Education

This section of our website gives beginners all of the information needed to start trading forex and CFDs with confidence. Here you can find all the basics about currency couples and CFD trading.

  • What is forex?

Learn everything about global forex market, currency couples and how to trade them. Here you
can also discover descriptions and examples of the most common forex trading concepts.

  • What are pips?

Pips or pipettes are the main units of Forex counting and price movements? Pips and pipettes are the smallest units of exchange rate changes. Learn all about them with us!

  • How to read forex charts?

You are going to be able to learn all about different types of Forex charts as well as learn to read all of them and implement your knowledge into life. Getting to know absolutely all of the types of trading charts is one of many steps you are going to have to take on your way to success.

  • Trading platforms comparison

There are so many trading platforms out there that it is important to differentiate between them and to look for the main differences as each of them is going to be useful for specific kind of trading.

  • Currency trading

Looking deeper into the world of currency trading. What are the perks and challenges of currency trading? How to be more profitable? What to look for in every trade? Find your answers in this section.

  • How to trade stocks?

How do stocks work? Which options are the best? Where did Apple and Facebook go wrong and how much money did they lose? Want to look deeper in the world of CFDs? You are in the right place!

  • Technical analysis

Technical analysis of trading charts is something we all need to know how to do. What are the ways to analyze forex charts and which one is the most effective? Those are the questions we are going to look for answers for.

  • What are CFDs?

Contracts for Difference – more commonly known as CFDs – are important financial instrument that allows traders to earn on the rising and falling value of currencies, indices, commodities and stocks without owning the underlying asset. Want to find out more? Stay with us right here!

  • What is Short Selling?

Shorting is one of the most interesting trading strategy. To short means not to hold assets for a long period of time. But that is just the surface of the issue.

  • What is Copy Trading?

Copy trading course is another entry that you are going to learn with TorexFX. What is copy trading? When you as a beginner are able to copy the success of a professional trader by doing the exact same things – that is copy trading.

  • What is paper trading?

New to Forex and CFD trading? That is just fine! Paper trading or demo trading is just what you need. Learn all there is to learn about our trading platform and our services without risking your money.

  • What Are Vanilla Options?

Vanilla options are contracts giving traders the right to buy or sell a certain amount of a certain instrument, at a certain price on a pre-defined time. Trading vanilla options allow traders to control not only the instrument and the amount of the trades, but also when and at what price the trade is executed.

  • What is Leverage Trading?

Leverage trading allows traders to buy only a fraction of a certain option, while the rest of the price is covered by the broker. Leverage trading boosts profits but also increases the level of risk, so you need to really think before going into leverage trading.

  • Trading styles

Day trading, scalping or something else? Do you have any idea what we mean here? If no, do not worry. We are here to also help you understand every word we just said and explain the perks of every approach.

  • Derivatives trading

Find out what derivatives are and all the ways they can be useful to you in trading as well as how they can influence your trading style and your earning level. Learn all about the most common derivatives, including Futures, Forwards, Options, CFDs and Swaps.

  • What is a trading plan?

How to build a perfect trading plan and how to stick to it? Where to look for ideas for your plan and how all of it can influence your future? Answers to all of these question are going to be provided to you.

  • Money Management

Money management is something that every grown up person needs to know how to do. After all it is a knowledge that is going to be a foundation for the future of your family and your kids. Learn all of the basics of money management here.

  • What is the Stock Market?

What’s a stock exchange? How does it work? What are the primary and secondary markets? How shares are issued, bought and sold? Want to learn everything about stock market and the processes in it? Good! You are in the right track.

  • How to Trade Online?

Learn how to trade forex online. TorexFX has all the basic information covered for you.

What is Foreign Exchange?

Foreign exchange commonly known as Forex or FX, is a segment of international market dedicated to buying and selling currencies in order to make profit on the changes of the value. For a long period of time forex has been and still is the largest market in the world. It gained its popularity due to the high liquidity. It is extremely popular with pros and beginners because of the vast choices and amount of information available on every asset.

It is estimated that around $4 trillion are traded in the Forex market every day. Imagine the volumes! What does this mean on practice? Well, that you as trader can basically buy any currency you want around the clock from Monday to Friday.

Traders are free to choose the time zone they are going to trade in. Living in the USA it is easy to trade with London market, although traders like this do have to make a lot of adjustments to their life style.

There is always someone buying and selling on Forex – that’s for sure.

Currency Couples

There is impossible-to-imagine amount of currency couples in the market. And all of them are available for a trade any time. All of the currencies are marked with three letters which is an individual coding for every currency. We all know USD – United States Dollar, JPY – Japanese yen, EUR – euro and CAD – Canadian dollar. But there are so much more of them.

Currencies are divided into two groups – major and minor. Those, mentioned above are from the major group. But there are more exotic currencies which are not as popular with international and even domestic traders.  

As a rule, seven major pairs are EUR/USD, USD/JPY, GBP/USD, USD/CAD, USD/CHF, AUD/USD and NZD/USD. Everything out of this list is either exotic or minor. But that doesn’t mean that the other ones are any less likely to bring you profit. The only problem with them is that it might be slightly harder to sell them as they are not as highly demanded.  

Forex Trading Basic Information

The most popular pair traded is EUR/USD. The currency on the left is called base currency. It is the one we wish to buy or sell.

The one on the right is the secondary currency. It is the one we use to make the transaction.

Each pair has two prices – ask and bid. Ask is the price for selling the base currency and bid is the price for buying it. The difference between them is a spread, and it represents by the amount of brokers charge who opened the position. The more a currency is traded, i.e. the higher the volatility, narrower is the spread. The rarer the pair is traded, the wider the spreads will be.

Usually a quote is presented with four numbers after the dot, for instance 1.1546. In this case of EUR/USD open trade, it means that for every Euro trader is going to buy, $1.1546 will have to be invested.

Changes in the value of the currency are instantly reflected in these four numbers after the dot. These changes are going to be represented by pips.

Going Long and Short

Going long and going short are two opposite trading strategies that can be seen across the field.  Shorting is basically not holding onto your assets and selling as soon as the price changes and longing is just the opposite – holding onto your assets in hope of the growth.

Bull and Bear market.

Bull market are the market conditions in which we see constant growth with only few retracements. In general bull market is marked by growth and overall development.

Bear market is the market where there is no growth – on the contrary – there are constant falls. It usually occurs in the conditions of the slow economy and can be one of the signs of economic crisis.

Trading platforms.

In today’s world trading on-the-go is one of the demands of almost all of the traders. That means that we are going to see a lot of platforms that are not only available for PC but can be easily installed onto your tablet and your phone for you to trade anywhere.

Platforms do not restrict traders from implementing any of the trading strategies, so you are free to do whatever you find fitting for you with any trading platform.

Leverage Trading

Leveraged trading, or trading on the margin, allows trader to open larger positions than his own assets would allow. In most forex pairs, the maximum leverage that is allowed is 400:1. This means that for every $400 of the trader the trader is going to have to pay only $1. Putting it otherwise, with the maximum leverage trader has to pay 0.25 percent of the entire amount. The rest is covered by the broker. But in this case, you need to be very careful with your calculations as it is easy to lose more than you can afford.

What affects the Forex Market?

Forex can be described with one word – liquid. It is due to the high demand and supply it is like that. International economic and political events – that is the main engine that is moving the forex market along and makes it move. Virtually everything that concerns money can be an influence in the business.

Here you as trader need to be on the strict lookout for everything counts.

Example

Let’s say that you want to buy EUR/USD with bid price $1.1564 and the ask price of $1.1561. In case you think that euro is going to start surging you are going to hit BUY button. Than you are going to have to select the number of units for the deal. Say 5.000 units.

The price of the transaction is $5780. With maximum leverage you are going to pay $12.5. If euro goes up – there is your profit from the trade. Simple as that.

What is a CFD?

CFDs or Contracts for Difference (CFDs) are special financial instruments which give traders the possibility to earn with the price changes of shares, commodities and funds. CFDs give us the possibility to earn off of these instruments without actually owning any of them and without owning the rights to them.

Why are CFDs so popular?

Well, because they allow traders to be extremely flexible as this kind of trading doesn’t really require having an actual physical asset in order to profit from it.

Profits and losses of the CFD trading are fully dependent on the price difference of the position in the time of purchase and the time of selling. If you bought cheaper than you are selling now – you make a profit.

CFD Trading Methods 

The most popular way to trade CFDs are longing or shorting, although it would be unfair to say that these are the only options in the segment. There are other options which you can discover throughout your trading experience.

Long Position

Long position is similar to that of Forex. You buy an asset and you decide to keep it in order to see more gains as the value of it rises. Long trades can last a month and can be extended to a year at a time.

Short Position

Short position is getting rid of your assets fast. That is basically it. It is basically selling an asset as soon as you see the decline in the price. This trading type is much more risqué as there is no way to tell whether the asset is going to maintain its direction or going to reverse it in the nearest future, depriving you from having more gains.