Investing and Trading in Forex

Forex Trading

Currency Trading (Forex)

Forex refers to trading in foreign exchange markets, i.e. trading with currency. The name Forex originates from the English term Foreign Exchange, which means: currency or coins. With daily sales of more than 4 trillion US dollars, it is the largest liquid financial market in the world. You can also take advantage of the changes in value in the international foreign exchange market.

Make the most of the advantages offered by Foster Markets in conjuction with our liquidity providers by exploiting the following :

Excellent profit opportunities
Leverage effect of 1:200
No intervention from agents (execution of orders through STP)
Possibility of protecting earnings and losses
Low spreads, for example 1 Pip EUR/USD
No costs or commission

The trading of currency is based on the simultaneous nature of the purchase and sale of different currencies on the interbank market. These transactions generate the exchange rates, therefore the value of any currency can be expressed in terms of any other currency. Currencies are always traded in pairs. Therefore, it is not possible to buy or sell just dollars. Euros are bought or sold for dollars, dollars for yen, etc.

Currency trading uses the so-called leverage effects. A leverage of 1:200, for example, means that the trade becomes effective on the amount of capital invested multiplied by 200. Thus the opportunities of making a profit increase substantially. The decisive advantage of trading currency is in the limitation of losses (stop-loss-orders), whilst the opportunities for making profits are unlimited.

Example of Currency Trading

When trading with a batch (100,000 units of currency, for example USD) the value of the Pip (smallest possible change in the value of a currency) is 10 USD. You believe that the Euro will increase against the USD, you buy the Euro for 1.1605 and sell it for 1.1625.Your profit: 20 Pips (difference between 1.1625 and 1.1605). 20 * 10 USD = 200 USD. Which is a profit of 40% on an investment of 500 USD.The usual changes are normally about 100 Pips per day.

Bear in mind that in currency trading the possible losses are the same amount.

Why Trade Forex

There are many reasons in favor of online trading in the Forex market.

Superior returns with minimal investments
Private investors looking for the highest return opportunities have to get involved with the extremely liquid forex market today. There is just a small initial investment needed to directly participate in the market and to actively trade high volumes with little capital.

Leverage of 1:200
This is due to the leverage effects, which are available in forex trading. Our banking partner offers online trading in a variety of leverages with a maximum of 1:200. You can potentially achieve up to 200% profit on your deposit with a marginal 1% move in the market - and this in a very short time.

Faster success than with stocks
Investors, who choose to trade in the forex market and conscientiously make themselves familiar with the topic, can earn profits much faster and more flexible with foreign exchanges than with stocks – and that with an equal investment. This derives from the fact that the speculation period for online trading is significantly lower than for conventional exchange transactions. Positions are usually opened and closed within a day, sometimes even in a few minutes or seconds.

Independence from other markets
Whether boom or recession, regardless of how the international financial markets develop, your chances of making money in the forex market are constantly high, as you can open positions on both rising and falling prices. This major advantage in comparison to stocks ensures that you will be continuously able to make profits with online trading even in negative economic times.

Hedges of gains and losses
With so-called Stop-Loss or Take-Profit-Orders you can easily hedge your gains and losses directly without dealer intervention. The computer will automatically close your open position at your individually assigned rate, in order to secure your profit or to limit a potential loss. You do not have to direct your full attention to monitoring the forex market all day, but can focus on other activities with a free conscience – the computer will back up your positions electronically.

Best trading conditions
Foster Markets offers you the ideal conditions for online trading in the forex market. The spread (the difference between the buying and selling prices), for example, is only 1 pip in EUR / USD in order to guarantee the best possible return. For this reason Foster Markets collects no fees or commissions.

No special qualification necessary
Even newcomers have the chance to achieve substantial gains in online trading, if they invest enough time to learn forex. Regardless of time and place everyone can be a part-time or even full-time forex trader in the forex market - and that comfortably from home.