George Soros’ enormous $10 billion short position against the British pound in 1992 still stands as the most famous single trade in history, as Soros profited over $1 billion when the British government was forced to let the pound to float freely. Today, the global foreign exchange is still the most liquid market in the world, with trillions of dollars, euros, yen and sterling flowing in and out of the currency markets on a daily basis, and there are opportunities to be had if you can accept the high risk of leveraged trading in a complex market.
But whether you’re new to the world of currency trading or a seasoned veteran, finding a reliable forex broker with a good track record should be your first priority. You’ll want to look at the features and benefits a particular broker offers its clients, such as customer support, trading education, spreads and commissions and more. In our yearly review, we researched the best forex brokers and trading platforms available in Europe right now. We looked at their services, trading platforms, fees, reputation, and much more to see which of the best forex brokers in Europe is worth it for you.
Best forex brokers in Europe for 2023
We annually conducts a thorough review of the top European foreign exchange brokers and trading platforms over the year. Factors we take into consideration include fees, deposit and withdrawal policies, the trading platform, and many other aspects. Based on our research, here are the best forex brokers in Europe:
- XTB – Best overall forex broker, best learning material
- Interactive Brokers – Lowest fees, best for advanced traders, most trusted
- Avatrade – Best mobile & web trading platform
- eToro – Best for beginners, best for cryptocurrencies & copy trading
- Fusion Markets – Best for MT4/MT5 trading
XTB
Recommended for: Combining investing and active trading
85% of retail investor accounts lose money when trading CFDs with this provider
Interactive Brokers
Best for: Long-term investors, most investment products
Avatrade
Recommended for: Mobile and web CFD trading
76% of retail investor accounts lose money when trading CFDs with this provider.
eToro
Recommended for: $0 commission stock trading, great for social trading & cryptocurrencies
79% of retail investor accounts lose money when trading CFDs with this provider.
Fusion Markets
Recommended for: MT4/MT5 trading, serious trading
74-89% of retail investor accounts lose money when trading CFDs with this provider.
The TL;DR version
- XTB routinely ranks among the top forex brokers in Europe among independent reviewers thanks to its affordable fees, reasonable spreads, and extensive selection of trading instruments. Furthermore, the broker’s proprietary trading platform has recently undergone an overhaul to make it more user-friendly. For both beginners and seasoned trades, it’s a versatile and powerful choice.
- Interactive Brokers is a favored choice for long-term investors and active traders from all walks of life. For seasoned and high-volume traders, its minimal costs, sophisticated trading platform, and unparalleled access to the worldwide markets make it a top pick. The broker’s advanced offering may not be ideal for new traders, but for over 40 years, it has remained the go-to option for those preferring a high-quality and dependable service.
- Avatrade is one of the most trusted players on this list and is making waves due to its powerful technology and excellent customer service. The broker offers several different types of accounts, including some with no deposit requirement at all.
- eToro is a popular online broker known for its zero-commission stock trading and copy trading features. The broker’s platform is user-friendly and includes an innovative social trading component, which allows traders to automatically mimic the trades of other traders. For professionals, it’s not an obvious choice, but it’s a great starting place for beginners to learn the ropes before heading to higher levels.
- Fusion Markets is a well-known Australian forex broker that is known for its competitive pricing, with some of the lowest per-lot fees in the industry. It’s a MetaTrader-only broker, which means beginners should look elsewhere. Experienced traders, however, will rejoice at Fusion Markets’ low fees and zero-fee US stock CFDs. For traders, Fusion provides the ultimate trading experience.
Overview
| Broker | Products | Regulators | Spreads & Fees | Forex pairs |
|---|---|---|---|---|
| XTB | Stocks, ETFs, CFDs on Indices, Commodities, Forex, and Cryptocurrencies | CySEC, FCA, KNF, CNVM, and IFSC | From 0.10 | 48 |
| Interactive Brokers | Stocks, ETFs, Options, Futures, Forex, Commodities, Bonds and Funds | FINRA, SIPC, SEC, CFTC, IIROC, FCA, CBI, AFSL, SFC, SEBI, MAS, MNB | From 0.1 pip and tier pricing commission | 100+ |
| AvaTrade | Stocks, ETFs, CFDs on Indices, Commodities, Forex, and Cryptocurrencies | FCA, ASIC, IIROC, BVI FSC, CBI, FSCA, FSP | $0, but spreads starting 0.9 pip apply | 55 |
| eToro | Stocks, ETFs, CFDs on Indices, Commodities, Forex, and Cryptocurrencies | FCA, CySEC, ASIC | $0, but spreads starting 1 pip apply | 45 |
| Fusion Markets | ETFs, Stocks and CFDs on Commodities, Forex, and Cryptocurrencies | FCA, CySEC, ASIC | $0, but spreads starting 1 pip apply | 45 |
A detailed look at the best forex brokers in Europe
You need to find a trustworthy forex broker that will give you access to all the currency markets. You’ll want one that offers competitive spreads and round-the-clock trading opportunities so you can trade 24 hours a day, five days per week. From our list below, select one or two reputable brokers for their high volume execution rates and ultra-low commissions, as well as their top-tier customer service reviews from industry experts. Once you have selected your preferred brokerage account, you should start with a demo account and decide your risk-appetite from there.
XTB – Best overall
Spreads: EURUSD: 0.10 pips; EURGBP 0.20 pips; GBPUSD 0.20 pips; FTSE100 CFD 1.1 pts; S&P 500 CFD 0.60 pts; Europe 50 CFD 2.20 pts
Fees: Spread-only (retail clients), commission-based (professional clients); inactivity fee (after 12 mo.); overnight financing costs
Why we picked it
XTB remains our top pick for the best forex broker in Europe this year also. While XTB is gaining momentum among regular investors thanks to its offering of commission-free stocks and ETFs, XTB is the top choice for traders looking to trade forex and CFDs due to its competitive pricing, innovative xStation 5 platform, and wide range of tradable products. Thanks to its publicly traded status and licenses in multiple jurisdictions, XTB is a trusted and secure option for traders.
XTB also offers excellent customer service and comprehensive learning resources, making it a great choice for traders of all levels, including those who are just getting started. Lastly, the XTB app and demo account options allow traders to easily access the platform and test out strategies on the go or with virtual funds.
Pros and cons
Highlights
Things to keep in mind
What you need to know
Stock and forex CFD trading fees at XTB may be slightly higher compared to what other brokers offer. For cryptocurrencies, spreads start at just 0.22%, which hard to find anywhere else. The proprietary xStation 5 platform, while user-friendly and packed with features, and while excellent for beginners and intermediaries, may not be as comprehensive as some other options on the market. However, XTB also offers both MT4 and MT5 options for traders as a remedy, as well as the ability to engage in scalping and copy trading on MetaTrader.
XTB was founded in Poland and is subsequently registered with the Polish Financial Supervision Authority. XTB is considered reliable because it’s listed on the stock exchange (the Warsaw Stock Exchange to be specific) and is regulated by the FCA, a top-tier financial authority. UK residents should note that cryptocurrency trading at XTB is not available to them anymore due to FCA restrictions.
Depositing and withdrawing offer a very streamlined experience, with support for five base currencies, EUR, USD, GBP, HUF, PLN, and several account funding methods, including bank transfer, SafetyPay, Skrill/PaySafe, BlueCash (only available for Polish accounts), Credit/Debit card, and PayPal.
Who it’s for
For traders of all skill levels, from rookies to seasoned pros, XTB is a fantastic option. The broker is a leading choice for forex and CFD trading due to its low pricing, cutting-edge xStation 5 interface, and extensive selection of tradeable securities. For traders seeking flexibility and a variety of learning opportunities, the XTB app, demo account, and extensive training tools make it a good alternative. For traders wishing to get started or expand their portfolio, the broker’s minimal minimum deposit requirement and a variety of bonus opportunities also make it a desirable alternative.
Interactive Brokers: Lowest spreads and best for advanced traders
Spreads: Spot forex commissions start at 0.00002 (0.2 basis points) per trade, with a minimum charge of $2 per order. High-volume traders can access a reduced rate of 0.08 basis points. Spreads are not public, but for the EUR/USD pair, the average after commissions sits at around 0.6 pips.
Fees: No mark-ups, direct interbank rates, commissions from 0.20 to 0.08 basis points. Example for the lowest tier: USDEUR 1,000,000 trade * .00002 = USD 20 in commissions; overnight financing costs for CFDs on forex.
Why we picked it
Interactive Brokers (IBKR) continues to be the best choice for advanced and global traders because there isn’t any other brokerage that offers the same level of market access and advanced trading technology. IBKR provides access to more than 100 spot currency pairs, CFDs on 85 currency pairs, interbank quotes, and, most importantly, unbeatable tight spreads as narrow as 1/10 PIP. In addition, with its industry-low commissions starting at just 0.08 to 0.20 bps times trade size, without any hidden spreads or markups, IBKR offers a competitive and transparent pricing package that can’t be found anywhere else.
This, combined with deep liquidity and real-time quotes from 17 of the world’s largest FX dealers, allows traders to have confidence in the accuracy and reliability of their trades, and ultimately sets its miles apart from the competition in the category of brokerages suitable for sophisticated traders. Finally, IBKR’s flagship desktop platform, TWS and its powerful API gateway are highly regarded by institutional traders as some of the most cutting-edge forex trading tools available. If you want sophistication, there is no better choice out there.
Pros and cons
Highlights
Things to keep in mind
What you need to know
IBKR was founded in 1978 under the name T.P. & Co. by Thomas Peterffy, the first Nasdaq floor trader to utilize computer algorithms in the pit. In 1982, Peterffy incorporated his trading firm as Timber Hill Inc., an electronic market maker that would go on to become a member of multiple stock and options exchanges in the U.S. and Europe. In the 1990s, IBKR opened its doors to the retail segment with the first version of its Trader Workstation (TWS) platform, as well as the IB Universal Account, which allowed its clients to trade securities, currencies, and commodities in multiple currencies across the world markets from a single account. Today, IBKR is the only truly international brokerage out there with support for over 200 countries, including 44 European states.
IBKR hands down remains the best choice for sophisticated traders because of its global reach, versatile trading technology, and rich research capabilities. With over two million client accounts and $1.92 million in daily trade values, IBKR is a time-honored, publicly traded broker with incredibly strong financials. It provides access to 150 markets, including stocks, options, futures, currencies, bonds, funds, crypto, and more, and is supported in over 200 countries. Funding methods are available in 26 currencies, making IBKR the best international broker for traders who need a wide range of options.
The company’s time-tested flagship, the TWS, is widely regarded as the most versatile and professional-grade trading platform available to the public, with support for automated and API trading. The platform includes over 120 charting tools and overlays and over 100 order types and algos. TWS offers a range of features to support the needs of forex traders, such as technical analysis, social sentiment, fundamental research, and financial calculators. Its charting capabilities include a total of 128 indicators and studies, as well as 85 drawing tools that can be used to analyze and visualize market trends. TWS also includes the ability to trade directly from the chart, making it easy to execute trades on the spot. In addition, the watchlist can be configured with a total of 640 fields, which is more than plenty, even for institutional clients.
Who it’s for
Interactive Brokers’ Trader Workstation (TWS) is a beast of a platform for trading forex and financial derivatives, but its complexity may scare away novice traders. The TWS Users’ Guide alone is over 1,500 pages long and takes up 56.1 MB of space, which speaks to the sheer number of features and capabilities it offers. While the TWS may be a bit much for those who are just starting out in the world of trading, those who are able to tame it will have access to some of the most advanced tools out there, allowing them to trade currencies, stocks, options, and futures on over 150 markets worldwide.
If you’re an intermediate trader looking to bring your trading to the next level or tired of the limitations of the MetaTrader platform series, the TWS is also the natural choice. However, those who are seeking a more streamlined experience and more aesthetically pleasing user interface should consider other platforms.
For retail investors who want to dip their toes into the markets, Interactive Brokers offers the web-based Client Portal and the IBKR Mobile and IBKR GlobalTrader mobile apps. European customers are grouped under the IBKR Pro plan, which has a volume-based commission structure. This plan has low commissions with no added spreads, ticket charges, platform fees, or account minimums, and its SmartRouting feature helps ensure the best execution by searching for the best prices across different exchange venues. IBKR also offers competitive margin rates and the ability to earn interest on uninvested cash, with no fees to close or transfer accounts and no inactivity fees on any accounts. All of these factors make IBKR lead as the most exhaustive investment platform available.
Avatrade: Best for mobile trading and best for forex options
Spreads: Average spread of 0.90 pips for the EUR/USD pair or 0.60 for large accounts.
Fees: Overnight financing costs; inactivity fee after 3 mo.; administration fees in some jurisdictions
Why we picked it
AvaTrade is our top pick for mobile trading and forex options due to its best-in-class mobile app and 44 forex options, as well as over 1,200 CFDs in total. With licences in 9 jurisdictions, 16+ years of history, and negative balance protection in place, AvaTrade has its financial bases covered. In addition, AvaTrade offers unique social trading features and comprehensive educational resources.
What you need to know
AvaTrade is a seasoned player on the online brokerage scene, with over a decade of experience and offices spanning the globe. It was founded by Emanuel Kronitz and Negev Nosatzk in 2006. AvaTrade holds licenses in 9 financial centers, including its headquarters in Ireland, where it is regulated by the Central Bank of Ireland and is a member of the Investor Compensation Company DAC (ICCL). AvaTrade has around 400,000 registered traders, a monthly trading volume surpassing $70 billion, and around 3 million trades placed every month.
The broker offers a wide range of asset classes, including forex, forex options, and CFDs, as well as support for trading cryptocurrencies. One of its notable offerings, AvaOptions, is a comprehensive platform specifically designed for trading forex options. AvaOptions is unique in its use of charts to display option-chain data, which allows you to easily select the right contracts by simply dragging and dropping the strike prices. AvaOptions offers 14 default options-trading strategies and an order ticket system that is automatically populated with the relevant contracts. To our knowledge, there isn’t another forex broker that has managed to simplify the process of trading options better than AvaTrade.
Aside from the MetaTrader, AvaTrade has its own proprietary platforms, AvaTrade WebTrader and AvaTradeGO. These come with innovative features like AvaProtect, which helps traders hedge their bets and minimize potential losses. The platforms are digestible for new traders, with a wide range of technical indicators and drawing tools for charting and analysis. In terms of cost, the broker’s spreads are competitive, with an average spread of 0.90 pips for the EUR/USD pair (as of January 2023) for the regular account and around 0.60 pips for the professional account (which requires a portfolio of over €500,000). AvaTrade also offers mobile alerts and syncing watchlists with up to 6 fields, as well as a hefty 90 indicators and studies and 13 drawing tools for charting.
Who it’s for
AvaTrade is suitable for new and intermediary traders. Its user-friendly desktop platforms, well-made mobile app, free demo account, and extensive educational resources make it a good choice for those just starting out in the markets. Advanced traders, however, may find the platform to be somewhat lacking in sophisticated features. Despite this, AvaTrade’s wide range of tradable assets and competitive spreads make it appealing to more experienced traders as well.
eToro: Best for beginners, best for cryptocurrencies, and best for copy trading
77% of retail investor accounts lose money when trading CFDs with this provider
Spreads: Spread from 1.00 pip for the EUR/USD pair
Fees: Overnight financing costs; inactivity fee after 12 mo.; withdrawal fee; conversion fees;
Why we picked it
eToro repeats as our top forex pick for beginners, cryptocurrencies, and copy trading. eToro has made accessibility its key selling point with its focus on simplicity, both in its mobile and desktop design and in its range of products. eToro’s platforms are among the easiest to use, which makes the broker a great choice for new traders, while its selection of 52 cryptocurrencies and unique copy trading features make it a fantastic choice in these categories as well.
What you need to know
eToro is a global multi-asset brokerage founded by brothers Yoni and Ronen Assia in 2007. The company initially launched in Israel but has since grown to serve more than 20 million customers in 140 countries around the world, with offices in Europe, the U.S., and Asia. eToro is regulated by multiple financial authorities, including the FCA in the UK, CySEC in the EU, and AISC in Australia. Things took off in 2019 when eToro was the first brokerage in Europe to introduce 0% commission stocks, and most recently, it launched an e-money account.
Where eToro really shines for beginners and casual traders looking to get started is its elementary web platform and mobile app, which are easy to navigate and don’t have too much confusing clutter. The mobile app and web platform are nearly identical, and the consistency in design ensures that even green traders quickly feel at home. eToro also offers a risk-free $100,000 virtual account that allows users to learn the ropes before they commit real funds. A final boon to beginners is the various educational resources, including the eToro Academy, which has grown quite comprehensive and grown in quality over the years.
eToro’s platforms support trading in forex, equities, commodities and cryptocurrencies. Depending on your country of registration, 49 currency pairs can be traded, with a total of 3,458 tradeable symbols, as well as both physical and CFD trading in cryptocurrencies. 0% commission stock trades with the underlying asset are available to European users registered with the broker’s FCA or CySEC regulators. The offer only applies to non-leveraged trades.
As the platforms are primarily interesting for beginners, the technical tools available are quite limited in scope. In terms of charting, eToro offers 66 indicators and studies, 13 drawing tools, and the ability to display stock and index overlays. Watchlists and stock alerts are also available, and you can sync these across your devices. The platform does not support some of the advanced features pro traders would want, such as multiple time frames, trendlines on mobile charting, a forex calendar, or even the display of corporate events. There is no support for MT4 or MT5, which is understandable, but as forex stations, the native platforms do not adequately make up for the lack of integrations.
Who it’s for
eToro is best suited for beginner and casual traders looking for an accessible starting point that isn’t too confusing. The platforms have a modern feel to them and make it easy to trade shares and other products without getting lost in an ocean of technicalities. The copy-trading features of eToro can be helpful for those who want to observe and learn from others.
On the other hand, for experienced or active traders, eToro is not the best choice out there. The platform’s spreads are generally much higher than some other brokers, even twice as high in some cases, which can have a daunting effect on profits or losses for those who trade frequently. The platform also lacks features that more experienced traders would want, such as advanced charting and detailed research tools.
Risk warning
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
Fusion Markets: Best low-cost forex broker
Spreads: Average spread of 0.90 pips for the EUR/USD pair or 0.60 for large accounts.
Fees: Overnight financing costs; inactivity fee after 3 mo.; administration fees in some jurisdictions
Why we picked it
We picked Fusion Markets as the best forex broker for low costs because it offers some of, if not the, best spreads in the industry. Minimum spreads start at just 0.00 on a number of popular currency pairs during rush hour, and the average spreads are rock bottom, 0.02 for EURUSD, 0.05 for AUDUSD, 0.09 for GBPUSD, and 0.03 for USDJPY. For example, trading 1 standard lot of forex will cost just $2.25 per turn. These low costs make Fusion Markets a great choice for cost-conscious traders looking to maximize their profits.
Pros and cons
Highlights
Things to keep in mind
What you need to know
Fusion Markets is an Australian MT4/MT5 broker with a $2.25 per lot commission and spreads at a typical $0 during peak trading hours. Fusion Markets was founded in 2019 by Phil Horner, who has a background at AxiTrader and Pepperstone. The company is headquartered in Melbourne and is regulated by the Australian Securities and Investments Commission (ASIC).
Fusion Markets offers two account types to choose from: the Classic account and the ZERO account. The Classic account has the fees built into the spreads with no additional commission charges. The ZERO account offers tighter spreads, from $0, but does come with a $2.25 per lot commission charge. For a mini-lot, the commission will be 0.45c. Both accounts use different pricing models; the ZERO plan is designed for people who have traded before, while the Classic is for traders who are just getting started.
The range of tradable products includes CFDs on forex, equity indices, energy, shares, commodities, precious metals, and cryptocurrencies. In total, over 90 currency pairs, 18 stock index CFDs, 110 stock CFDs, 25 commodity CFDs, and 14 cryptocurrencies are available. One unique feature of Fusion Markets is their commission-free U.S. share offer, which lets traders trade CFDs on 110 companies with zero commissions.
Fusion Markets offers a range of options for funding your account, including Visa, MasterCard, PayPal, Skrill, Neteller, Fasapay, Jeton Wallet, Perfect Money, Online Naira, Doku, and various cryptocurrencies. The broker also accepts bank wire transfers and does not charge any deposit fees.
Who it’s for
Fusion Markets primarily caters to intermediate and experienced forex traders. The broker offers support for the popular trading platforms MT4 and MT5, as well as Myfxbook AutoTrade for social trading, but it doesn’t have its own proprietary, sleek-faced platform. There are no educational resources or other “extras” that beginners may find helpful to get started. It’s a bare-bone forex broker with no decorative bells and whistles. If those features aren’t important to you, Fusion is an excellent, no-frills, trading-only broker with an outstanding pricing structure.
How to choose a top forex broker in Europe
Jumping into the forex market without a plan can be incredibly intimidating due to its sheer size. Even more daunting is the idea of finding a forex broker for europeans you can trust. This is especially the case if you have no clue what you’re looking for.
Let’s look at what you should keep in consideration when choosing a top forex broker in Europe.
Risk of loss
Always be cautious when trading leveraged instruments such as forex as you could lose all of your money. If you are a beginner, make sure to practice with a demo account for a long time before using real money. If you think forex is too complex, trading stocks and ETFs might be more suitable for you.
Security
One of the most important characteristics of a trustworthy broker is that they have a high level of security. That means delving into their credibility to ensure you’re investing your money with someone you know that is reliable. Thankfully, it’s easy to conduct research on a broker to find the information you’re seeking.
There are many regulatory agencies located around the world that accurately separate trustworthy brokers from fraudulent actors. Never engage with a broker who is not a member of a respectable regulatory body.
Trading platform
Nowadays, the vast majority of trading takes place on a broker operated trading platform. As such, the more user-friendly the platform, the better. When looking at trading platforms, consider its features.
Does it offer easy-to-learn charting tools? Does it have a news feed to keep you up to date on the market?
Ultimately, the more user-friendly and feature-rich the platform, the less of a headache you’ll have to deal with later on down the road.
Deposit and withdrawal
A good European FX broker will make the process of withdrawing and depositing funds as hassle-free as possible. A broker’s job is to facilitate trading.
Therefore, they should not make it difficult for you to withdraw profits. A good broker should have a good reputation for helping clients to deposit and withdraw funds.
Transaction costs
No matter what currency you’re trading, you will always have to deal with transaction costs. You will either have to pay a commission or the spread (or both). As such, you should be on the lookout for the most affordable pricing.
As you’re searching for a broker, stay aware of what your transaction costs will be. For instance, you may need tight spreads for the type of trading you intend to engage in. The trick is to find the perfect balance between low transaction costs and security.
Customer service
No matter how good your broker is, customer service is always important. Customer service should do more than just answer your questions. It should also help you tackle problems that may arise at any given moment. A good broker will provide customer service with a smile, ensuring your experience is as smooth and streamlined as possible.
Good trade execution
If you want any hope of getting the best deals the market has to offer, it will behoove you to find a broker who’s well-known for employing good trade execution practices. This will guarantee that your trades will be filled at the best rates that the market has to offer. It also ensures that your trades will be made expeditiously.
Generally, you can choose from two different types of brokers — those who pass orders made by clients to the interbank market and those with dealing desks. The first type of broker will act as a middleman of sorts between you and the market, whereas the second type will interact with you directly.
Area of product coverage
In the past, you could only trade currency. Today, however, traders have a greater range when it comes to what they’re allowed to trade.
That’s why it’s important to find a broker who offers a wide range of product coverage, such as precious metals, cryptocurrency, bonds, stock indices, and forex, amongst many more. This will significantly increase your chances of making a profit at the end of the day.
Final thoughts about the best forex brokers in Europe
Forex is a massive market suitable for those who understand the risks involved. While there’s room to make a profit at high speed, there are plenty of pitfalls for those who jump headlong into the market.
We’ve looked at what the best forex brokers in Europe have to offer. It’s now time for you to do your own research and determine which broker offers the features you’re most interested in. From there, you can make your selection with confidence.
FAQ
What is forex trading?
Forex (FX) is a massive marketplace where a wide range of national currencies are traded. Forex is the most liquid market in the world, with trillions of dollars flowing in and out of the market every day. In 2019 alone, forex saw an average daily turnover of approximately $5.1 trillion U.S. dollars.
Who controls the forex markets?
The forex market does not have a centralized structure. Instead, it’s made up of an electronic network of institutions, banks, brokers, and individual traders. Entities that enter the market – be it a banking institution or an individual investor – tend to have specific currency needs, and as a result, may speculate on the direction that a particular pair of currencies may move.
These entities post their orders to either buy or sell currencies on the network, allowing them to interact with other currency orders from other entities.
When do forex markets close?
The forex market is open 24 hours a day, five days a week (not including weekends). If a particular country or if the global market is open for business, trading may take place during holidays.
Just how big is forex?
One of the unique aspects of the forex market is its massive size. Trading can span into the trillions daily. The largest of these markets are located in several of the most recognizable financial centres in the world, including Singapore, London, Hong Kong, Sydney, Frankfurt, and New York.
How does forex trading work?
The long hours of the forex market (24 hours a day, five days a week) makes it possible for investors to buy or sell currencies whenever they desire throughout the week.
When trading currencies in the forex market, it’s essential to understand that even though you’re buying or selling a particular currency relative to another currency, you won’t be exchanging physical money between parties.
Instead, you’ll be taking a position in a particular currency. The hope is that upward movement will occur in the currency if you’re buying, or weakness if you’re selling. Ultimately, your goal is to make a profit.
No matter what, one currency will always be traded relative to another currency. Meaning, if you sell one type of currency, you’re buying another and vice versa. The difference between your transaction prices determines profit (or how much you lose).
What are pairs and quotes in forex trading?
Trading currencies in the forex market are listed in pairs. Examples include the following:
EUR/USD
USD/CAD
USD/JPY
From the above example, you can see the U.S. dollar (USD) versus various currencies, including the Euro, the Canadian dollar, and the Japanese Yen, respectively. A price will be associated with each pair found in the market.
What are forex lots?
Currencies in the forex market trade in lots, which fall into specific categories, including micro, mini, and standard lots. Micro lots equate to 1000 worth of any given currency, a mini lot is 10,000, and a standard is 100,000.
What are currency pairs?
When a trade is placed in the forex market, the trade must be made on currency pairs. Currency pairs consist of two currencies, the first being the base currency and the second being the counter-currency.
What are exchange rates?
The exchange rate is the price of the base currency expressed in terms of the counter-currency. Should the exchange rate of a currency pair rise, that shows that the base currency is appreciating against the counter-currency or that the counter-currency is depreciating against the base currency. The reverse is also true.
What is a spread in forex?
With each trade you enter into, you will have to pay a transaction cost for that trade which is called the spread Today, the bid/ask spread is the highest cost that forex traders must contend with.
What is a pip in forex?
A “pip,” which is abbreviated from “Percentage in Point,” is the representation of the smallest increment that can shift either upward or downward. In most instances, one pip is the equivalent to the fourth decimal of the vast majority of currency pairs.
What is a pipette in forex?
Where pips represent the fourth decimal place of many currency pairs, pipettes represent 1/10 of a pip. As such, 10 pipettes equate to one pip.
What is meant by Bid/Ask price?
Currency pairs will have two exchange rates at any given moment, the bid price and the ask price. The bid price is simply the price where buyers are willing to buy, whereas the ask price is the price where sellers are willing to sell.
