Forex Trading

Let's say some major economic news was released and you thought the US dollar was going to weaken in response. You think the US dollar will depreciate against the Australian dollar, meaning it'll take more US dollars in future to purchase the same amount of Australian dollars. You decide to go long or buy AUDUSD. Here you are simultaneously buying the base currency, AUD, and selling the quote currency, USD.

Now, the FX markets seem to agree with you and the value of AUDUSD increases significantly from the price you originally bought at. You've made a profit and can lock it in at your desired level using a take profit order.

With our trading platforms, you can lock in profits automatically. Simply set your targets and let the markets do the work for you. If your trades don’t go your way, set a stop loss order to restrict your losses and manage your risk like a professional trader.

The advantage of forex CFD trading is that you can take an opposing view with ease. If you thought the same economic release would prove positive for the US dollar, you could just as easily sell or go short EURUSD - simultaneously selling the Euro and buying the US dollar. The major players in the market agree with you and push down the price of EURUSD, and you could make a profit from a fall in the value of EURUSD.

Remember, CFD trading is risky. Just as the markets could agree with your point of view, the price of an instrument may move in a direction which results in a losing trade. In the example above, we noted a depreciation in EURUSD, but it could just as easily appreciate as a result of other factors in the market. Managing risk appropriately is an important aspect of trading volatile instruments like FX.

Typically, you’d need 100,000 units of any base currency to open a standard trade in the underlying foreign exchange market. But with the benefits of leverage, you can trade this same amount with as little as 200 units of base currency. Forex CFD trading allows you to increase your exposure to highly liquid financial markets without excessive capital requirements. At Pepperstone, you can open trades with notional values as low as 1000 units (0.01 lots) of base currency.

If you’re holding a currency pair overnight, you’ll also pay or benefit from differential interest rates between countries, also known as Swap Rates. If relative interest rates are significantly higher in the US relative to Australia and you’re holding US dollars, then you’d typically receive a Swap benefit for holding this position. Conversely, if you’re holding Australian dollars against US dollars, then you’d receive a Swap charge to service this position, since in theory you’d have earned a higher interest rate had you been holding US dollars instead of Australian dollars.

Learn more about how forex trading works.

Gain access to TradingView's advanced charting tools and interact with over 30 million traders*.

MT4 platform is known for its ease of use amongst FX traders and is highly-rate by EA traders for its ease of EA development and implementation. Connect to social trading services and signal providers to follow strategies of successful traders.

MT5 platform is perfect for those starting out as FX traders with its superior charting capabilities and additional analytical features. Use Stop Limit orders to implement your trading strategy with confidence. A dedicated economic calendar keeps you up-to-date with important market events. For EA traders and programmers, you’ll find faster code execution and data processing speeds.

With cTrader, the power is in your hands as the trader. Features include multiple chart modes and views, market depth, and an advanced Smart stop out system. Program your trading robots with cTrader Automate and connect to cTrader’s FIX API to use your own trading system.

Forex trading refers to the buying and selling of currencies on the foreign exchange market. Traders speculate on the price movements of different currency pairs, aiming to profit from these fluctuations.

Forex prices are influenced by a variety of factors, including economic indicators, geopolitical events, central bank policies, interest rates, and market sentiment.

To start trading forex, you'll typically need to open a trading account with a forex broker like Pepperstone. You can then deposit funds into your account and start trading any currency pair.

A currency pair consists of two currencies quoted in relation to each other. For example, EUR/USD represents the euro against the U.S. dollar. The first currency in the pair is the base currency, and the second currency is the quote currency. At Pepperstone, you can trade over 60+ currency pairs including majors, minors, crosses and exotics.

Pips, or "percentage in points," are the smallest price increments in forex trading. They represent the fourth decimal place in most currency pairs. For example, a change in price from 1.2000 to 1.2001 represents a one-pip movement. In crosses which include the Japanese Yen, the second decimal place is used instead.

Technical analysis involves analysing historical price data, charts, and indicators to identify patterns, trends, and potential trading opportunities. Traders use technical analysis to make predictions about future price movements. A broker like Pepperstone offers several tools to assist traders with technical analysis including powerful charts.

Fundamental analysis involves assessing economic, financial, and geopolitical factors that may influence currency prices. Traders using fundamental analysis consider factors such as economic indicators, central bank policies, and news events.

Forex trading carries various risks, including market volatility, leverage-related risks, liquidity risks, and the risk of loss. Traders should carefully manage their risk exposure, use risk management tools, and have a solid understanding of the market before engaging in forex trading.