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FX and Derivatives Primer

With an estimated $4 trillion being transacted on a daily basis, the FX (Foreign Exchange) market is known to be the largest and most liquid of financial markets in the world, far bigger than all the stocks and bonds markets put together. You can trade on FX from anywhere around the world as it is a decentralized market, which means all you will need to get started in FX trading is a live account on a reliable trading platform such as the Regal MT4 Trader.

Why Trade FX?

There are many benefits to trading FX in comparison to trading other products such as commodities and stocks. The first and most immediate benefit is the sheer liquidity of the FX market—its daily trading volume eclipses the trading of all other markets. Unlike trading in other markets, FX has no centralized exchange and is traded primarily through banks, dealers, brokers and financial institutions. Because financial institutions are able to trade FX, the FX market is available for traders 24 hours a day, 5 days a week, with the market closing on Saturday morning. This gives traders tremendous flexibility and control over their trading hours, for they will be able to gain access to the markets throughout the business week.

In the FX market, there are 8 currencies which are traded in a larger volume as compared to the other currencies. These are referred to as the Major Currencies. They are:

USD

USD

USD – US Dollar

GBP

GBP

GBP – British Pound

EUR

EUR

EUR – Euro

JPY

JPY

JPY – Japanese Yen

CHF

CHF

CHF – Switzerland Franc

CAD

CAD

CAD – Canadian Dollar

AUD

AUD

AUD – Australian Dollar

NZD

NZD

NZD – New Zealand Dollar

Traders will look to trade on these currencies through what is referred to as a Currency Pair. These pairs consist of one currency being held against another. Almost all currencies are free floating, which means they do not have a set value to another currency and can rise and fall in value independently. The relative value of one currency held against another is known as the Exchange Rate between the two currencies, and this is precisely what traders trade on in the FX markets in order to make their profits.

FX Derivatives

With FX Derivatives trading, you can speculate on the price fluctuation of your currency or other underlying asset of choice. The basic premise of FX Derivatives trading relies on the trader making either a Call (buy) or Put (sell) decision within their preferred time frame anywhere from 60 seconds up to an hour. With a Call option, you are predicting that the price of your asset of choice will rise, and with a Put option, you are predicting that it will fall.

Trading FX Derivatives is different from other forms of investments which typically require you to purchase assets and then closely monitor your account to protect it from fluctuations in the respective markets. When you trade on FX Derivatives, you are trading on the future price movements of your market of choice within a pre-determined timeframe.

Features of FX Derivatives Trading

Multiple Timeframes

Execute your trades within your timeframe of choice—from 60 seconds up to 1 hour.

Substantial Returns

Earn attractive potential returns on your successful FX Derivatives trades—up to 84%.

Manageable Risk

Trade according to your risk profile—you have access to all information you need before you even execute your trade.

High Accessibility

With the Regal FX Derivatives Trader, you will be able to trade on FX Derivatives directly through the MT4 platform.