Trade forex on the IQ Option platform and enjoy reliable pricing and exceptional execution
Forex is short for foreign exchange. The forex market is a place where currencies are traded. It is the largest and most liquid financial market in the world with an average daily turnover of 6.6 trillion U.S. dollars as of 2019. The basis of the forex market is the fluctuations of exchange rates. Forex traders speculate on the price fluctuations of currency pairs, making money on the difference between buying and selling prices.
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Forex Trading FAQ
How to trade forex?
To trade forex on margin on the IQ Option platform, follow these steps:
1. Open a new asset and select “Forex”.
2. Enter a trade size by clicking the “Quantity” button.
3. Set optional parameters if you wish:
- If you would like to open a position with the expiration time, press the “Expiration” button.
- Set the take-profit/stop-loss levels.
5. Make your forecast and open a trade.
6. Close your trade manually in the “Portfolio” or wait until it closes automatically in case you set optional parameters.
Please note that your trade will be forcibly closed in case your margin level falls below 50%.
What is margin?
Margin is the amount of a trader’s funds required to open a new position. Margin is estimated based on the size of your trade, which is measured in lots. A standard lot is 100,000 units. We also provide mini lots (10,000 units), micro lots (1,000 units) and nano lots (100 units). The greater the lot, the bigger the margin amount. Margin allows you to trade with leverage, which, in turn, allows you to place trades larger than the amount of your trading capital. Leverage influences the margin amount too.
What is leverage?
Leverage is the ability to trade positions larger than the amount of capital you possess. This mechanism allows traders to use extra funds from a broker in order to increase the size of their trades. For example, 1:100 leverage means that a trader who has deposited $1,000 into his or her account can trade with $100,000. Although leverage lets traders increase their trade size and, consequently, potential gains, it magnifies their potential losses putting their capital at risk.
When is the forex market open?
Due to different time zones, the international forex market is open 24 hours a day — from 5 p.m. Eastern Standard Time (EST) on Sunday to 4 p.m. EST on Friday, except holidays. Markets first open in Australasia, then in Europe and afterwards in North America. So, when the market closes in Australia, traders can have access to markets in other regions. The 24-hour availability of the forex market is what makes it so attractive to millions of traders. Check our trading times for forex pairs.
What is a spread?
Currencies are traded in pairs in the forex market. A currency pair consists of a base currency, which is the first currency in the pair, and a quote currency, which is the second currency in the pair. For example, if you see EUR/USD = 1.1046, it means that you will need 1.1046 U.S. dollars (quote currency) in order to buy one euro (base currency). When trading forex, traders buy one currency and sell another at the same time. Currency pairs have two prices: the bid price and the ask price, which form a forex quote. When you intend to buy a base currency, you will do so by selling a quote currency. The price at which your broker will sell you the base currency is called the ask price (ask). When you intend to sell a base currency in order to buy a quote currency, you will have to pay the bid price (bid). The bid is the price your broker is willing to pay to purchase the base currency. The bid is always lower than the ask. The difference between the bid and the ask is called the spread. Spreads are measured in pips.
What is a pip?
A pip is short for percentage in point. A pip measures the minimum price move in the exchange rate of a currency pair. Pips are used to measure the bid-ask spread. For most currency pairs, which are priced out to four decimal places, a pip is 0.0001. For example, if the EUR/USD pair moved from 1.1051 to 1.1052, we can say it moved one pip. Some currency pairs are priced out to two decimal places, so one pip for them is 0.01. For example, if the GBP/JPY pair moved from 143.04 to 143.06, we say it moved two pips. We also offer our traders fractional pips called pipettes. One pipette is 0.00001, so you can see price moves to five decimal points.
What is a swap?
If traders hold their positions open overnight with the intent to forward them to the next delivery day, they will have to pay a swap. A swap is an interest charge that a trader has to pay to a broker for holding positions overnight. Check which charges and fees are applied to each trading instrument.
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The Financial Products offered by the company include Contracts for Difference ('CFDs') and other complex financial products. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, CFDs may not be suitable for all investors because it is possible to lose all of your invested capital. You should never invest money that you cannot afford to lose. Before trading in the complex financial products offered, please ensure to understand the risks involved.
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