What is Forex Trading?
Here you’ll find forex explained in simple terms. If you’re new to forex trading, we’ll take you through the basics of forex pricing and placing your first forex trades.
‘Forex’ is short for foreign exchange, also known as FX or the currency market. It is the world’s largest form of exchange, trading around $4 trillion every day, and it is open to major institutions and individual investors alike.
Forex trading explained
The aim of forex trading is simple. Just like any other form of speculation, you want to buy a currency at one price and sell it at higher price (or sell a currency at one price and buy it at a lower price) in order to make a profit.
Some confusion can arise as the price of one currency is always, of course, determined in another currency. For instance, the price of one British pound could be measured as, say, two US dollars, if the exchange rate between GBP and USD is 2 exactly.
In forex trading terms this value for the British pound would be represented as a price of 2.0000 for the forex pair GBP/USD. Currencies are grouped into pairs to show the exchange rate between the two currencies; in other words, the price of the first currency in the second currency.
Some commonly traded forex pairs (known as ‘major’ pairs) are EUR/USD, USD/JPY and EUR/GBP, but it is also possible to trade many minor currencies (also known as ‘exotics’) such as the Mexican peso (MXN), the Polish zloty (PLN) or the Norwegian krone (NOK). As these currencies are not so frequently traded the market is less liquid and so the trading spread may be wider.
Forex trading spread
Like any other trading price, the spread for a forex pair consists of a bid price at which you can sell (the lower end of the spread) and an offer price at which you can buy (the higher end of the spread). It is important to note, however, for each forex pair, which way round you are trading.
When buying, the spread always reflects the price for buying the first currency of the forex pair with the second. So an offer price of 1.3000 for EUR/USD means that it will cost you $1.30 to buy €1. You would buy if you think that the price of the euro against the dollar is going to rise, that is, if you think you will later be able to sell your €1 for more than $1.30.
When selling, the spread gives you the price for selling the first currency for the second. So a bid price of 1.3000 for EUR/USD means that you can sell €1 for $1.30. You would sell if you think that the price of the euro is going to fall against the dollar, so you can buy back your €1 for less than the $1.30 you originally paid for it.
Calculating your profit
Take another example. Suppose the spread for EUR/GBP is 0.8414-0.8415. If you think the price of the euro is going to rise against the pound you would buy euros at the offer price of 0.8415 per euro. Say in this case you buy €10,000 at a cost to you of £8415.
The spread for EUR/GBP rises to 0.8532-0.8533 and you decide to sell your euros back into pounds at the bid price of 0.8532. The €10,000 you previously bought is now therefore sold for £8532. Your profit on this transaction is £8532 minus the original cost of buying the euros (£8415) which is £117. Note that your profit is always determined in the second currency of the forex pair.
Alternatively, suppose in the first instance you think the price of the euro is going to fall, and you decide to sell €10,000 at the original bid price of 0.8414, for £8414.
In this case you are right and the spread for EUR/GBP falls to 0.8312-0.8313. You decide to buy back your €10,000 at the offer price of 0.8313, a cost of £8313. The cost of buying back the euros is £111 less than you originally sold the euros for, so this is your profit on the transaction. Again your profit is determined in the second currency of the forex pair.
Spread betting or CFD trading
XM provides two different vehicles for trading forex: spread betting and CFDs. Both of these products allow you to speculate on the movements of currency markets without making a physical trade, but they operate in slightly different ways.
With spread betting you stake a certain amount (in your account currency) per pip movement in the price of the forex pair. So for instance you might buy (or sell) £10 per pip on USD/JPY, to make £10 for every pip the US dollar rises (or falls) against the Japanese yen. Forex traders have been using spread betting to capitalise on short-term movements for many years now. Find out more about spread betting.
With CFDs you buy or sell contracts representing a given size of trade. So you might decide to buy 1 contract of GBP/USD, which (with InterTrader) represents a trade of £10,000. Your profit or loss is calculated in the second currency, in this case US dollars, and then converted (if necessary) into your account currency. Alternatively you can open account using the link below
https://clicks.pipaffiliates.com/c?c=56401&l=https://clicks.pipaffiliates.com/c?c=56401&l=en&p=0&p=0best forex broker
Either way you don’t have to provide the full currency value to open your position. Instead you put down a margin deposit, which is a fraction of the full value. And you don’t actually buy or sell any currency: you are opening a speculative position on the change in value of the forex pair. Your profit or loss is realised when you close your position by selling or buying.
Of Mountains & Printing Presses
The goal of this new editor is to make adding rich content to WordPress simple and enjoyable. This whole post is composed of pieces of content—somewhat similar to LEGO bricks—that you can move around and interact with. Move your cursor around and you’ll notice the different blocks light up with outlines and arrows. Press the arrows to reposition blocks quickly, without fearing about losing things in the process of copying and pasting.
What you are reading now is a text block, the most basic block of all. The text block has its own controls to be moved freely around the post…
… like this one, which is right aligned.
Headings are separate blocks as well, which helps with the outline and organization of your content.
A Picture is worth a Thousand Words
Handling images and media with the utmost care is a primary focus of the new editor. Hopefully, you’ll find aspects of adding captions or going full-width with your pictures much easier and robust than before.
Try selecting and removing or editing the caption, now you don’t have to be careful about selecting the image or other text by mistake and ruining the presentation.
The Inserter Tool
Imagine everything that WordPress can do is available to you quickly and in the same place on the interface. No need to figure out HTML tags, classes, or remember complicated shortcode syntax. That’s the spirit behind the inserter—the
(+) button you’ll see around the editor—which allows you to browse all available content blocks and add them into your post. Plugins and themes are able to register their own, opening up all sort of possibilities for rich editing and publishing.
Go give it a try, you may discover things WordPress can already add into your posts that you didn’t know about. Here’s a short list of what you can currently find there:
- Text & Headings
- Images & Videos
- Embeds, like YouTube, Tweets, or other WordPress posts.
- Layout blocks, like Buttons, Hero Images, Separators, etc.
- And Lists like this one of course 🙂
A huge benefit of blocks is that you can edit them in place and manipulate your content directly. Instead of having fields for editing things like the source of a quote, or the text of a button, you can directly change the content. Try editing the following quote:
The editor will endeavour to create a new page and post building experience that makes writing rich posts effortless, and has “blocks” to make it easy what today might take shortcodes, custom HTML, or “mystery meat” embed discovery.
Matt Mullenweg, 2017
The information corresponding to the source of the quote is a separate text field, similar to captions under images, so the structure of the quote is protected even if you select, modify, or remove the source. It’s always easy to add it back.
Blocks can be anything you need. For instance, you may want to add a subdued quote as part of the composition of your text, or you may prefer to display a giant stylized one. All of these options are available in the inserter.
You can change the amount of columns in your galleries by dragging a slider in the block inspector in the sidebar.
If you combine the new wide and full-wide alignments with galleries, you can create a very media rich layout, very quickly:
Sure, the full-wide image can be pretty big. But sometimes the image is worth it.
The above is a gallery with just two images. It’s an easier way to create visually appealing layouts, without having to deal with floats. You can also easily convert the gallery back to individual images again, by using the block switcher.
Any block can opt into these alignments. The embed block has them also, and is responsive out of the box:
You can build any block you like, static or dynamic, decorative or plain. Here’s a pullquote block:
Code is Poetry
The WordPress community
If you want to learn more about how to build additional blocks, or if you are interested in helping with the project, head over to the GitHub repository.
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