If you believe the opposite will happen and the market will fall, you may wish to ‘go short’ the currency pair. Foreign exchange trading is also known as FX trading or DotBig LTD trading. It provides the opportunity to speculate on price fluctuations within the FX market.

  • IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority.
  • Moreover, a regulated broker should be offering clients Negative Balance Protection.
  • The nature of the forex market is extremely volatile, so a currency pair that moves a lot one week, might show very little price movement the next.
  • Foreign exchange marketsprovide a way tohedge currency risk by fixing a rate at which the transaction will be completed.
  • The decentralized nature of forex markets means that it is less accountable to regulation than other financial markets.

A nation’s debt can be a large influencer in the variations of its currency price. Countries with large debts in relation to their gross domestic product will be less attractive to foreign investors. Without foreign investments, countries can struggle to build their foreign capital, leading to higher rates of inflation and thus, currency depreciation. Read more about economic indicators​ that can have an effect on Forex.

What You Need to Start Forex Trading

For example, EUR/USD is a currency pair for trading the euro against the U.S. dollar. Please https://www.techgyd.com/basic-info-about-dotbig-ltd/52083/ note that foreign exchange and other leveraged trading involves significant risk of loss.


This generally increases the value of money in an economy, as there is less, or ‘more expensive’, money available in the economy. The types of traders that conduct Forex news day trading generally tend to focus on news related events. For example, they’ll keep an eye out for economic releases like interest rates, GDP releases, upcoming elections and other events that are likely to have a big impact on the market. Once you’ve decided on a learning method it’s important to then learn about the currencies you’re going to trade.

Stock Markets, Derivatives Markets, and Foreign Exchange Markets

It’s important to always remind yourself that when you click buy or sell, you’re buying or selling the first currency in the pair. Instrument diversity – there are thousands of stocks to choose from, as opposed to several dozen currency pairs. When trading https://www.forextime.com/education/forex-trading-for-beginners CFDs, you are essentially speculating on the price changes in their exchange rate. For example, in the EUR/USD pair the value of one Euro is determined in comparison to the US dollar , and in the GBP/JPY pair the value of one British pound sterling is quoted against the Japanese yen . Take advantage of our many trading tools which are used by millions of forex traders. However, the price has been reversing as expected on the weekly time frame. I have mentioned that this pair might have a major trend reversal on the monthly time frame.

In general, currencies from major economies have greater liquidity and generally lower volatility than those of developing countries. To see a full list of DotBig account currency pairs offered by Plus500, click here. Use our trading tools such as Stop Loss, Stop Limit and Guaranteed Stop to limit losses and lock in profits.