Trade Forex CFDs with Global Trade

Forex trading (also known as foreign exchange, currency, or FX trading) is the global market for exchanging one country's currency for another. It is the backbone of international trade and investment: the import and export of goods and services; financial transactions by governments, economic institutions, or individuals; global tourism and travel—all of these require the use of capital in the form of converting one currency to another.

When trading Forex CFDs, you are essentially speculating on exchange rate movements. For example, in the EUR/USD currency pair, the value of one Euro (EUR) is determined by comparing it to the US Dollar (USD), and in the GBP/JPY pair, the value of one British Pound Sterling (GBP) is quoted against the Japanese Yen (JPY).

If you believe the exchange rate will rise, you can open a 'Buy' position. Conversely, if you believe the exchange rate will fall, you can open a 'Sell' position.

To learn more about Forex trading, read our article on What is Forex, and to view the complete list of currency pairs offered by Global Trade, click here.

Exchange rates are influenced by a range of political and economic factors related to the value differential between one currency or economic region and another country's currency, such as the US Dollar (USD) versus the Offshore Chinese Yuan (CNH), which are the currencies of the world's two largest economies.

Factors affecting exchange rates include terms of trade, political relations, and the overall economic performance of the two countries or economic regions. This also encompasses their economic stability (e.g., GDP growth rate), interest rates and inflation rates, production of goods and services, and balance of payments.

To learn more, check out our article on Which Events Affect Forex Trading, and use our Economic Calendar to find real-time data on various events and news releases impacting the Forex market.

The 4 main differences between trading Forex and stocks are:

• Trading Volume – The Forex market has a larger trading volume than the stock market.
• Instrument Diversity – There are thousands of stocks to choose from, while there are only dozens of currency pairs.
• Market Volatility – Stock prices can fluctuate dramatically daily, and they are generally more volatile than the Forex market.
• Leverage – The leverage offered by the Global Trade platform for Forex CFDs is 1:20, while for stock CFDs it is 1:10.

Please note that when trading Forex or stock CFDs, you do not actually own the underlying instrument but are trading on their expected price movements.

Forex trading involves several risks that you should understand before opening a position. These risks include:

• Risks related to leverage – Trading with leverage can lead to larger losses (as well as potentially larger capital gains) under volatile market conditions.
• Risks related to the issuing country – The political and economic stability of a country/region can affect the strength of its currency. Generally, currencies of major economies have greater liquidity and are usually less volatile than those of developing countries.
• Risks related to interest rates – A country's/region's interest rate policy has a significant impact on its exchange rate. If the country's/region's interest rates rise or fall, its currency will typically appreciate or depreciate accordingly.

We offer risk management tools to help you minimize your trading risks.

If you are ready to start trading Forex with Global Trade, click here.