FAQ

FAQ 2018-02-12T01:19:24+04:00

It is hard to give a straightforward answer, as forex is a flexible market where changes occur on a daily basis. Generally, you should start with major currencies and avoid currencies which are regarded as very volatile.

Again, there are no rules regarding that, as then it would be too easy, but you can check the trading position of the country. If the country is selling a lot of goods, or at least more than it is buying, it means that there will be a lot of exports in that currency, which should increase the value of that currency.

Yes, the influence of political events and decisions is often even larger than what people may think. The forex market doesn’t respond well to politically instability and the value of a currency of a country in a political crisis might drop dramatically. In fact, political turmoil is often a perfect chance for a trader with a keen eye. For example, when Britain voted to leave the EU, the price of the UK pound against the Euro dropped dramatically overnight.

That depends on your bankroll. Never, under any circumstances, trade with more money that you can afford to lose. Think of forex trading as a source of additional income and don’t risk money that you need for something else, like rent, or bills. Most brokers will allow you to start trading with a lower amount of money, so you should worry, even if you don’t have a lot of cash at your disposal.

It is a good choice, provided that you don’t end up trading more than what you initially planned. It is smart to compare the bid and ask prices and the spreads that are offered by different brokers. That way you can trade with the broker that gives you the best price.

The whole point of trading forex is that you can trade pretty large amounts of currency units, without actually owning them, so there isn’t much point in trading forex through a broker if you’re not using leverage. However, you should be careful regarding what leverage you use. If the leverage is too high, you might end up losing most of what you initially invested.

Fixed spreads don’t change as a result of daily market fluctuations, they are more stable, thus trading with fixed spreads is less risky. With floating spreads ask and bid positions change frequently. Generally, it is advised that you acquire a certain level of experience before you start trading floating spreads.

Yes, that is possible, even though in most cases when the value of a currency decreases against one currency, it is not very likely for it to grow against another, there is still a slight possibility for that to happen.

It depends on which currency pair you’re trading. If you’re trading majors you’re likely to get narrower spreads. Generally, spreads are getting narrower in the past few years and it is a result of the growth of the market as a whole.

That is because the Japanese value is of a much lower value compared to all major currencies, and a four-decimal pip would be too insignificant, considering that the value of the yen is more than hundred times lower than the value of the US dollar or the UK pound, for example.