With over 60 different FX markets to choose from, there are a wide range of Forex markets available for you to trade at ETX. Deciding on the right market to trade and understanding when and how to enter the market is crucial to ensuring you are able to trade Forex successfully.
- Decide on a FX pair that suits your trading style When you trade at ETX you’ll have a huge selection of global FX pairs to choose from and these markets cover the UK, US, Asia, Australasia and Europe. In deciding which FX pair to trade, it can help to start with a currency you are familiar with, or perhaps one which you already follow and understand. Like with any investment, the key to deciding on the right market is to do plenty of research and analysis so that you can identify what type of trading opportunities are available, the current level of volatility and likely direction of market sentiment.
- Open a Spread bet position or choose to trade CFDs - You can trade Forex at ETX in two different ways, as a spread bet or as a CFD. This is an important decision as part of your trading strategy because the type of trade you choose may influence how long you hold the position open for as well as having tax implications. To help you decide which trade type is right for you, we have reviewed the difference between trade types in further detail later in this guide.
- Going long or short - Remember, because you are speculating on market movement and changes in the underlying price of FX markets with a Spread bet or CFD account, you can choose to Buy (go long) or Sell (go short). The direction you decide to trade in will reflect whether you feel bullish or bearish about the future of that market.
- Managing your risk - The Forex market is the most liquid market in the world with a huge volume of trading activity. It is crucial when placing your trade that you protect yourself against potential losses, as well as excess volatility. When you trade with ETX, we offer a number of powerful risk management tools like limit orders, stop losses and Guaranteed Stops to help you manage your risk smartly. If you’re new to Forex trading, start out with a relatively small trade size that suits the budget you have available, it is crucial that you don’t over-leverage your account by trading more than you can afford.
- Keeping in touch and exiting the market - As soon as you have opened your Forex trading position and your trade is live, you will need to ensure that you monitor your position closely so that you can see changes over time, lock in profits when you reach your profit target or minimise any potential losses should the market move against you. At ETX our award-winning iOS and Android apps..
Deciding on the right FX market to trade
When trading Forex, deciding on the market that suits your trading strategy best is crucial to your long-term success. You should have a good understanding of why prices in your chosen FX pair might fluctuate, the types of events that can drive market movement and how volatile the market is.
Doing background research and analysis will help you to identify key trading opportunities in your chosen market and can help you identify trends and patterns which indicate market sentiment. Read widely on the latest market analysis and news to help ensure you understand market correlations that could weigh on your chosen FX pair.
When you trade Forex with ETX, you’ll be able to use our powerful charting package that puts advanced drawing tools and indicators at your fingertips, helping you make better trading decisions.
Choose from a variety of chart types, indicators and intuitive drawing tools to follow price action in your Forex market and identify the type of opportunities that fit into your trading strategy.
Once you’re confident you understand the market you’re ready to start trading.
Choosing whether to Spread bet or trade CFDs?
You can trade all of our global Forex markets with either a Spread betting or a CFD trading account.
The trade type you decide on will largely depend on your trading goals, the complexity of your overall trading strategy, whether you are looking for long or short-term gains, and tax considerations.
We have put together a simple table to help you determine which type of trade may suit you best.
|Profits are free from Capital Gains Tax.*
||Profits are liable for Capital Gains Tax.*
|No Stamp Duty
||No Stamp Duty
||No expiry on cash CFDs
|Price per point
||Contract per point
|Losses cannot be offset for tax.
||Losses can be offset for tax
* Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
Are you Bullish or Bearish on your chosen market?
By trading with a CFD or Spread Betting account you have the ability to trade both rising and falling markets, giving you more flexibility and plenty of potential trading opportunities.
Because the Forex market has such incredible high trading volume and is one of the world’s most liquid markets, there are a wide range of short, medium and long-term opportunities for investors.
When you do your research and analysis into your chosen market, you’ll get a feel for current market sentiment as well as potential future direction. This will help you determine whether you open a Buy (go long) or Sell (go short) position. If you think that the market is Bullish and likely to rise in value, you would open a Buy/Long position.
Alternatively, if your research points to a potential downturn in the market and you feel Bearish about price action, you would open a Sell/Short position.
Remember, all of your trading decisions should be based on research, market conditions and the wider goals of your trading strategy so always make sure you test your trading ideas rigorously.
Managing your risk intelligently
Understanding how to manage your risk when trading FX is crucial to your success and should form the bedrock of your trading strategy.
Before entering the market, your research and analysis will have given you an idea of current market sentiment, prevailing trends and likely possible direction for future price action.
No matter how good your research and feel for market trends, it is crucial that you bear in mind that markets are unpredictable and that they can move against you quickly and without warning.
When you trade at ETX we offer you advanced tools to help you manage your risk responsibly so that you can trade with confidence.
Lock in a level of risk you are comfortable with by choosing from a range of effective risk management solutions. Our award-winning TraderPro platform boasts advanced tools like Stop Losses, Limit Orders and Trailing Stops to help you manage your risk efficiently. This helps protect you against excess volatility should prices shift rapidly.
We also offer free Guaranteed Stops* on a wide range of our most popular Forex markets including GBP/USD, GBP/EUR, and EUR/USD.
Monitoring your position and exiting the market
As soon as your Forex position is live you will be subject to changes and shifts in market sentiment so it is important that you monitor price action in your chosen market.
Our smart trading apps for iOS and Android allow you to track your position around the clock letting you keep your finger on the pulse of changing market conditions. You can use our precise drawing tools to monitor movements in price, check trends against longer timeframes on advanced charts and make use of powerful indicators to gauge likely market movement.
You can use trailing stops or regular stop loss orders to close out your order automatically or you can choose to exit the market manually when your position reaches a certain price point.
*Free Guaranteed Stops are only free at certain times, on some markets for retail clients only - click here
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