Forex (Foreign Exchange) - currency market available 24 hours a day (excluding weekends). Forex is a market where the interests of financial institutions, investment banks, central banks and individual investors converge. Its daily turnover is estimated at around USD 6,6 trillion.
Over the Counter (OTC) - Forex is a decentralized market that does not have a unit supervising all trading.
Forex brokers - Intermediaries in exchange transactions, thanks to which we get access to trade on the currency market and derivatives. There are several models in which forex broker can operate: ECN, STP, Market Maker, MTF and NDD. Depending on the model, our transactions can be carried out at market price or with immediate execution.
ECN / STP broker - It is an intermediary who is not the other party to the transaction and its purpose is only to associate two opposing orders. Thanks to this, there is no conflict of interest, and the ECN model itself is extremely desirable by traders. A list of the most popular ECN brokers is available here.
Ranking of Forex brokers - The wide variety of brokers offers makes it difficult to choose one ideal company that will meet the needs of every trader. Each broker can offer a different way of executing orders, different trading instruments, as well as transaction platforms and deposit methods. Listings are helpful, thanks to which we can easily find an offer that meets our expectations to the greatest extent.
Financial leverage - In other words, leveraging is a mechanism that allows us to invest much larger sums using only part of the capital. A leverage of 1: 100 on your account means that you only need $ 10 to invest $ 000.
Forex volume - The volume of a single transaction is most often expressed in flights. 1 lot means 100 units of the base currency. The base currency is always the first currency in the pair. For example: for USD / PLN the base currency is the US dollar. 000 lot on USD / PLN is a transaction worth 1 USD.
Pips / point - Pips is a change in the exchange rate of the currency pair, usually calculated to 4 decimal places (e.g. 1,2301). The value of one pip depends on the financial instrument and the volume used for the transaction. A point is usually the value shown in fifth place after the decimal point (e.g., 1,23015).
Spread and commission - transaction costs vary depending on the broker, the instrument and its market liquidity. The market spread on the most liquid EUR / USD pair usually fluctuates within 0,0 - 0,3 pips. In the case of the ECN and STP model, a commission depending on the set rate is added separately. When trading with NDD brokers and Market Maker, the only cost is variable or fixed spread. A typical spread for EUR / USD is around 0,8 - 1,8 pips
CFDs - Forex brokers offer on so-called CFD contracts based on instruments such as currency pairs, stock indices, precious metals, oil, natural gas, cryptocurrencies (e.g. bitcoin), as well as stocks and bonds.
CFDs and futures contracts (futures contracts) - The advantage of CFD is higher leverage and (theoretically) unlimited liquidity. They also have disadvantages - they usually have a higher commission and do not offer access to the depth of the market.
Forex platform - Platform, or software that our broker gives us access to. This is the application on which we conclude our transactions and we can monitor the market situation on the charts.
MetaTrader4 (MT4) - The most popular trading platform among retail traders. It is famous for its reliability, speed of operation and intuitiveness.
MetaTrader5 (MT5) - The younger brother of the popular MT4 platform. Although it seems almost the same, it offers much more and is much more advanced.
Stock indices - Indexes are the most popular trading instrument for Forex brokers, right next to currency pairs. High volatility, low transaction costs and satisfactory liquidity - this is an environment that creates good conditions for earning. The most popular index for trading in Europe is German DAX.
Petroleum - "Black Gold", a strategic raw material that is characterized by high volatility and strong trends. This is one of the most popular instruments used for investor speculation.
Gold - Precious metal, seen as a good investment for "hard times". Along with silver, it is an asset that often becomes more expensive in times of financial crises.
Cryptocurrencies - Cryptographic currencies based on blockchain technology. There are currently over 4000 virtual tokens in the world.
Bitcoin - Hailed as "King of Cryptocurrency". The most popular virtual token, thanks to which the cryptocurrency market flourished. The frantic course rally in 2017 brought an increase in BTC from USD 1200 to USD 20.
Technical analysis - Different chart analysis. It is based on observation and price analysis from various angles. For information processing, the investor most often uses candle or bar charts and analytical tools such as AT indicators (e.g. RSI, MACD, MA), Elliot waves, Fibonacci tools, Gann theory, Price Action, as well as Japanese technique Ichimoku.
Fundamental analysis - It is definitely less popular in the Forex market. Its assumption is the analysis of macroeconomic indicators such as interest rates, monetary policy of central banks, unemployment rate, GDP and all political and economic events concerning the economy of a given country.
Forex Strategies - We distinguish four main types of trade: day trading, scalping, swing trading and long-term trade. Some also count news trading (trade for macroeconomic data) but it is also a form of scalping.
ETF - Exchange Traded Funds are the so-called publicly traded passive investment funds. Their goal is to reproduce the movements of a given index, stock group or industry as faithfully as possible.
Social trading - Social investment is an alternative way of trading on the Forex market, consisting in copying the plays of other investors. Popular platforms famous for social trading are eToro i ZuluTrade.
Passive Investing - Investments based on the so-called a passive portfolio, i.e. a set of assets that allows you to follow trends on the broad market in the long term. Most often it relies on index funds and ETFs.
Investing on Forex and risk - Each form of investing money involves a certain risk. In the case of the Forex market, most often the risk results from an inadequate level of knowledge and insufficient investor preparation. Understanding the key mechanisms operating on this market is the bare minimum.
Forex demo account - A demo account helps in learning, which is completely free and allows you to invest virtual funds on real courses without any delay. Mastering the platform on the demo account must be considered the absolute first step before speculation on the real account. Let us remember that the risk depends primarily on us and the investment decisions we make.

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CFDs are complex financial instruments that use leverage. There is a significant risk of losing capital as prices can move sharply against you and you will need to make further payments to keep your positions open. Between 72% - 89% of retail investors lose money when trading CFDs. These products are not suitable for all customers, so please consider whether you fully understand the risks involved and, if necessary, seek independent advice.
Disclaimer.