Online FX Trading 2017
FX trading (foreign exchange trading) has grown in popularity in recent years. In fact, Forex trading is the world’s most active financial market, and its heart and soul is right here in the United Kingdom. Fortunately, FX trading is no longer the domain of institutional brokerages and financial trading professionals. Anyone, anywhere, in the UK can confidently trade FX online. The development of innovative trading platforms such as those provided by AvaTrade facilitate currency trading among novices, intermediate-level traders, and forex professionals.
The FX arena is characterised by extremely high levels of liquidity, 24/5 trading activity, and many lucrative opportunities. FX markets generate high volumes of trading, estimated at $5 trillion per day. At that level, currency trading dwarfs all other markets combined.
Why Should You Trade FX with AvaTrade UK?
- You can trade FX with complete confidence – We are internationally regulated to offer you transparent, credible, and secure trading at your leisure..
- You can trade 50+ currency pairs (major pairs, minor pairs and exotic pairs) – These include the GBP/USD, USD/JPY, GBP/EUR, USD/CAD, GBP/ZAR and others.
- You can enjoy competitive spreads – Starting at just 0.8 pips per trade.
- You get to use powerful trading platforms – We offer fully automated trading or manual trading – it’s your call.
- You get to flex your muscle with maximum leverage on FX trades – You get to flex your muscle with maximum leverage on FX trades.
- You get to fine-tune your trading skills on our platforms – Utilise our extensive educational resources including daily market analysis and expert guides.
- You get to fine-tune your trading skills on our platforms– At AvaTrade we offer 24/5 multilingual live customer support for your benefit.
What is FX Trading?
The Basic Concept
FX in a nutshell
FX trading, or Forex trading, is the purchase of one currency with another. In other words, you’re buying one currency and selling the other currency in the pair. As a forex trader, you are trading pairs and not individual currencies. Consider the GBP/EUR as a case in point. If you buy that pair, you are actually selling EUR and buying GBP. If you sell the GBP/EUR pair, you are selling the GBP and using those proceeds to buy EUR.
FX exchange rates
When you consider a currency such as the GBP/EUR, it is quoted as a rate. The rate may be 1.16. This means that €1.16 is required to purchase £1. For the GBP/USD currency pair (the cable), the exchange rate is $1.22. This means that £1 is the equivalent of $1.22.
FX pairs groups
Fortunately, currency pairs are grouped to make it easier for you to understand which pairs are similar to one another. There are 3 major categories of currency pairs, including exotic currency pairs, minor currency, and major currency pairs. The difference between them is the liquidity inherent in those currency pairs. The most liquid currency pairs are the major pairs. These are the most heavily traded pairs in the market. They include the GBP/USD, USD/CAD, USD/JPY etc. The most traded minor currency pairs include the JPY, GBP and EUR but not the USD. Exotic currency pairs include currencies like the ZAR (South African Rand) as a popular option.
If you would like more information on trading forex online in the UK, we recommend that you take a look at our education section. You will find a wealth of resources including currency education section. You will find a wealth of resources including currency trading video tutorials, Sharp Trader, webinars, and our glossary
The pairing of the currencies is presented as a rate, which reflects the ratio between the values of the two currencies. For instance, the rate for buying the pair GBPUSD is 1.50514, i.e. £1 GBP = $1.50514 USD.
Trading FX at AvaTrade UK
Our FX trading platforms
Here at AvaTrade we offer you a wealth of trading platforms. These are great for manual trading and automated trading. Additionally, we offer you many unique tools and features to bolster your trading activity. This allows you to optimise the profitability of your FX trades and maximise your overall trading experience. You may be interested in trading on your own, or you can simply copy the trades of other traders. Luckily, we offer a complete selection of trading possibilities for you mate!
Our UK traders find tremendous benefit in the demo accounts available on each platform. There, you can practice trading FX on your own, and easily select your preferred trading strategy. Once you master your skills, you can take your trading to the next level by opening a real money account.
Leverage is a resource that should be used with caution. When you trade FX online, leverage allows you to take out a much larger position than you would otherwise be able to afford with your nominal cash resources. Here at AvaTrade, we will teach you everything you need to know about leverage (benefits and pitfalls), and how you can maximise your use of it when trading currencies online. We offer a maximum of 400:1 leverage on many currency pairs. In other words, when you open a position with FX trading, all that’s required is 0.25% of the position size.
Let’s say you’re interested in trading the GBP/USD pair. If the current trading price is 1.2200 and you open a position of 100,000 units of this financial instrument, you will need $122,000 or 81,967.21 GBP. With leveraged trading, you would require just 0.25% of this position size. That amounts to $305, or £204.91. You can see the benefit of leverage in action right there. By taking out a position much larger than your available cash reserves, you can enjoy volume FX trading instantly. Bear in mind, that if the trade moves against you, your losses will be amplified.
How to Calculate the Cost of a Forex Trading Position?
Here at AvaTrade UK, we don’t charge you any commissions except for the spread. The spread indicates the difference between the buy/sell price. This is designated by a Pip. A Pip is the fourth decimal in a currency pair. For example, in the above GBP/USD pair, the fourth decimal is a 0. However, the pair could be trading at 1.2211. If you buy the GBP/USD at 1.2211 and you sell it at 1.2215, there is a movement of 4 Pips. With every FX position that you open, the spread will be multiplied by the size of your position.
Here at AvaTrade, you are able to trade FX with floating spreads or fixed spreads. Our spreads begin from as little as 0.8 Pips.
Range of Markets
UK traders have a huge variety of currency pairs to trade. In total, we have 50+ FX pairs, including exotic pairs, minor pairs and major pairs. We also offer BTC trading – Bitcoin – a popular digital currency that is now being traded as a currency pair.
Take a look at our detailed info on leverage, margin, spreads and pips for our forex pairs on our platforms. We encourage you to read up on our trading conditions & charges to make the most of your FX trading sessions.