prices are derived from an aggregation engine that is integrated to top-tier banks and non-bank institutions. This means that tighter bid/ask spreads can be offered as opposed to with a non-ECN provider.

The spreads are variable and not fixed when you trade on our ECN platform due to this pricing structure. However, due to the competitive, narrow spreads, there is a charge of a fixed commission per transaction. These are set at 0.60 USD round turn for a mini contract (10,000 lot size) and 6.00 USD round turn for a standard contract (100,000 lot size), this charge could be variable depending of the ECN provider.

When trading currency pairs that are non-USD, the commission will change depending on the current market conversion rate.

ECN vs Dealing Desk Brokers

Many traders can become confused between ECN and Dealing Desk brokers but they both offer different services. Dealing Desk is a form of market making broker which displays its own quotes which are correlated to inter-banking ones. Everything from placing orders to closing them is done automatically and electronically.

Dealing Desk essentially follows a traditional forex trading method whereby trades are placed and the broker is the liquidity provider or counter party to your trade. With a Dealing Desk broker, this process has simply been automated, with any desk dealers replaced by such systems.

At TradeBrainFX we are not dealing with a market maker. There is no dealing desk and we only provide STP order execution.

Benefits of ECN

With an ECN account this offers an alternative trading method for forex traders. Some of the main benefits of using an ECN broker include:

  • Lower trading costs: Narrow spreads and low commissions mean using an ECN broker can be more cost-effective than traditional brokers.
  • Anonymity: ECN trading is anonymous, which can be preferred for high-volume traders. Traders can take advantage of neutral pricing and avoid any bias against their direction based on their forex trading strategies or current market position.
  • Instant trade execution: Live forex prices can be traded on with instant executions with no interference from market makers.

Price feed transparency: Every ECN broker has access to the same feed and trade, meaning that price transparency is provided along with current and past information, with equal access ensuring all traders have equal access and no advantage.

Open an ECN Account

Start a demo trial or open an ECN account here to start trading with one of the best true ECN forex brokers. A minimum deposit of 3,000 Euros is required (or the equivalent funded in USD or GBP) along with a few further details.

Our Partners / Affiliates Brokers are regulated by the Cayman Islands Monetary Authority (CIMA) while NatWest Bank Plc is their solid financial partner for their firms account custodian services. Open a demo or real ECN account and begin trading forex with a top-level ECN broker.

Forex Charts

Those who are accustomed to trading forex on a regular basis will know just how volatile a market it can be. The market behaviour currency pairings can be difficult to predict, not least because so many factors influence the value of currency.

  • The current exchange rate between different currencies
  • The past market behaviour of any given pairing
  • Close, open, low and high price for a certain period (candlestick charts only)

As such, forex charts are incredibly useful to those who wish to invest in the forex market, and can provide significant information regarding all the available currency pairings.

What Are the Different Types of Forex Charts?

The three main types of forex charts are line, bar and candlestick. The most common and popular forex chart type is candlestick, as it displays far more information compared to the other two types of chart. With candlestick charts, you can view ‘how’ the currency pairing moved as opposed to just how much it moved by.
Forex live charts show currency values in the present, and often update every few seconds. These are used by forex traders to monitor the market and help inform their decisions in real time.

Part of an Effective Trading Strategy

Forex charts should be used as part of an effective trading strategy, as they provide essential market information which forex traders can use on a daily basis. Since forex is such a volatile market, it is necessary to know exactly how much currency pairings are changing in value, as well as what is causing the value to go up or down.

Whilst forex charts do not help explain the external factors which influence currency behaviour/value, they still provide useful insight into the precise effects these factors have on the value of any given pairing.

If, for instance, the pound were to sink against the euro as a result of a change in UK economic policy, a comprehensive forex chart will accurately show the extent to which the value went down, and how quickly. This can then be used to predict how currency will behave in similar situations in the future.

Indicators

Many FX charts also include indicators, which are used by traders to interpret the data presented on the chart. There are many different types of indicators which traders use, but two of the main ones include Bollinger Bands and the Relative Strength Index.

These allow traders to draw more data from a forex chart, expanding on the basic information that they display. Bollinger Bands, for instance, can be used to help determine whether a currency is overpriced or under-priced. With this in mind, it is well worth learning how each different indicator works and how the information can be applied to trading forex.

Ultimately, forex live charts and regular forex charts are incredibly useful tools which have become a necessity to forex traders. As a result, it is now possible to gain in depth knowledge of the forex market within seconds.

Metal Trading

Metal trading offers a popular way for investors to diversify their portfolios and hedge against market risks. At our Partner’s/Affiliates Brokers you can access the precious metals market in order to grow or diversify your portfolio with gold and silver investments.

What is Metal Trading?

Precious and base metals are all over the counter (OTC) products, meaning that buying and selling these commodities does not involve physical movement of them. The metal trade works similar to other common investments, with the intention of purchasing a metal at low value and selling for a profit when this has risen.

There are a wide variety of metals available to trade, from the three precious metals of gold, silver and platinum, to base metals that include aluminium, copper, nickel, lead and zinc.

Gold is the most actively traded metal due to its wide range of uses. From use in jewellery and electronics to the large reserves central banks hold, there is a constantly large supply and demand, influenced by market uncertainty, inflation and risk.

Ways to Trade Metals

There are a range of different ways to invest in precious and base metals:

  • Bullion: Those who want the physical gold coins and bars and have space to store them can invest in bullion.
  • Contract for Difference CFDs: A Contract for Difference allows you to speculate on price movements in a number of financial markets, regardless of whether they’re rising or falling.
  • Futures: High liquidity and leverage are available with online metal trading futures, providing large potential profits but also losses.
  • Certificates: Similar to investing in bullion, without the hassle of having to transport and store the metals yourself.

Further contract specifications need to be considered when deciding whether to enter the metal trade. These include the base currency used, contract size, point value and the market opening hours. Otherwise you can begin online metal trading easily.

Why Trade Metals?

The global metals market may not be as large or liquid as forex or the wider commodities, but there are still many advantages of metal trade which make it an appealing option for many traders and investors.

  • Hedge against risk: Precious metals are considered safe haven investments and can be used to hedge against inflation and economic uncertainty. Even though they are still affected by price fluctuations, they can protect against economic changes.
  • Diversify: Diversification is another method for reducing risk and metals play an important part as they can mitigate against more volatile forex markets, for example.
  • International liquidity: Metals are not bound by certain countries the way currencies can be, presenting high levels of international liquidity. This makes it easy to buy and sell metals around the world.

Easy, low cost trading: Online metal trading makes the process simple, with charting and analysis tools alongside low transaction costs for making a metal trade.

Start Metal Trading with our Brokers

Our TradeBrainFX software provides all the tools you need to begin online metal trading. The user-friendly interface makes it easy for new traders to get started, while the market depth and custom strategy orders will help experienced metal traders place orders. News events, an economic calendar and the ability to add an Algorithm are included to improve your metal trading experience too.

TradeBrainFX Platform

Start trading with the TradeBrainFX platform here at our Partners /Affiliates Brokers. The most intelligent forex trading platform since it was launched in 2010; it can be used with a Partner / Affiliate Brokers account to begin buying and selling currencies, metals and CFDs.

Alongside all the excellent features and benefits of the TradeBrainFX platform, it can also be enhanced with our Algorithmic software to truly improve your trading experience. The TradeBrainFX platform can be reached through the internet by becoming a subscriber and then you can use a live or demo account, so you can start trading almost instantly.

TradeBrainFX Platform Features

TradeBrainFX platform remains the most popular trading platform for the ones that they have used it. Thanks to its powerful performance, reliability and ease of use. It includes a number of features that make it versatile and appealing to both beginner and experienced traders, such as:

  • Communication tools: Advanced communication tools are included, which allows traders to communicate through the platform in real time, and share successfully their algorithms and strategies.
  • Trade Screen: Clear and easy to use interface that displays the available contracts, active and completed sell and buy orders, current market spreads and more information.
  • Data reporting: Trading data is collected and can be viewed in a range of different report types. These include profit and loss, winners and losers, performance and time analysis

Positions and pending orders: Open positions and pending orders can all be all closed just with one click.

TradeBrain FX Demo

For those new to trading or who want to practise using TRADEBRAINFX PLATFORM before trading on the live markets, are available to subscribers upon request. Testing of an Algorithm can be done using a demo account on the TRADEBRAINFX PLATFORM too.

Demo accounts for TRADEBRAINFX PLATFORM have a limited time, but clients with a live account can extend this. Prices for the demo account are fed direct from the live market pricing, though they are executed within the demo server environment.

Trade on our TradeBrainFX Platform

Open an account with our Partners/Affiliate Brokers to become a TRADEBRAINFX trader. Complete back office access is provided with our enhanced TradeBrainFX platform trading software, along with competitive spreads on major currency pairs and the ability to access a range of markets from just one account.

Experience a highly efficient trading process with the TradeBrainFX package, its advanced analysis features and further multiple tools. Request a demo or open a live account and start using the TradeBrainFX platform for online trading.