What is Forex Trading?

What is Forex Trading?
Trading the foreign currency market, or the Forex Market, as it is commonly known, is the most developed financial market in the world. The Forex Market is not concentrated in any one exchange, rather the vast majority of forex trades are private deals between two parties in what is known as an 'Over the Counter' or OTC market. The currencies are traded and quoted in pairs such as Euro/U.S. Dollar or U.S. Dollar/Japanese Yen, where a deal is the combination of selling one currency while buying another currency at the same time.

What is a Spread?
Leverage allows traders to borrow money and use that money to invest in the foreign exchange market. Because of leverage, clients without a huge amount of capital are able to make large investments, whereas in other markets such as the equities market, clients would have to pay 50% of the full amount for each share of stock they were investing in.


What is Margin?
Margin is a performance bond, or good faith deposit, to ensure against trading losses. The margin requirement allows traders to hold a position much larger than their actual account value. In the event that funds in the account fall below margin requirements, some or all open positions will close. This prevents clients' accounts from falling into a negative balance, even in a highly volatile, fast moving market.


How Do I Trade Currencies?
From the Finexo Platform, you can buy and sell currencies instantly according to your desire. Our platform allows you to leverage your funds 100:1. Currently, the ForexWebTrader platform allows you to trade more than 45 different Currency pairs.


What is Leverage?
Leverage allows traders to borrow money and use that money to invest in the foreign exchange market. Because of leverage, clients without a huge amount of capital are able to make large investments, whereas in other markets such as the equities market, clients would have to pay 50% of the full amount for each share of stock they were investing in.


Future Trades
Limit orders are commonly used to enter a market and to take profit at predefined levels. Limit orders to buy are placed below the current market price and are executed when the Ask price hits or breaches the price level specified. (If placed above the current market price, the order is filled instantly at the best available price below or at the limit price.) Limit orders to sell are placed above the current market price and are executed when the Bid price breaches the price level specified.

Welcome to Finexo.
Welcome to Finexo, the elite broker trading and investing platform for the Forex exchange.
The Forex market is the safest, most liquid and most traded exchange in the world. With over 3 trillion dollars flowing through it each day, it is easy to see why Forex trading has become popular among the average investor. Yet, without proper Forex training, education and guidance, success at trading the Forex market is difficult. The Finexo Forex platform is designed to educate our clients and make the Forex markets easy and understandable.
Finexo provides clients with 24 hour customer service, top-rated Forex market updates and award winning, cutting edge technology, that provides Forex traders with the fastest possible execution on all of their trades.  
Finexo's commitment to the individual Forex investor is paramount to our mission. Through our professionalism, knowledge and advanced technology, Finexo has rapidly become distributor to one of the most decorated and premier Forex platforms in the world.
Through the use of real-time Forex news, Forex updates, charts, graphs and a 24 hour support network, Finexo’s dedication to providing the most accessible, practical and successful way to trade Forex online is unmatched.


Who We Are
Finexo was established in 2003 by veterans of the global financial industry with the intention of bringing average investors into the Forex market. A market once thought to be exclusively for the elite, professional investors.
Finexo's system of commerce is governed by strict regulations and our corporate philosophy is based on the highest of standards with regard to our business practices. For our customers, this ensures that stringent quality control standards are being met and, in fact, exceeded. The regulations require that broker trading firms maintain enough liquid reserve capital to cover their deposits and operate under a fair and equitable principle of trade. From the beginning, Finexo’s founders made a determined effort to maintain the highest standards, complying with the stringent regulations governing much of the financial world was the first step towards that goal.  


Mission
Finexo’s primary belief is that the Forex market is not just for professional investors, traders and institutions, rather the Forex should be accessible to everybody. It has been the mission of Finexo to educate and guide individual investors while providing an unrivaled platform anyone can understand. By simplifying the process, educating investors and standing with them 24 hours a day, Finexo has become the premier Forex broker for every level of investor.


Education
By improving the knowledge base and trading skills of the individual, Finexo is helping to create a new generation of global investor, one that is more diverse, in-tune to economic indicators and familiar with the political structure of the world. A well rounded investor and trader is a goal Finexo has for each of its clients.


Technology
With a state-of-the-art trading platform, the ability to trade with ease from anywhere via PDA and on-the-spot SMS market updates, Finexo is leading Forex trading into the future. Finexo’s development team is always working to create new products designed to help customers make the most of their trading experiences. Through Innovation, Finexo is leading the way in currency trading.



What is the Forex market? 
 
The online trading environment for foreign exchange encompasses the largest, most dynamic capital market in the world with more than USD 3 trillion traded daily. The Forex market is a continuous, 24/5 marketplace open from Sunday afternoon (4 PM EDT) through the close of the US markets on Friday (5 PM EDT). The Forex market is where investors can trade one currency against another currency. 

What is a currency cross?
 
Currencies are always priced in pairs. All trades take place between two different currencies resulting in the concurrent purchase of one currency and sale of another. For example, when you trade EURUSD, the currency cross is Euros versus US dollars. One currency will be bought (long position) while the other currency is sold (short position). 

What is the Bid-Ask Spread?
 
The bid-ask spread is the buying and selling spread between two currencies. The bid price is the price at which the currency is sold. The ask price is the price at which the currency is bought. The difference between the bid price and the ask price is known as the bid-ask spread. The bid-ask spread differs between currency crosses with more common crosses (majors) having tighter spreads.
 
 
Forex Order Types
 
Margin Order Types 
The basic landscape in FX trading involves a number of order types that facilitate efficient transactions. Below, we have defined several of the most common terms. 

1. Limit 
A limit order is commonly used to enter or exit markets at a specified price or better than the market price. In addition, a limit order allows the trader to manage the length of time that the order is current or outstanding before it is canceled. 

2. Stop if Bid 
A Stop if Bid order is used to buy or sell a currency is the Bid price breaches the specific level in the price field. Typically, Stop if Bid orders are used to buy a FX position in order to make sure a certain level is broken. 

3. Stop if Offer 
A Stop if Offer order is used to buy or sell a currency is the Ask price breaches the specific level in the price field. Typically, Stop if Offer orders are used to sell a FX position in order to make sure a certain level is broken. 
Linking orders offers traders a logical aggregation of order types that outline contingencies in market participation, making it much easier to trade in moving markets. 

4. One Cancels Other (OCO) 
This most common linked order, OCO, stipulates that if one part of the order is executed, then the other part is automatically canceled. In FX trading, OCO often refers to a buy order and sell order linked together so that when one of the orders is executed, the other is canceled. Consider the OCO as follows: the trader protects an existing position from loss (stop order) and ensures that profits are taken (limit order). 

5. If Done (ID) 
These contingent trade orders, also known as slave orders become active only if the primary order is executed first. An example would be a working order to buy EURUSD at 1.2500 and a contingent order to sell at 1.2400 Stop if Bid – if the first order is done. 

6. Trailing Stop 
A Trailing Stop Order is a stop order that has a trigger price that changes with the spot price. As the market rises (for long positions) the stop price rises according to the proportion set by the user, but if the market price falls, the stop price remains unchanged. This type of stop order helps an investor to set a limit on the maximum possible loss without limiting the possible gain on a position. It also reduces the need to constantly monitor the market prices of open positions. 

7. Tom-Next 
Spot Forex positions are traded with a standard Value Date of 2 business days – the theoretical delivery date for the currency exchange if we were going to take delivery of a currency. For example, positions opened on Monday would have a Value Date of Wednesday. 

As we are speculating on Forex and not actually taking delivery (settlement), positions are never allowed to reach their Value Date and are 'Rolled Over' to a new Value Date instead. So if the position we opened on Monday is still open on Tuesday, it will be closed then reopened again immediately at almost the same market price with the new Value Date of Thursday.  
 
8. Spot Trades
A spot FX trade is an immediate execution of one currency against another at an agreed rate, settlement of which traditionally takes place two business days later. Finexo offers spot trading on streaming real-time prices for over 150 different currency crosses, with deep liquidity on the most liquid currency pairs. 
 
In the FX Trade module, if the Bid/Ask fields are highlighted green, then the platform is delivering a live-tradable price.
 
9. Forward Outright
A Forward Outright is a trade that will commence at an agreed upon date (in the future). There is no centralized exchange for Forwards and forward trading is often customized to meet the needs of the buyer and seller. Forward Outrights are expressed as a price above (premium) or below (discount) the spot rate. The forward FX price is the sum of the spot price and the margin. This price is a reflection of the FX rate at the forward date where if the trade were executed at that rate there would be no profit or loss. 
 
 
What are PIPS?
 
Currencies are quoted using 5 significant digits. The last digit, called a "pip", represents the smallest potential move in an exchange rate, and is very similar to ticks or points in other financial products. In the example below, a 10 pip increase in the Ask price would result in a quote of 1.2287. Likewise, a 10 pip decrease in the Ask price would result in a quote of 1.2267. Half-pips are a more recent development offering traders even tighter spreads and more competitive and transparent accuracy in pricing. When trading foreign exchange, the value of a pip is dependent on two variables – the amount of currency and the currency pair. 
USD Value of a Pip 

Below, we have calculated the US Dollar value of a 1 pip movement for some of the more frequently traded currency pairs. Please note, all values are calculated using 100,000 units of the base currency (the left-hand currency in the pair). 

EURUSD USD 10.00 
USDCHF USD 8.00 
USDJPY USD 9.06 
GBPUSD USD 10.00 
USDCAD USD 7.92 
AUDUSD USD 10.00 
EURCHF USD 8.00 
EURJPY USD 9.06 
EURGBP USD 17.98