XM does not provide services to residents of the United States of America.
6 Asset Classes - 10 Trading Platforms - Over 1000 Instruments.
Trade Forex, Individual Stocks, Commodities, Precious Metals, Energies, Equity and Thematic Indices at XM.
Forex Trading Spreads / Conditions
| Currency Pair | Spread as low as (pips) | Min Margin Percentage | Long Swap Value (Points)** |
Short Swap Value (Points)** |
Value of 1 lot | Limit and Stop Levels*** |
|---|---|---|---|---|---|---|
| USDJPY | 2 | 3.33% | 5.99 | -31.11 | 100,000 USD | 0 |
| CADCHF | 3.6 | 3.33% | 2.39 | -7.68 | 100,000 CAD | 0 |
| EURPLN | 66.5 | 5% | -65.29 | -2.99 | 100,000 EUR | 0 |
| EURSEK | 97.1 | 5% | -71.84 | -107.84 | 100,000 EUR | 0 |
| NZDCAD | 3.8 | 5% | -0.85 | -5.85 | 100,000 NZD | 0 |
| NZDJPY | 3 | 5% | 2.93 | -16.37 | 100,000 NZD | 0 |
| AUDUSD | 2.3 | 3.33% | -2.48 | -1.38 | 100,000 AUD | 0 |
| CADJPY | 3.2 | 3.33% | 4.23 | -16.77 | 100,000 CAD | 0 |
| EURAUD | 3.4 | 3.33% | -12.47 | -2.47 | 100,000 EUR | 0 |
| EURCHF | 2.4 | 3.33% | 0.87 | -11.63 | 100,000 EUR | 0 |
| EURJPY | 2.1 | 3.33% | 2.25 | -24.95 | 100,000 EUR | 0 |
| EURTRY | 740 | 5% | -5,080.87 | 895.13 | 100,000 EUR | 0 |
| AUDNZD | 3.7 | 5% | -4.62 | -6.22 | 100,000 AUD | 0 |
| CHFSGD | 27.5 | 5% | -22.85 | -4.45 | 100,000 CHF | 0 |
| GBPDKK | 106 | 5% | -29.54 | -122.74 | 100,000 GBP | 0 |
| USDCNH | 3.6 | 5% | -3.09 | -14.84 | 100,000 USD | 0 |
| AUDJPY | 3.1 | 3.33% | 5.75 | -16.95 | 100,000 AUD | 0 |
| EURGBP | 1.8 | 3.33% | -5.98 | 0.82 | 100,000 EUR | 0 |
| EURHKD | 53.4 | 5% | -85.81 | -41.51 | 100,000 EUR | 0 |
| GBPJPY | 3 | 3.33% | 8.33 | -39.87 | 100,000 GBP | 0 |
| NZDUSD | 2.8 | 5% | -2.82 | -0.52 | 100,000 NZD | 0 |
| USDZAR | 11.5 | 5% | -38.12 | -2.52 | 100,000 USD | 0 |
| CHFJPY | 2.3 | 3.33% | -6.91 | -12.61 | 100,000 CHF | 0 |
| GBPSGD | 32 | 5% | -5.84 | -21.84 | 100,000 GBP | 0 |
| GBPNOK | 147.5 | 5% | -99.72 | -117.22 | 100,000 GBP | 0 |
| USDHUF | 55 | 5% | -56.35 | -20.85 | 100,000 USD | 0 |
| EURSGD | 18.5 | 5% | -10.55 | -12.15 | 100,000 EUR | 0 |
| GBPAUD | 3.8 | 3.33% | -6.83 | -10.63 | 100,000 GBP | 0 |
| USDMXN | 216 | 5% | -505.59 | 164.41 | 100,000 USD | 0 |
| USDSGD | 21.1 | 5% | -4.31 | -16.11 | 100,000 USD | 0 |
| GBPUSD | 1.8 | 3.33% | -3.36 | -3.66 | 100,000 GBP | 0 |
| EURHUF | 36.5 | 5% | -76.29 | -6.39 | 100,000 EUR | 0 |
| GBPSEK | 113 | 5% | -31.17 | -185.27 | 100,000 GBP | 0 |
| NZDCHF | 3.9 | 5% | 2.15 | -6.85 | 100,000 NZD | 0 |
| USDPLN | 38.5 | 5% | -45.63 | -18.13 | 100,000 USD | 0 |
| EURCAD | 2.5 | 3.33% | -7.59 | -4.39 | 100,000 EUR | 0 |
| EURNOK | 130 | 5% | -130.93 | -54.33 | 100,000 EUR | 0 |
| GBPCHF | 3.7 | 3.33% | 5.85 | -18.75 | 100,000 GBP | 0 |
| EURNZD | 4 | 5% | -15.04 | -0.04 | 100,000 EUR | 0 |
| GBPNZD | 6.5 | 5% | -6.43 | -13.93 | 100,000 GBP | 0 |
| USDCAD | 2.3 | 3.33% | -0.05 | -7.74 | 100,000 USD | 0 |
| USDDKK | 36.5 | 5% | -18.93 | -90.63 | 100,000 USD | 0 |
| USDNOK | 164 | 5% | -80.23 | -91.53 | 100,000 USD | 0 |
| EURDKK | 41.7 | 5% | -50.82 | -67.02 | 100,000 EUR | 0 |
| GBPCAD | 4.3 | 3.33% | -2.13 | -12.53 | 100,000 GBP | 0 |
| USDSEK | 120 | 5% | -26.32 | -142.12 | 100,000 USD | 0 |
| USDTRY | 480 | 5% | -4,536.51 | 531.39 | 100,000 USD | 0 |
| EURUSD | 1.6 | 3.33% | -6.99 | 1.21 | 100,000 EUR | 0 |
| SGDJPY | 21.5 | 5% | -8.57 | -8.76 | 100,000 SGD | 0 |
| USDHKD | 4 | 5% | -7.45 | -9.27 | 100,000 USD | 0 |
| NZDSGD | 28.6 | 5% | -2.42 | -9.72 | 100,000 NZD | 0 |
| EURZAR | 161 | 5% | -458.15 | 67.05 | 100,000 EUR | 0 |
| USDCHF | 1.8 | 3.33% | 4.23 | -14.17 | 100,000 USD | 0 |
| AUDCAD | 3.3 | 3.33% | -2.06 | -5.53 | 100,000 AUD | 0 |
| AUDCHF | 3.1 | 3.33% | 3.04 | -8.36 | 100,000 AUD | 0 |
| Currency Pair | Spread as low as (pips) | Min Margin Percentage | Long Swap Value (Points)** |
Short Swap Value (Points)** |
Value of 1 lot | Limit and Stop Levels*** |
|---|---|---|---|---|---|---|
| CHFSGDmicro | 27.5 | 5% | -22.85 | -4.45 | 1,000 CHF | 0 |
| EURSGDmicro | 18.5 | 5% | -10.55 | -12.15 | 1,000 EUR | 0 |
| GBPAUDmicro | 3.8 | 3.33% | -6.83 | -10.63 | 1,000 GBP | 0 |
| GBPJPYmicro | 3 | 3.33% | 8.33 | -39.87 | 1,000 GBP | 0 |
| USDJPYmicro | 2 | 3.33% | 5.99 | -31.11 | 1,000 USD | 0 |
| AUDJPYmicro | 3.1 | 3.33% | 5.75 | -16.95 | 1,000 AUD | 0 |
| AUDNZDmicro | 3.7 | 5% | -4.62 | -6.22 | 1,000 AUD | 0 |
| CADCHFmicro | 3.6 | 3.33% | 2.39 | -7.68 | 1,000 CAD | 0 |
| EURAUDmicro | 3.4 | 3.33% | -12.47 | -2.47 | 1,000 EUR | 0 |
| EURSEKmicro | 97.1 | 5% | -71.84 | -107.84 | 1,000 EUR | 0 |
| EURUSDmicro | 1.6 | 3.33% | -6.99 | 1.21 | 1,000 EUR | 0 |
| NZDCADmicro | 3.8 | 5% | -0.85 | -5.85 | 1,000 NZD | 0 |
| CADJPYmicro | 3.2 | 3.33% | 4.23 | -16.77 | 1,000 CAD | 0 |
| USDCHFmicro | 1.8 | 3.33% | 4.23 | -14.17 | 1,000 USD | 0 |
| USDMXNmicro | 216 | 5% | -505.59 | 164.41 | 1,000 USD | 0 |
| USDPLNmicro | 38.5 | 5% | -45.63 | -18.13 | 1,000 USD | 0 |
| EURGBPmicro | 1.8 | 3.33% | -5.98 | 0.82 | 1,000 EUR | 0 |
| EURTRYmicro | 740 | 5% | -5,080.87 | 895.13 | 1,000 EUR | 0 |
| AUDCHFmicro | 3.1 | 3.33% | 3.04 | -8.36 | 1,000 AUD | 0 |
| EURDKKmicro | 41.7 | 5% | -50.82 | -67.02 | 1,000 EUR | 0 |
| EURNOKmicro | 130 | 5% | -130.93 | -54.33 | 1,000 EUR | 0 |
| GBPCADmicro | 4.3 | 3.33% | -2.13 | -12.53 | 1,000 GBP | 0 |
| USDHKDmicro | 4 | 5% | -7.45 | -9.27 | 1,000 USD | 0 |
| EURCADmicro | 2.5 | 3.33% | -7.59 | -4.39 | 1,000 EUR | 0 |
| EURPLNmicro | 66.5 | 5% | -65.29 | -2.99 | 1,000 EUR | 0 |
| GBPDKKmicro | 106 | 5% | -29.54 | -122.74 | 1,000 GBP | 0 |
| GBPSEKmicro | 113 | 5% | -31.17 | -185.27 | 1,000 GBP | 0 |
| NZDJPYmicro | 3 | 5% | 2.93 | -16.37 | 1,000 NZD | 0 |
| SGDJPYmicro | 21.5 | 5% | -8.57 | -8.76 | 1,000 SGD | 0 |
| USDDKKmicro | 36.5 | 5% | -18.93 | -90.63 | 1,000 USD | 0 |
| USDSEKmicro | 120 | 5% | -26.32 | -142.12 | 1,000 USD | 0 |
| CHFJPYmicro | 2.3 | 3.33% | -6.91 | -12.61 | 1,000 CHF | 0 |
| EURCHFmicro | 2.4 | 3.33% | 0.87 | -11.63 | 1,000 EUR | 0 |
| EURJPYmicro | 2.1 | 3.33% | 2.25 | -24.95 | 1,000 EUR | 0 |
| EURZARmicro | 161 | 5% | -458.15 | 67.05 | 1,000 EUR | 0 |
| GBPCHFmicro | 3.7 | 3.33% | 5.85 | -18.75 | 1,000 GBP | 0 |
| GBPNZDmicro | 6.5 | 5% | -6.43 | -13.93 | 1,000 GBP | 0 |
| GBPSGDmicro | 32 | 5% | -5.84 | -21.84 | 1,000 GBP | 0 |
| AUDCADmicro | 3.3 | 3.33% | -2.06 | -5.53 | 1,000 AUD | 0 |
| EURHUFmicro | 36.5 | 5% | -76.29 | -6.39 | 1,000 EUR | 0 |
| NZDCHFmicro | 3.9 | 5% | 2.15 | -6.85 | 1,000 NZD | 0 |
| NZDUSDmicro | 2.8 | 5% | -2.82 | -0.52 | 1,000 NZD | 0 |
| USDNOKmicro | 164 | 5% | -80.23 | -91.53 | 1,000 USD | 0 |
| USDTRYmicro | 480 | 5% | -4,536.51 | 531.39 | 1,000 USD | 0 |
| GBPNOKmicro | 147.5 | 5% | -99.72 | -117.22 | 1,000 GBP | 0 |
| EURHKDmicro | 53.4 | 5% | -85.81 | -41.51 | 1,000 EUR | 0 |
| GBPUSDmicro | 1.8 | 3.33% | -3.36 | -3.66 | 1,000 GBP | 0 |
| USDHUFmicro | 55 | 5% | -56.35 | -20.85 | 1,000 USD | 0 |
| USDSGDmicro | 21.1 | 5% | -4.31 | -16.11 | 1,000 USD | 0 |
| USDCADmicro | 2.3 | 3.33% | -0.05 | -7.74 | 1,000 USD | 0 |
| USDCNHmicro | 3.6 | 5% | -3.09 | -14.84 | 1,000 USD | 0 |
| NZDSGDmicro | 28.6 | 5% | -2.42 | -9.72 | 1,000 NZD | 0 |
| AUDUSDmicro | 2.3 | 3.33% | -2.48 | -1.38 | 1,000 AUD | 0 |
| USDZARmicro | 11.5 | 5% | -38.12 | -2.52 | 1,000 USD | 0 |
| EURNZDmicro | 4 | 5% | -15.04 | -0.04 | 1,000 EUR | 0 |
| Currency Pair | Commission per 100,000 USD traded***** | Min Margin Percentage | Long Swap Value (Points)** |
Short Swap Value (Points)** |
Value of 1 lot | Limit and Stop Levels*** |
|---|---|---|---|---|---|---|
| EURDKK. | 3.5 USD | 5% | -50.82 | -67.02 | 100,000 EUR | 0 |
| USDSGD. | 3.5 USD | 5% | -4.31 | -16.11 | 100,000 USD | 0 |
| AUDCHF. | 3.5 USD | 3.33% | 3.04 | -8.36 | 100,000 AUD | 0 |
| EURAUD. | 3.5 USD | 3.33% | -12.47 | -2.47 | 100,000 EUR | 0 |
| EURNZD. | 3.5 USD | 5% | -15.04 | -0.04 | 100,000 EUR | 0 |
| EURTRY. | 3.5 USD | 5% | -5,080.87 | 895.13 | 100,000 EUR | 0 |
| NZDSGD. | 3.5 USD | 5% | -2.42 | -9.72 | 100,000 NZD | 0 |
| USDTRY. | 3.5 USD | 5% | -4,536.51 | 531.39 | 100,000 USD | 0 |
| EURCAD. | 3.5 USD | 3.33% | -7.59 | -4.39 | 100,000 EUR | 0 |
| EURHKD. | 3.5 USD | 5% | -85.81 | -41.51 | 100,000 EUR | 0 |
| USDHUF. | 3.5 USD | 5% | -56.35 | -20.85 | 100,000 USD | 0 |
| USDSEK. | 3.5 USD | 5% | -26.32 | -142.12 | 100,000 USD | 0 |
| CHFSGD. | 3.5 USD | 5% | -22.85 | -4.45 | 100,000 CHF | 0 |
| EURGBP. | 3.5 USD | 3.33% | -5.98 | 0.82 | 100,000 EUR | 0 |
| EURPLN. | 3.5 USD | 5% | -65.29 | -2.99 | 100,000 EUR | 0 |
| GBPSEK. | 3.5 USD | 5% | -31.17 | -185.27 | 100,000 GBP | 0 |
| USDCAD. | 3.5 USD | 3.33% | -0.05 | -7.74 | 100,000 USD | 0 |
| AUDJPY. | 3.5 USD | 3.33% | 5.75 | -16.95 | 100,000 AUD | 0 |
| EURHUF. | 3.5 USD | 5% | -76.29 | -6.39 | 100,000 EUR | 0 |
| EURSGD. | 3.5 USD | 5% | -10.55 | -12.15 | 100,000 EUR | 0 |
| GBPDKK. | 3.5 USD | 5% | -29.54 | -122.74 | 100,000 GBP | 0 |
| USDDKK. | 3.5 USD | 5% | -18.93 | -90.63 | 100,000 USD | 0 |
| GBPNZD. | 3.5 USD | 5% | -6.43 | -13.93 | 100,000 GBP | 0 |
| EURUSD. | 3.5 USD | 3.33% | -6.99 | 1.21 | 100,000 EUR | 0 |
| EURZAR. | 3.5 USD | 5% | -458.15 | 67.05 | 100,000 EUR | 0 |
| GBPCHF. | 3.5 USD | 3.33% | 5.85 | -18.75 | 100,000 GBP | 0 |
| USDNOK. | 3.5 USD | 5% | -80.23 | -91.53 | 100,000 USD | 0 |
| USDPLN. | 3.5 USD | 5% | -45.63 | -18.13 | 100,000 USD | 0 |
| USDZAR. | 3.5 USD | 5% | -38.12 | -2.52 | 100,000 USD | 0 |
| GBPJPY. | 3.5 USD | 3.33% | 8.33 | -39.87 | 100,000 GBP | 0 |
| USDJPY. | 3.5 USD | 3.33% | 5.99 | -31.11 | 100,000 USD | 0 |
| EURNOK. | 3.5 USD | 5% | -130.93 | -54.33 | 100,000 EUR | 0 |
| NZDUSD. | 3.5 USD | 5% | -2.82 | -0.52 | 100,000 NZD | 0 |
| CADJPY. | 3.5 USD | 3.33% | 4.23 | -16.77 | 100,000 CAD | 0 |
| EURSEK. | 3.5 USD | 5% | -71.84 | -107.84 | 100,000 EUR | 0 |
| GBPNOK. | 3.5 USD | 5% | -99.72 | -117.22 | 100,000 GBP | 0 |
| NZDCHF. | 3.5 USD | 5% | 2.15 | -6.85 | 100,000 NZD | 0 |
| USDCHF. | 3.5 USD | 3.33% | 4.23 | -14.17 | 100,000 USD | 0 |
| NZDCAD. | 3.5 USD | 5% | -0.85 | -5.85 | 100,000 NZD | 0 |
| GBPUSD. | 3.5 USD | 3.33% | -3.36 | -3.66 | 100,000 GBP | 0 |
| AUDNZD. | 3.5 USD | 5% | -4.62 | -6.22 | 100,000 AUD | 0 |
| USDHKD. | 3.5 USD | 5% | -7.45 | -9.27 | 100,000 USD | 0 |
| CHFJPY. | 3.5 USD | 3.33% | -6.91 | -12.61 | 100,000 CHF | 0 |
| GBPCAD. | 3.5 USD | 3.33% | -2.13 | -12.53 | 100,000 GBP | 0 |
| USDMXN. | 3.5 USD | 5% | -505.59 | 164.41 | 100,000 USD | 0 |
| GBPSGD. | 3.5 USD | 5% | -5.84 | -21.84 | 100,000 GBP | 0 |
| EURJPY. | 3.5 USD | 3.33% | 2.25 | -24.95 | 100,000 EUR | 0 |
| SGDJPY. | 3.5 USD | 5% | -8.57 | -8.76 | 100,000 SGD | 0 |
| NZDJPY. | 3.5 USD | 5% | 2.93 | -16.37 | 100,000 NZD | 0 |
| GBPAUD. | 3.5 USD | 3.33% | -6.83 | -10.63 | 100,000 GBP | 0 |
| CADCHF. | 3.5 USD | 3.33% | 2.39 | -7.68 | 100,000 CAD | 0 |
| AUDUSD. | 3.5 USD | 3.33% | -2.48 | -1.38 | 100,000 AUD | 0 |
| EURCHF. | 3.5 USD | 3.33% | 0.87 | -11.63 | 100,000 EUR | 0 |
| AUDCAD. | 3.5 USD | 3.33% | -2.06 | -5.53 | 100,000 AUD | 0 |
Examples of the commission fee calculation (XM Zero Accounts only)
Example 1
To position Buy 3 lots USD/JPY, the transaction volume is 300,000 USD. Considering that for a USD 100,000 transaction size commission is charged for both opening and closing the position at USD 3.5 each, for this transaction it will be: 2 x (3.5 x 300,000 / 100,000) = 21 USD. The commission fee is deducted from the account during the opening of the transaction for both the operations at once (opening and closing).
Example 2
For a “Buy 2 lots EUR/USD” position the transaction size is 200,000 EUR which corresponds to 220,000 USD, given a EUR/USD exchange rate of 1.10000. Considering that for a USD 100,000 transaction size commission is charged for both opening and closing the position at USD 3.5 each, for this transaction it will be: 2 x (3.5 x 220,000 / 100,000) = 15.4 USD. The commission fee is deducted from the account during the opening of the transaction for both the operations at once (opening and closing).
FOREX TRADING HOURS
(GMT+2 time zone, please note DST may apply)
Monday – Friday: 00:05 – 23:50
** If you leave an open position for the next trading day, you pay or you obtain the certain amount, calculated on the basis of interest rates difference of two currencies in currency pair. This operation is called "swap." In the trading terminal, "swap" is automatically converted into the deposit currency. The operation is conducted at 00.00 (GMT+2 time zone, please note DST may apply) and can take several minutes. From Wednesday to Thursday swap is charged for three days.
*** Min. level for placing pending orders at a current market price.
***** For instruments not denoted in USD calculations should be based at the current exchange rate (for XM Zero Accounts only)
About Forex Trading
Forex trading, or currency trading, or FX trading, as it can be also abbreviated, are all terms that describe the currency exchange market as we know it today, which in simple language refers to the global, decentralized marketplace where individuals, companies and financial institutions exchange currencies for one another at floating rates.
The current floating rates system, which we know today, was adopted after World War II and has been in effect ever since. Prior to the current forex trading rates system, a monetary management system called the Bretton Woods Agreement was in existence, in which the exchange prices of currencies against each other were tied and correlated to the reserves of gold in possession of the two countries that were the originators of the actual currencies related to a transaction.
Forex Trading Marketplace
The forex trading marketplace, as it stands today, is the world’s largest and most liquid market due to a number of factors which include, but are not limited to, ease of performing transactions over the internet, the modern development of travelling, ease of international communication and modern transportation, which have made our world a smaller place.
By making our world a smaller and more global place, this automatically means that people, goods and services can travel faster and more easily. This also means that a necessity of currencies to be traded against each other is needed in order for this to happen. All these factors have determined a growing forex trading marketplace, which will only continue to grow and become more dynamic, liquid and responsive.
Online Forex Trading
Among the main participants of the forex trading market, one of the most growing segments of the total pool of participants of the marketplace, are retail foreign exchange traders (individuals) who participate in online forex trading for mainly speculative reasons with the ultimate goal of generating a profit from currency fluctuations (market changes), or hedging unwanted currency risk.
This segment participates in the forex trading marketplace via a broker (like XM), or via a bank. In this case, the bank or the broker will issue the retail client a trading account that will be funded in a base currency (usually the local currency of the region where the client is domiciled), and the client will have the opportunity to buy and sell currencies both online and over the phone with the goal of deriving profit.
Forex Trading via a Broker
Participating in the forex trading market via a broker like XM means that the client receives access to real-time pricing of the forex market and is quoted buy and sell prices for a number of instruments via an online trading platform. The client has the freedom to decide at which price they decide to buy or sell, and vice versa, and can execute a transaction at any time they wish.
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What is Forex Trading?
Forex trading, also known by the name of currency trading or FX trading, refers to buying a particular currency while selling another in exchange. Trading currencies always involves exchanging one currency for another.
The ultimate aim can vary and can be any of the below but not limited to the below:
- 1. Exchanging currency A (e.g. USD) to currency B (e.g. EUR) for travelling purposes;
- 2. Exchanging currency A (e.g. USD) to currency B (e.g. EUR) for trading purposes;
- 3. Exchanging currency A (e.g. USD) to currency B (e.g. EUR) for speculative purposes, with the goal to make a profit.
Due to all the above, and not limited to the above, the forex trading market is today the world’s most liquid and most volatile market, with over $5 trillion traded daily.
How Does Forex Trading Work?
Forex trading is in essence trading currencies for one another. As such, an XM client sells one currency against another at a current market rate.
In order to be able to trade, it is required to open an account and hold currency A and then exchange currency A for currency B either for a long term or a short-term trade, with the ultimate goal varying accordingly.
Since FX trading is performed on currency pairs (i.e. the quotation of the relative value of one currency unit against another currency unit), in which the first currency is the so-called base currency, while the second currency is called the quote currency.
For example, the quotation EUR/USD 1.2345 is the price of the euro expressed in US dollars, which means that 1 euro equals 1.2345 US dollars.
Currency trading can be carried out 24 hours a day, from 22.00 GMT on Sunday until 22.00 GMT on Friday, with currencies traded among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Paris, Sydney, Singapore and Hong Kong.
What Influences Prices in Forex Trading?
There is an endless number of factors that all contribute and influence the prices in forex trading (i.e. currency rates) daily, but it could be safe to say that there are 6 major factors which contribute the most and are more or less the main driving forces for forex trading price fluctuation:
- 1. Differentials in inflation
- 2. Differentials in interest rates
- 3. Current account deficits
- 4. Public debt
- 5. Terms of trade
- 6. Political and economic stability
In order to best comprehend the above 6 factors, you will have to keep in mind that currencies are traded against one another. So when one falls, another one rises as the price denomination of any currency is always stated against another currency.
What is Forex Trading Software?
Forex trading software is an online trading platform provided to each XM client, which allows them to view, analyze and trade currencies, or other asset classes
In simple terms, each XM client is provided access to a trading platform (i.e. software) which is directly connected to the global market price feed and allows them to perform transactions without the help of a third party.
Who are Forex Trading Market Participants?
Forex trading market participants can fall in any of the following categories:
- 1. Travellers or overseas consumers who exchange money to travel overseas or purchase goods from overseas.
- 2. Businesses that purchase raw materials or goods from overseas and need to exchange their local currency to the currency of the country of the seller.
- 3. Investors or speculators who exchange currencies, which either require a foreign currency, to perform trading in equities or other asset classes from overseas or either are trading currencies with the aim of making a profit from market changes.
- 4. Banking institutions that exchange money to service their clients or to lend money to overseas clients.
- 5. Governments or central banks that either buy or sell currencies and try to adjust financial imbalances, or adjust economic conditions.
What is Important in Forex Trading?
As a retail foreign exchange trader, the most important factors that affect your trading is trade execution quality, speed and spreads. The one affects the other.
A spread is the difference between the bid and the ask price of a currency pair (buy or sell price), and so to make it even easier it is the price at which your broker or bank is willing to sell or buy your requested trade order. Spreads, however, only matter with the correct execution.
In the forex trading marketplace, when we refer to execution we mean the speed at which a foreign exchange trader can actually buy or sell what they see on their screen or what they are quoted as bid/ask price over the phone. A good price makes no sense if your bank or broker cannot fill your order fast enough to get that bid/ask price.
What are Majors in Forex Trading?
In forex trading, some currency pairs are nicknamed majors (major pairs). This category includes the most traded currency pairs and they always include the USD on one side.
Major pairs include: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, NZD/USD
What are Minors in Forex Trading?
In forex trading, minor currency pairs or crosses are all currency pairs that do not include the USD on one side.
What are Exotics in Forex Trading?
In forex trading, exotic pairs or exotics refers to currency pairs that include a major currency paired with the currency of a smaller or emerging economy. Exotic pairs tend to be traded less frequently, in comparison to majors. They usually have more volatility and are less liquid.
