Trading on Forex

Forex trading is one of the largest segments of the international financial industry. He is worth around 220 billion dollars per hour, a number that makes up the more than 5 trillion dollars he moves every day.

psi-markets is an online trading platform that offers the knowledge and technology you need to trade intelligently and efficiently. We provide immediate access to cutting-edge financial software based on the acclaimed MT4 (MetaTrader 4). You will also enjoy the full benefit of the expertise provided by our team of accredited account managers.

How does Forex trading work?

The value or “strength” of every currency in the world is in constant flux. Statistics on a country’s employment, its economic estimates or the decisions of its central bank, as well as international market sentiment and ongoing financial events, are just some of the many factors that value or devalue a currency.

In Forex, this movement up and down is relative to currency pairs, that is, two currencies that are listed on the foreign exchange market.

Currency pairs

Virtually every country in the world has its own currency, which means there are a large number of pairs. However, almost 80% of all Forex transactions involve seven (7) currencies: USD (US dollar), EUR (euro), GBP (British pound), JPY (Japanese yen), CHF (franc Swiss), the AUD (Australian dollar), and the CAD (Canadian dollar).

The foreign exchange market focuses on four (4) main categories among all possible combinations:

• Main pairs – These are combinations of the USD with the other six (6) currencies, most popularly: USD/EUR, GBP/USD, USD/JPY, USD/CHF and AUD/USD.
• Secondary pairs – These are Forex transactions between major currencies, with the exception of USD. The most common combinations of secondary pairs are: EUR/GBP, EUR/CHF, EUR/AUD and GBP/JPY.
• Exotics – An exotic pair is typically traded between one of the seven (7) major currencies and a minor currency of an emerging country. Some popular exotic pairs are: USD/MXN (Mexican Peso), USD/KRW (Korean Won), and USD/SGD (Singapore Dollar).
• Regional Pairs – As the name suggests, these are foreign exchange transactions made between geographically close nations. In Europe, they can be between EUR/NOK (Norwegian krone), while AUD/NZD (New Zealand dollar) is an example from Australasia.

Please note that there is no physical trading of any currency when you trade Forex with psi-markets. You are simply speculating whether the currency you buy will become stronger relative to the currency you sell. This is the meaning of a Forex CFD trading transaction.

Forex Trading Markets

It is possible to trade Forex full time and on 5 days of the week (from Sunday evening to Friday evening). This full-time trading opportunity is possible because there are four (4) main Forex markets spread across 4 time zones: New York, London, Tokyo and Sydney.

Within these markets, there are three (3) different categories of Forex trading:

• Spot Forex – The name here indicates an immediate or very fast transaction. Spot Forex involves the physical trading of currency pairs.
• Forex for future delivery – This type of transaction locks the buyer and seller into a fixed quote at a set point in the future. The quote and period are set by the parties involved and are normally not available to the public. It is unusual for there to be a negotiation of terms before the contract ends.
• Futures – Futures are a less rigid version of Forex for future delivery. They allow parties to continually update and modify the terms of the contract, making them quite volatile.

Leverage and spread in Forex

Forex for individual investors is almost always an OTC (over-the-counter) product, meaning it largely consists of spot Forex. It can be expanded to include other variants based on the value of your trading account with psi-markets.

psi-markets offers extraordinary access and versatility as we allow you to trade with leverage. Leverage is the factor by which we subsidize your initial investment when you enter a position.

You would need to deposit at least 50% of the trading amount if using a traditional trading account with a traditional broker, but at Uborkers your cost can be as low as 5% of the trading amount required for the position. This allows you to trade in much larger volumes than would otherwise be possible.

Leverage can increase or decrease depending on your trading history, transaction type and other factors. Please note that the spread is applied on all Forex transactions. It is the difference between the quotes of a currency pair currently practiced in the foreign exchange market and the numbers that are made available to investors.

For example, if the official GBP/USD quote is 1,350, you might receive a quote of 1,355 to buy and 1,345 to sell. The spread allows for certain fluctuations in the quote at the time you inform us of your intention to trade and in the quote at the time we obtain it from the market.

How to trade in the Forex market?

Many investors are reluctant to enter the markets because they think trading is complicated. It is definitely an advantage to have certain knowledge about how investments work, and psi-markets makes this even simpler.

At the heart of our trading is the MT4 platform. You can use it to find the price of a forex pair, calculate the profit you will make from a planned transaction, or speculate on futures.

The first step is to decide which currency pair you are interested in. This may depend on the price at which it is available compared to its price history and future projections. After making this decision, speak to your Forex trading company and inform them of the amount you wish to invest.

Some companies may allow you to purchase the currency pair on credit, using the leverage method explained previously. Please note that you may be subject to interest on the credit you have been granted.

In a spot purchase, all you have to do is wait for the value of the currency purchased to rise in relation to the initial price and the spread. You can capitalize on your investment when you believe the trend may turn negative. If the purchased currency falls below the initial value, you can wait for a reversal or suffer loss and exit the position.

In both cases, you will have to speak to your trading company to finalize the transaction. Your profits will be sent directly to your account. In case of a loss, you may have to transfer money to your account if your balance is not enough to cover the leverage.

Forex market psychology

Trading psychology is certainly as important as trading knowledge. The term is used to indicate your attitude and response to market changes that affect your investments. Good trading psychology is developed over time and consists of avoiding the following pitfalls:

Overconfidence or “I know the price will rise/fall”

This results from the error of projecting a smaller trend into a larger scenario without having evidence to do so.

Hope or “I will continue with this losing strategy in the hope that things will change”

It can be difficult to stop your losses, and it’s even more difficult as they grow.

Panic or “I’m already too committed”

Panic can pressure you to make drastic decisions in a hurry without considering better alternatives.

psi-markets USP

psi-markets is an online trading platform that allows you to trade Forex with currency pairs from all over the world. Our low fees and charges, as well as our tight spreads, open up the opportunity for you to trade with a competitive broker, even with a small financial investment.