Introduction to Forex Trading

Among the commodities most often traded in global markets, crude oil occupies a special niche. Moreover, it is possible to trade not only crude oil, but also any other products based on it (such as gasoline, diesel fuel, plastics, etc.), as well as oil futures, options, CFDs, ETFs, etc.

Surely many traders are familiar with such concepts as "scalping", "to scalp", "scalper". In this article, we are going to reveal the basic principles of scalping, the advantages and disadvantages of this trading strategy, as well as the methods of its implementation. Let us recall that this article is for informational purposes only and does not encourage the choice of a particular style of trading.

One of the most popular types of trading, both among beginners and experienced traders, is medium-term trading, which is called sometimes swing trading (from “swing” – fluctuation, change, rhythm). Swing trading was first described in detail in the 1950s by American trader G. Douglas Taylor in his work "The Taylor Trading Technique". Modern traders call “swing” a certain period of time during which a market position remains active within a single swing/fluctuation.

Intraday trading (also known as day trading) is a form of short-term trading. Its distinctive feature is the opening, holding, and closing of transactions within one day without transferring them to the next day. Intraday trading thus reflects a time frame of transactions rather than a specific strategy. In this article, we will consider the basics of intraday trading, its advantages and disadvantages, the most commonly traded instruments, the skills a trader needs, and many other nuances.

Gold is in fact the most traded and popular precious metal on the commodity market. It is a very attractive investment due to many factors; for example, traders invest in gold to diversify risks, gold is the most stable safe heaven in the majority of countries, markets offer various ways of investing in gold even without owning the yellow metal physically, etc.

Knowing which stocks are the most actively traded informs investors about a security's liquidity, understanding market sentiment for a company, and the likelihood of a price going up or down. Therefore, it is wise to keep an eye on stocks that have the highest trading volume on the stock exchange.

Canada is included in the group of seven leading countries with a developed market economy and is among the leaders in terms of living standards.

Intraday trading stocks (Day trading) is short-term transactions on the exchange market. The very name of this strategy - Day Trading, or intraday trading - indicates that the strategy uses transactions carried out within one day without transferring transactions to the next day.

Despite the development of renewable energy production, fossil fuels still make up the majority of the world's energy consumption, and oil is the most used source of energy.

The central theme for 2023 global economic outlook was the likelihood of achieving soft landings for developed economies against the background of synchronized rate hikes by central banks.

Forex market participants mainly are commercial banks executing orders from exporters, importers, investment institutions, insurance and retirement funds, hedgers and private investors. Commercial banks also perform trading operations in their own interests and at their own expenses. Daily turnover of the largest banks often exceeds several billions of U.S. Dollars and many make their main profit by speculative operations with currency.

Forex is not a roulette because in the core of currency price fluctuations there are certain principles. First of all, currency price depends on its country's economic performance. Secondly, it is linked to preferences and expectations of Forex players. It is all a subject of prognosis which is proved by market analysis containing objective factors rather than casuality.

Typical transaction volume in the interbank trading estimates millions and even billions of US dollars. The participants of the interbank market include banks and their clients - the largest multinational corporations, hedge funds and private investors. Thus, it is evident that the transaction volumes on this market are too high for the majority of private investors.

For residents and citizens of Canada, buying Canadian shares can be done through a reputable regulated Canadian stockbroker or an international multi-asset broker such as IFC Markets.

The Toronto Stock Exchange (TSX) is one of the top 9 global stock exchanges in terms of total capitalization of companies listed on the exchange. The TSX is the third-largest in North America after the New York Stock Exchange and the Nasdaq.

Day trading differs from other forms of stock trading and investing in that it involves holding securities for only a single day. Engaging in day trading can be risky and stressful, particularly if one is unprepared.

Leverage in Forex is the ratio of the trader's funds to the size of the broker's credit. In other words, leverage is a borrowed capital to increase the potential returns. The Forex leverage size usually exceeds the invested capital for several times. Leverage is the most commonly used tool in trading and it will help you better understand "What is Forex trading and how does it work" all about.

Bitcoin represents itself a digital currency invented in 2009. Satoshi Nakamoto is the person behind the creation of Bitcoin whose identity has not been confirmed yet. The present market cap for bitcoins available for use surpasses $134 billion. Bitcoin guarantees lower charges for transactions than online payment systems and is controlled by a decentralized authority.

Margin trading is speculative buying and selling of assets using a brokerage firm's funds, which it lends against collateral.

A currency pair is always quoted in two prices: Bid for sale and Ask for purchase of a base currency for the quote one.

Spread is the difference between Bid and Ask prices. It is calculated in pips. You can read more detailed about pip in our article "What is a pip in Forex". Spread could have a significant impact on the profitability of the trades.The size of the spread is an important factor during trading, because high spread results in a significant share of loss to the client during active trading.

Forex Trading terminology is an integral part and every beginner trader should learn it, if haven't by now.

Swap (Forex Rollover) is a charge or interest for holding trading positions overnight to the next forex trading day.

An example of Swap calculation for the currency pair AUDUSD with a transaction volume of 1 lot (100 000 AUD) and current exchange rate 0.9200.

Each trading operation results in either profit or loss the calculation of which is performed automatically in the trading platform server. However, it is useful to know how this calculation is formulated. There are 3 important things to consider during the calculation: the volume of the opened position, the asset quotation and the direction of the position (Buy/Sell).

Stock market indices are indicators of the dynamical state of the security market. By comparing current market index value to its previous values it is possible to estimate the market behavior, its reaction to macroeconomic changes and corporate events (mergers, acquisitions, etc.).