HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
Exness information and reviews
Exness
86%

IronFX: How do I start trading forex online? A complete guide


Simply put, forex is a financial market that allows trading currencies globally. If traders believe that a currency will be stronger in value than its pair and if this is indeed the case in the end, then they generate revenue. If someone has ever travelled abroad, then they probably had to exchange their local money for the currency of the country they visited.

In such a case, you will notice there are different exchange rates for various currencies. An exchange rate refers to the relative price between the two different currencies. Taking a real-life example, if someone from America visits Japan, then they will need to sell dollars to buy yen. When they return back, they will probably exchange the remaining yen, if any, for dollars again. Here, they might notice that the exchange rate has changed.

This change in exchange rates is what most traders are attracted to when it comes to trading forex. When people exchange one currency for the other, they are essentially participating in the forex market. The CFD forex broker is usually the mediator between the trader and the market.

What is forex?

Forex, or foreign exchange is considered the largest market worldwide. In fact, it is a decentralised market where online forex trading occurs over the counter (OTC) between participants electronically rather than on one central location. This means that traders can trade anywhere, anytime as long as they are connected to the internet. The majority of transactions occur for speculative reasons, meaning that traders buy CFD’s on currency pairs in the hope that their value will increase so they will be able to benefit by selling them at a higher price later.

Interestingly, the foreign exchange market has a $6.6 trillion daily trading volume, making it the most liquid market worldwide. Also, the market is open 24 hours a day, 5 and a half days a week.

What is important here is that if the market closes in one country at the end of each day, it opens in another because there are different time zones around the world. As a result, there is always someone willing to buy or sell, making it the most actively traded market globally. The biggest financial centres in which trading forex online occurs include Sydney, Singapore, Hong Kong, London, New York, Frankfurt, Tokyo and New Zealand.

What does currency trading involve?

As already discussed, trading forex online involves buying one currency while selling another at the same time. Traders trade on currencies through online forex trading brokers. Currencies are traded in pairs and are quoted in relation to another currency. They are also presented as three-letter symbols, in which the first two letters usually show the name of the specific currency’s country, while the third letter usually shows the name of the country’s currency.

The currency’s price usually reflects the market’s opinion on the present and future health of its underlying economy. 

If we take the U.S dollar and the British pound example, the currency pair would be USD/GBP. “US” refers to the United States while “D” refers to “dollar”. Likewise, “GB” stands for Great Britain while “P” stands for Pound.

Types of currency pairs

There are three main categories regarding currency pairs when trading forex online. These are:

Majors

These currencies are called major because they are the most frequently traded currencies, representing some of the largest economies around the world. USD, EUR, GBP, JPY and CHF are considered major currencies. Another common characteristic here is that all major currency pairs include the USD.

Moreover, there are more fluctuations in these currencies’ prices which provide more trading opportunities. They are also the most liquid which refers to how actively they are traded within the market.

Crosses

Crosses, on the other hand, do not include the U.S dollar. If, however, a currency pair includes any of the two major currencies in a currency pair, besides USD, are called crosses or cross-currency pairs. These are also known as minors. Crosses are also liquid, providing numerous opportunities to traders. EUR, JPY and GBP are the most heavily traded cross currencies.

Exotics

An exotic currency refers to a currency from an emerging market (EM). In other words, exotic currency pairs are the ones that include a major currency and one currency from a developing market. Such markets are Brazil, Chile, Mexico, Hungary or Turkey. Exotic pairs are not frequently traded compared to the other two categories.

Therefore, there are bigger transaction costs associated with these pairs. Also, since they are pairs with lower liquidity, exotics have the tendency to be impacted by economic or geopolitical events more easily.

Many online forex brokers provide numerous currency pairs, so traders usually have ample options to choose from based on their trading needs and preferences.

#source


RELATED

Biggest Mistakes to Avoid as a Beginner Trader

One of the things learned on the trading floor is that the most crucial part of the success formula is to accept a loss. It’s how traders gain an additional profit and an edge against others...

Why Trade Precious Metals

Precious metals are a popular way to diversify a trader’s portfolio. They also act as a hedge against currency inflation or economic instability. Examples of the three most popular traded precious metals are gold...

All that glitters ain't gold

Amid all the commotion in the equities and cryptocurrency markets, the yellow metal has looked somewhat neglected of late. At the height of the coronavirus crisis, gold was...

Understanding Copy Trading: A Comprehensive Guide

Copy trading, an increasingly popular strategy in the world of online trading, offers a unique opportunity for individuals to mirror the trades of experienced traders...

What is an IB brokerage account?

An IB brokerage account, also known as Introducing Broker account, is the account that an IB opens to gain access to all the features that a forex IB program offers...

Are you looking for a new hobby? Put Your Skills to Better Use

Are you looking for a new hobby, but aren't quite sure where to start? Have you considered you might be a trader? Below are a series of questions that will help...

Trade Silver Online: A Complete Guide for Beginners

To start with, what is silver trading? Traders have highly valued silver for many years now. The metal has various usages including jewellery or as a form of currency....

What Is a Limit Order?

A limit order is an order that has a prespecified price to buy or sell a security. For example, if a trader is looking to purchase stock with a limit of $10.50, they will only buy the stock...

Intraday Trading: The Complete Guide

The advent of online trading available to anyone with a smartphone or tablet has opened up financial markets like never before. Modern technology, 24-hour news, and minimum...

Fundamental Analysis: A Beginner's Guide

Different methods are employed by investors and traders to anticipate the fluctuations in the prices of stocks, currencies, and other financial instruments...

High-Frequency Trading (HFT) - Overview, Advantages, Risks

Everyone who is interested in financial markets, of course, knows about the existence of different trading methods. Some of them are quite popular, while not much is known about others...

Understanding the Nuances of Limit Orders in Trading

In the intricate and fluctuating world of trading, limit orders emerge as an essential tool for investors and traders aiming to assert control over their transaction prices...

How to Trade Online with AvaTrade?

If you are just starting out in the world of online trading, it may feel a bit daunting, But have no fear as AvaTrade are here to support you every step of the way. With us, you will learn...

Top Trading Picks 2024: Mastering the Financial Markets for Optimal Success

As we step into 2024, the financial markets offer a kaleidoscope of opportunities for both novice and seasoned traders. With an overwhelming array of advice on financial planning and investment strategies...

Discover social Forex trading with Vantage AutoTrade

Vantage has teamed up with AutoTrade to bring our FOREX traders one of the most popular FX copy trade services available. AutoTrade is an account mirroring service where...

How to Build and Diversify Your Ideal Crypto Portfolio

Crypto portfolio allocation is crucial to survival over the longer term. You are betting on the future when trading a cryptocurrency or investing in it. The future is uncertain...

Investing in the stock market as a beginner

Historically, investing in stocks has been the best way to earn, increase savings, combat inflation and make sure your money is working for you. However, the sheer price of company stocks...

Litecoin Trading: A Brief Guide for Beginners

Litecoin (LTC) is one of the oldest and most popular cryptos on the market. It is often called "digital silver to Bitcoin’s gold", and for good reason. On the technical side, both cryptos...

Mastering Market Liquidity: What Is It And How To Make Use Of It

The term "liquidity" is constantly being tossed around in the finance industry, but what exactly does it mean? Today, we will explore the concept of liquidity, its importance in trading and investing...

Crypto rading for Beginners: Best Strategies and Patterns

Today, there are more than 19,000 cryptocurrencies in existence and counting. On the one hand, crypto trading opens up huge opportunities. On the other hand, such a wide variety can...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.