Here, we would like to mention some of the reasons why trading in the Spot Forex market is much more advantageous in other markets:
What is the Spot FOREX Market?
The Foreign Exchange Market is a decentralized, over-the-counter (OTC) market, open 5 days a week from Sunday midnight to Friday midnight, 24 hours a day, covering the whole world from Tokyo to London.
Although the FOREX market is decentralized, so there is no center than most traditional stock exchanges, nevertheless, the 24-hour market is divided into three zones, so we can talk about the Asian, European and American sessions.
Within this, we have distinguished four major cities in Tokyo, Sydney, New York, London.
In general, participants trading on the FOREX market are traded in these cities during their working hours.
It is therefore important to know these time zones.
Read more about FOREX market time zones here.
Following the disappearance of the exchange rate fixed by the states, Spot FOREX, a floating-point market, was established in 1973.
The floating accurate price display made it possible for the Spot Forex market in its present form to speculate on the relative value of the currencies of the different countries.
(With currency pairs it is also possible to trade on option and futures markets).
The information on our website covers only the Spot FOREX market, where the buying and selling of foreign currency pairs is immediately completed, our website does not deal with option and futures trading.
For more information on the FOREX market, please visit Wikipedia.
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What is the size of the Spot FOREX market?
The estimated daily turnover of the market is USD 5.3 trillion, which is four times the annual GDP of the world.
Fifty-three times higher than the New York Stock Exchange, twelve times higher than the futures market, twenty-seven times the world's stock market.
It is the world's most liquid and largest daily market.
The Forex market has nearly 170 pairs of foreign currency, but only 5% of the currency pairs that account for 80-90% of total daily turnover, these are the EURUSD, USDJPY, AUDUSD, USDCAD, GBPUSD, NZDUSD, GBPJPY, EURJPY, AUDJPY, EURGBP, USDCHF pairs.
(We are therefore developing our automated trading robots only for these currency pairs).
The advantage of high liquidity is fast execution of orders, low slippage and low spreads.
You can read more about the size of the FOREX market and the turnover of foreign currency pairs through the BIS research materials.
The daily turnover of the market and the number of traders and investors are increasing year by year.
Who are trading on the Spot FOREX market?
The market has countless players, accounting for 95% of annual turnover.
It is made up of national banks, commercial banks, investment banks, brokerage firms, fund managers and businesses.
The remaining 5% are retail (private) traders.
All players participate in the market with different intentions.
Some have investment intentions for some speculation and some are
"I want to avoid the risks of exchange rate fluctuations," and therefore use the market for hedging.
When can I trade on the Spot FOREX market?
Since the FOREX market is available 24 hours a day, 5 days a week, it is divided into different time zones and countries for trading.
Market opening hours are as follows (GMT) time zone:
United Kingdom (London): 08:00 to 16:00
United States (New York): 13:00 to 21:00
Australia (Sydney): 22:00 to 06:00
Japan (Tokyo): 00:00 to 08:00
To calculate a custom time zone, visit the Forex market hours page.
How to trade on the Spot Forex Market?
As a private individual, ie as a retail trader, trading takes place through a broker company.
There are hundreds of brokerage companies in the world that offer the opportunity to trade on the Spot FOREX market.
The world's most popular retail trading interface is currently MetaTrader 4.
This trading interface is available for PC, Mac, tablet, android, iPhone devices.
Without risking real money, you can try / practice trading, you need to open a demo account.
You need to open a live account to trade with real money.
The minimum capital requirement for trading is usually 100 units, but you should start with a minimum of 500 to 1000.
The account can be opened in USD, CHF, EUR, JPY, AUD, CAD currencies.
Leverage varies by continent due to regulatory laws.
There are usually several options available from 1: 1 to 1: 1000 depending on the country in which the broker company is regulated and what the laws allow. In general, brokerage firms operating in offshore countries have a leverage of more than 1: 100.
We have the opportunity to trade currency pairs with a limit and market order in Long and Short.
The trading size is called LOT, from 0.001 up to 100 LOT's you can buy or sell a trading position.
Nano Lot = 0.001 LOT = 100 units of the base currency pair (very few brokerage firms apply).
Micro Lot = 0.01 LOT = 1000 units of base currency pair
Mini Lot = 0.1 LOT = 10,000 units of the base currency pair
Standard Lot = 1.0 LOT = 100,000 units of the base currency pair
Nowadays, the price of 5 decimals is used to price the currency pairs, but sometimes we can run into 4 decimals.
If the currency display is 5 decimals, then the value is 5 after the point, for example EURUSD exchange rate 1.35110, for USDJPY 92.110
If there are only four values after the point, for example EURUSD's exchange rate is 1.3511, for USDJPY it is 92.11, then four decimal places.
If you find it exciting and want to take part in trading on the Spot FOREX market, but you don't know how to get started,
click on Trade at FxPro!
Is there a Forex Holy Grail?
Yes it exists, it's called diversification!
There are countless gossip on the Internet about the Forex Holy Grail system.
Every trader is looking for the Holy Grail, a strategy or a robot that shreds the money from 0 to 24 hours with minimal risk.
The good news is that there is a Holy Grail, and we have found it!
The Forex Holy Grail is the diversification i.e. Portfolio trading.
In order to achieve the highest return with less risk, it is essential to think in a portfolio.
Put together stock's or currency pair's in a portfolio that has a relative movement very low, i.e., their correlation is between 0 and -1.
You can make portfolio systems in two way:
One way, is to generate multiple strategy on one asset, which has low correlation for each other.
Second way, is to generate multiple strategy on multiple asset, which has low correlation to each other.
You can read more about diversification on Wikipedia.
Our primary goal is to drive the 80% losing FOREX dealers to the 20% profitable retail trader camp.
An average FOREX trader can see a vicious circle that keeps the 80% losers inside.
This devil-circle looks like this:
1. Account Opening, 2. Capital Deposit, 3. Strategy developing, 4. Lose your capital, and then begin with the whole process of the second point.
Each time you do not have a credible, profitable, robust trading strategy, you will permanently capture your losing capital until you find the right and profitable trading system for you!
In the FOREX market, it can be said that 70-80% of traders produce continuous losses for years.
Your trading accounts will be replenished quarterly, semi-annually by
$1,000 to $5,000, and will lose your capital entirely after 6 months on average. Under a law, American, Australian, and European brokerage firms must indicate at the bottom of their website how many percent of their clients are at a loss. So now, it's no secret. Below you can find pictures of some broker companies.
Only 20-30% of the retail trader population are able to remain profitable in the market over long term, over the years.
In general, they have at least 8-10 years of experience with FOREX market, and 90% of them use automated FOREX systems, which is a big statistical advantage over laymen, intuition-based traders.
Be part of the 20-30% retail trader who has success, keep up with us!