The terminology Forex (Foreign Exchange) refers to the trading on international currency markets when buying of one currency by simultaneously selling another. Hence, currencies are always traded in pairs. The first mentioned currency in the pair is called base currency, while the second mentioned currency is called quote currency. In detail, there are always 2 trades done. If you assume of increasing markets on eurusd, you buy the currency pair (long), for example at 1,1400. Inside, there is a purchase of 1 EUR. At the same time 1,1400 USD are sold. When the pair eurusd increases to a price of 1,1600 and the eurusd is sold (short), you sell the previous purchased 1 EUR and buy 1,1600 USD. The price difference between 1,1400 and 1,1600 is the profit of the closed transaction, which is 2 cent in this case. If the currency pair dropped to 1,1200, you lost 2 Cent. This example shows you the profit and loss while trading 1 EUR against the USD. If you traded 1 standard Lot which always has the value of 100,000 of the base currency (here EUR), you would have won/lost 2,000 USD by a performance of 2 Cent.
Currency trading is becoming increasingly popular and offers some attractive benefits:
Largest capital market in the world
With a daily turnover of $ 4 trillion, the foreign currency trading market dwarfs all the other asset classes put together and is the most liquid financial market in the world. This liquidity makes it very easy as a dealer to enter the market at almost any time. GBE brokers Ltd only works with leading banks and liquidity suppliers.
Flexible Cash Investment
The opening of a forex trading account can be done online in a few hours. This type of investment is very flexible. There are no running times and you do not have any long term liabilities. You have access to all or part of your fund at any time.
Take profit from rising and falling prices
Forex trading allows you to speculate on both rising and falling prices. If you think that a currency will increase, then buy it (going long). If you however have the opinion that the price may fall, you sell it (going short). Positions in currency trading have no hold periods like stocks for example, which are traditionally kept for the long term.
Flexibility 24 hours a day, 5 days a week
The forex market allows you to trade 24 hours a day, five days a week. There is no daily opening and closing time. At the end of the virtual day, an account statement can be sent. In addition to the temporal component, the spatial one is extremely flexible. Wherever you are and no matter what time of the day it is, the mobile trading platforms from GBE brokers Ltd enable you to trade from anywhere you have an internet connection.
Low and transparent transaction costs
In forex trading, there are no commissions or trade-dependent fees, there is only the spread. With a turnover of e.g. € 100,000 the spread has counter value of just a few euros.
No account fees
No fees or expenses are charged by GBE brokers Ltd on accounts held.
The advantages of leverage
Due to the large liquidity of the forex market you can trade in multiples of your actual employment of capital. This is made possible by leverage. GBE brokers Ltd offers you the opportunity to leverage from 1:50 up to 1:200 for experienced traders, to profit from small market movements. Trading with leverage may also result to big losses.
No effect on trade
Currency trading is done OTC (over the counter) and exchanged between the various market operators. Trading takes place without interference and without any restrictions.
Forex – diversify your portfolio
Investors know they should not invest all their eggs in one basket. The need to diversify a portfolio into different asset classes is critical in today’s volatile markets. Use GBE brokers Ltd as a part of your investment portfolio.