Invest in Forex?

Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world's currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion. All the world's combined stock markets don't even come close to this.

Pairs

All forex trades involve two currencies because you're betting on the value of a currency against another. Think of EUR/USD, the most-traded currency pair in the world. EUR, the first currency in the pair, is the base, and USD, the second, is the counter. When you see a price quoted on your platform, that price is how much one euro is worth in US dollars. You always see two prices because one is the buy price and one is the sell. The difference between the two is the spread. When you click buy or sell, you are buying or selling the first currency in the pair.

Trading on a Margin

If prices are quoted to the hundredths of cents, how can you see any significant return on your investment when you trade forex? The answer is leverage.

When you trade forex, you're effectively borrowing the first currency in the pair to buy or sell the second currency. With a US$5-trillion-a-day market, the liquidity is so deep that liquidity providers—the big banks, basically—allow you to trade with leverage. To trade with leverage, you simply set aside the required margin for your trade size. If you're trading 200:1 leverage, for example, you can trade £2,000 in the market while only setting aside £10 in margin in your trading account. For 50:1 leverage, the same trade size would still only require about £40 in margin. This gives you much more exposure, while keeping your capital investment down.

But leverage doesn't just increase your profit potential. It can also increase your losses, which can exceed deposited funds. When you're new to forex, you should always start trading small with lower leverage ratios, until you feel comfortable in the market.

Trade Currencies with BinckBank

All-inclusive spreads are as little as 0.4 pips on major FX pairs, and you can trade with up to 50x leverage.

Our order-driven model results in higher fill-rates, fewer premature stop-outs, and significant price improvements.

Fast and reliable access to the markets from your phone, tablet, laptop, or multi-screen desktop setup.

Professional support whenever markets are open, including technical assistance, market analysis and access to personal sales traders.

Risks

The information on investment products is for general information and is not intended as an advice. In spite of the fact that Binckbank takes care of the compilation and maintenance of these pages, using sources deemed reliable Binckbank can not guarantee the accuracy, completeness and actuality of the information provided. If you use the information provided without verification or advice, do so for your own account and risk. We advise you to always check any transactions and not to invest in financial instruments that you do not understand the risks. No rights can be derived from the information on these pages.