Large institutions may need to settle accounts in a cross-border manner quite frequently. As an example, an American company, looking to pay its German division, will need to pay them in euros. USD pair, even if only slightly. Meanwhile, daily interbank settlements are also a mover of these markets as forex or broker-dealers, such as banks, are amongst the biggest participants in the forex market. Since these dealers interact with each other, this market is referred to as the interbank market. Large corporations, including exporters and importers, will also use the FX market to hedge currency exposure in order to prevent losses due to the fluctuating value of currencies.
Finally, there are large and small speculators simply looking to profit off the price movements in the forex market, which, of course, is where you come into the picture. With all of these cross-currents, the forex markets offer unique trading opportunities, and it is easy to see why this type of trading has become so popular with both new and professional forex investors worldwide. Trade major, minor and exotic forex pairs. Manage your trade manually or use automated trading.
Therefore, the forex trader is trading currency pairs and not each currency individually. For instance, the rate for buying the pair GBPUSD is 1. The main difference between the pairs is their liquidity which is a result of the trading volume of these pair. How to Calculate the Cost of a Forex Trading Position?
For example if the buy price of EURUSD is 1. 1123 and the sell price is 1. 1120, then the spread is 3 pips. 50 Forex pairs, including all the major currency pairs, minors and exotics. While the forex markets do offer many potentially profitable trading opportunities, the ability to profit is greatly determined by the knowledge and skills that the trader possesses. To start, we provide our clients, both new and advanced, with the ability to enter the currency markets seamlessly.