Forex Tutorial: What is Forex Trading?

Forex Factory is for professional foreign-exchange traders. Its mission is to keep traders connected to the markets, and to each other, in ways that positively influence their trading results.

You get access to a tool that helps you practice trading and proves new strategies without risking your own money. If you are living in the U. More specifically, the spot market is where currencies are bought and sold according to the current price. Are you sure you want to change your settings?

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Forex Factory is for professional foreign-exchange traders. Its mission is to keep traders connected to the markets, and to each other, in ways that positively influence their trading results.

This means that when the trading day in the U. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.

Spot Market and the Forwards and Futures Markets There are actually three ways that institutions, corporations and individuals trade forex: The forex trading in the spot market always has been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on.

In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time.

However, with the advent of electronic trading and numerous forex brokers , the spot market has witnessed a huge surge in activity and now surpasses the futures market as the preferred trading market for individual investors and speculators. When people refer to the forex market, they usually are referring to the spot market.

The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future. What is the spot market? More specifically, the spot market is where currencies are bought and sold according to the current price.

That price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards ongoing political situations both locally and internationally , as well as the perception of the future performance of one currency against another.

When a deal is finalized, this is known as a "spot deal". It is a bilateral transaction by which one party delivers an agreed-upon currency amount to the counter party and receives a specified amount of another currency at the agreed-upon exchange rate value. After a position is closed, the settlement is in cash. Although the spot market is commonly known as one that deals with transactions in the present rather than the future , these trades actually take two days for settlement.

What are the forwards and futures markets? Unlike the spot market, the forwards and futures markets do not trade actual currencies. Instead they deal in contracts that represent claims to a certain currency type, a specific price per unit and a future date for settlement. In the forwards market, contracts are bought and sold OTC between two parties, who determine the terms of the agreement between themselves.

In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the Chicago Mercantile Exchange.

Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized.

TD Ameritrade does not charge platform or subscription fees to access our forex trading platforms. Commission and financing charges still apply.

Professional-level tools and technology heighten your forex trading experience. Access every major currency market, plus equities, options, and futures all on one platform. Execute your forex trading strategy using the advanced thinkorswim trading platform.

If you're a serious forex trader, you want serious technology that's going to keep up with you day and night. With thinkorswim you get a completely integrated platform that features everything you need to perform technical analysis, gain insight, generate new ideas, and stay on top of the international monetary scene. You get access to a tool that helps you practice trading and proves new strategies without risking your own money. TD Ameritrade's paperMoney is a realistic way to experiment with advanced order types and new test ideas.

Sharpen and refine your skills with paperMoney. Unless otherwise noted, all of the above futures products trade during the specified times beginning Sunday night for the Monday trade date and ending on Friday afternoon. Tuesday starts at 8:

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