What is Forex trading?

Forex, or FOReign EXchange, is the world’s largest financial market with an average daily turnover of over $5 trillion. You may have thought that trading was only for the financial elite, but if you have ever travelled abroad, the chances are that you have already participated in the market. In its most basic terms, Forex is the purchase of one currency in exchange for another.

Introduction to TigerWit Forex products

Note: MT4 platform time is GMT + 3 time

A Simple Forex Transaction

Let’s say that you are booked to fly from London to Paris, you may purchase Euros to spend on your trip and you will buy them using your Pounds.
(Image of a FX board at airport with Buy Sell columns)
1 GBP = 1.14639 EUR
Using the Exchange Rate above, you are going to Buy €500 for £436.16.
This is an example of a simple Forex transaction, but millions of traders all over the world are capitalising on market fluctuations to buy and sell currencies to make a return from each deal they make. And they don’t even need to fly to different countries!

How online Forex trading works

Whether at home, at work or on the go, traders can utilise a choice of platforms to buy and sell financial instruments with ease. Many traders will take advantage of charts and charting tools to spot opportunities within the market as well as keeping up with global news.
When traders have researched a currency pair and believe that there is an opportunity in the market, they can open and close trades with just a couple of clicks within the TigerWit app.
There are many tools available to traders that can help open and close deals without having to constantly monitor them. These include stop loss and take profit features and orders. By utilising these tools, traders can take advantage of the market without interrupting their schedule.

FAQ’s

What is an underlying currency?

The underlying currency in pair is the first to be listed in a pair. For example, in the currency pair EUR/USD, the Euro would be the underlying currency, which is also known as the base currency. When making a Forex trade, the underlying currency is the one that traders are buying or selling.

What are some of the most popular FX pairs?

There are many currencies from all over the world that get traded against each other. Below is a list of some of the most popular traded pairs and their nicknames.
GBP/USD – Cable
EUR/CHF – Swissy
EUR/USD – Fibre
USD/CAD – Loonie
GBP/JPY – Guppy
EUR/JPY – Yuppie
NZD/USD - Kiwi
USD/JPY – Gopher
AUD/USD – Aussie

What affects the value of a currency?

There are many factors that can affect the value of a currency pair, many of which include domestic, international, political and financial news coming from the originating country of one, or both of the currencies involved in the pair. Investors that look to benefit from the fluctuations in currency values are normally up to date with global news to identify their next trade. As with many investments, knowing what is going on in the world can be a solid base for making trading decisions. As well as following the news, traders can often look to charts and other trading tools in order to make their conclusions.

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