Forex trading

The largest market in the world

What is Forex trading?

Forex trading, also called FX Trading or Currency Trading, is the practice of exchanging currencies between traders in a central marketplace at floating rates.

Spot FX, Future derivatives, Forward Derivatives, and CFD derivatives are among the multiple markets that constitute the foreign exchange market, which is the largest and most liquid financial market globally, with a reported daily turnover of over $5 trillion. The Forex market is open for trading 24/5.

Currency pairs that are traded the most are recognized as the ‘majors’, such as the EUR/USD, GBP/USD, and USD/CHF.

Learn to trade Forex

How does Forex trading work?

Forex pairs are traded as CFDs (Contract for Difference) with HedgeHood. When trading Forex, you pick a pair of currencies and decide whether you believe one currency’s price will rise or fall. Forex trading involves trading currency pairs such as EUR/USD, where the first currency is the ‘base currency’ and the second is the ‘quote currency’. Exchange rates show how many units of the quote currency you can buy with one unit of the base currency.

For example, EUR/USD 1.2456 shows us that 1 Euro = 1.2456 US Dollars.

If you’re ready to trade, you can choose to go either long or short. For instance, if you go long, you are confident that the Euro will appreciate against the US Dollar. Conversely, going short means you believe it will depreciate.

Trade EUR/USD

Forex trading example

The gross profit on your trade is calculated as follows:

Opening Price

$1.26740 × 2 lot = $253,480

Closing Price At $1.24576 × 2 lot = $249,152Gross Profit on Trade $253,480 – $249,152 = $4,328

Closing Price At $1.34529 × 2 lot = $269,058Gross Loss on Trade $267,246 – $269,058 = -$1,812

Opening the position

The price of the Euro against the US Dollar (EUR/USD) is 1.26740/1.26741 and you decide to sell 2 standard lots (the equivalent of €200,000) at 1.26740.

Closing the position

One week later the Euro has fallen against the US Dollar to 1.24576/1.24577 and you decide to take your profit by buying back 2 standard lots at 1.24577; if the Euro has increased against the US Dollar to 1.29881/1.29882, the trade loses $6,282.

Trade from 0.0 pips

Typical Forex spreads

		Standard account		Raw Account
Symbol	PRODUCT DESCRIPTION	MIN	AVG	MIN	AVG
AUDCAD	Australian Dollar vs Canadian Dollar	1.1	1.7	0	0.7
AUDCHF	Australian Dollar vs Swiss Franc	1.6	1.8	0	0.7
AUDJPY	Australian Dollar vs Japanese Yen	1.1	1.9	0	0.8
AUDNZD	Australian Dollar vs New Zealand Dollar	1.1	2.4	0	1.3
AUDUSD	Australian Dollar vs Us Dollar	1.1	1.4	0	0.3
CADCHF	Canadian Dollar vs Swiss Franc	1.5	2.1	0	1
CADJPY	Canadian Dollar vs Japanese Yen	1.2	2.3	0	1.2
CHFJPY	Swiss Franc vs Japanese Yen	1.1	4.2	0	3.1
EURAUD	Euro vs Australian Dollar	1.1	2.2	0	1.1
EURCAD	Euro vs Canadian Dollar	1.5	2.8	0	1.2
EURCHF	Euro vs Swiss Franc	1.3	2.2	0	1.1
EURGBP	Euro vs Great Britain Pound	1.1	1.6	0	0.5
EURJPY	Euro vs Japanise Yen	1.1	1.7	0	0.6
EURNOK	Euro vs Norwegian Kroner	5.2	117.6	28	110.1
EURNZD	Euro vs New Zealand Dollar	1.2	2.8	0	1.7
EURPLN	Euro vs Polish Zloty	1.7	74.2	19.1	70.9
EURSEK	Euro vs Swedish Krona	6.6	76.1	22	70.6
EURSGD	Euro vs Singapore Dollar	1.6	5.5	2.2	4.4
EURTRY	Euro vs Turkish Lira	1.6	763.8	206.5	760.7
EURUSD	Euro vs Us Dollar	1.0	1.2	0	0.1
EURZAR	Euro vs South African Rand	12.5	331.3	147.1	319.8
GBPAUD	Great Britain Pound vs Australian Dollar	1.6	2.5	0	1.4
GBPCAD	Great Britain Pound vs Canadian Dollar	1.1	2.6	0	1.5
GBPCHF	Great Britain Pound vs Swiss Franc	1.4	3.5	0.5	2.4
GBPJPY	Great Britain Pound vs Japanese Yen	1.1	2.2	0	1.1
GBPNZD	Great Britain Pound vs New Zealand Dollar	1.6	3.9	0	2.4
GBPSEK	Great Britain Pound vs Swedish Krona	8.1	136.6	63.3	131.9
GBPSGD	Great Britain Pound vs Singapore Dollar	1.2	7.1	3.2	5.9
GBPUSD	Great Britain Pound vs Us Dollar	1.1	1.7	0	0.6
NZDCAD	New Zealand Dollar vs Canadian Dollar	1.6	2.3	0	1.2
NZDCHF	New Zealand Dollar vs Swiss Franc	1.8	2.1	0	1
NZDJPY	New Zealand Dollar vs Japanese Yen	1.5	2.5	0	1.4
NZDSGD	New Zealand Dollar vs Singapore Dollar	1.6	5.3	2.1	4.2
NZDUSD	New Zealand Dollar vs Us Dollar	1.1	1.8	0	0.6
USDBRL	Us Dollar vs Brazilian Real	–	51.22	19.12	41.22
USDCAD	Us Dollar vs Canadian Dollar	1.1	1.8	0	0.7
USDCHF	Us Dollar vs Swiss Franc	1.1	2.5	0	1.3
USDCNH	Us Dollar vs Chinese Yuan	4	1.9	0	0.8
USDHKD	Us Dollar vs Hong Kong Dollar	1.9	7.3	1.9	6.2
USDJPY	Us Dollar vs Japanese Yen	1.0	1.4	0	0.3
USDKRW	US Dollar vs South Korean won		119.6	32	89.6
USDNOK	Us Dollar vs Norwegian Krone	5.2	119.3	27	110.8
USDPLN	Us Dollar vs Polish Zloty	3.9	75.4	21	71.7
USDSEK	Us Dollar vs Swedish Krona	5.2	90	24.3	81.3
USDSGD	Us Dollar vs Singapore Dollar	0.3	3.7	0.6	2.6
USDTRY	Us Dollar vs Turkey Lira	1.7	597.2	117	594.7
USDZAR	Us Dollar vs South African Rand	4.8	144.5	22.4	131.6
AUDSGD	Australian Dollar vs Singapore Dollar	–	4.1	1.2	2.6
CHFSGD	Swiss Franc vs Singapore Dollar	–	6.1	2.2	6.1
EURCZK	Euro vs Czech Koruna	–	233.9	66.1	216.5
EURDKK	Euro vs Danish Krone	–	19.6	10.3	13.6
EURHUF	Euro vs Hungarian Forint	–	288.1	23	74.5
EURMXN	Euro vs Mexican Peso	–	123.1	34.1	103.1
GBPDKK	Great Britain Pound vs Danish Krone	–	34.1	12.4	28.1
GBPMXN	Great Britain Pound vs Mexican Peso	–	247.3	112.3	227.3
GBPPLN	Great Britain Pound vs Polish Zloty	–	140.2	63.7	138.7
GBPTRY	Great Britain Pound vs Turkish Lira	–	940.6	251.8	933.6
USDCZK	US Dollar vs Czech Koruna	–	213	57.2	195.6
USDDKK	US Dollar vs Danish Krone	–	20.6	5.3	14.6
USDHUF	US Dollar vs Hungarian Forint	–	292.1	22.8	78.5
USDINR	US Dollar vs Indian Rupee	–	32.9	10.6	12.9
USDMXN	US Dollar vs Mexican Peso	–	81.6	14.4	71.6
USDTHB	US Dollar vs Thai Baht	–	333.5	186.9	313.5

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