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One of the most popular types of online trading these days is the so called forex trading. Becoming a part of it is extremely simple, as is investing in available assets, but in order to be successful you need to at least know the basics of how the whole process works. Investing in forex should not be a wild stab in the dark, but a decision you make after careful consideration of all market conditions. The same goes for CFD trading, a very similar form of trading often offered by the same brokers that also have forex on their website. To help you get off to a great start, we have prepared this short text which will introduce you to all basic concepts of this type of investing. Let’s get started!

Forex & CFD Trading Tutorial | What is forex?

First and foremost, allow us to answer one fundamental question people who haven’t traded before are bound to ask – what is forex? Well, linguistically speaking, the word forex is made out of two other words: foreign exchange. Foreign exchange is a term denoting exchange of different currencies for one another and this market is the largest market in the world when it comes to finances because the need to perform currency conversions is present every hour of every day everywhere in the world. Different countries use different currencies, but these currencies do not have a fixed value and can fluctuate significantly, depending on the economic situation in the world or in the country using them. This opens up a lot of space for trading because you can profit from buying a currency when its value is low and selling it when it recovers. The possibilities are extremely numerous, so let’s continue our forex & CFD trading tutorial with another very important topic.

Forex & CFD Trading Tutorial | Forex exchange rate

Like we said earlier, the value of a currency is not fixed and we use forex exchange rates to show this. Basically, this is one currency expressed through some of its counterparts. For example, as we are writing this text, one US dollar is worth 111.91 Japanese yen or 0.8862 euro. From this, you can calculate the relationship between the euro and the Japanese yen and the same principle applies to any two currencies. This is what currency exchange is based on – tomorrow the US dollar may drop below 111.50 yen, for example, or it can go up, which will, in turn, result with a trader’s profit or loss. What you as a trader have to do is find out how the currencies will behave and then invest with the goal of making a profit. The profit may not come immediately because a currency may drop before it rises up again, but if you have reliable information you don’t have to worry. Want to know how to acquire this information? Stay with us, the answer is just below, in the next paragraph of our forex & CFD trading tutorial!

Forex & CFD Trading Tutorial | Metatrader 4

All data concerning forex trading is displayed on your trading platform, a piece of software designed to keep track of numerous forex pairs. Every broker you approach will have it, but none is more famous and more widely accepted than Metatrader 4. This platform offers an abundance of tools and indicators which is what you use to analyze your chart and make a prediction about an asset. Thanks to this, you can approach the market in numerous different ways and come up with various different strategies to help you invest. Everything, including charts, is fully customizable, so every trader can have a unique experience completely attuned to their trading style. Of course, mt4 also has a mobile version, so you can trade while on the move, too. There is also a newer version of this platform called Metatrader 5, but it seems that traders still prefer the classic over the upgraded version. But why exactly is all of this important? Well, that requires a separate paragraph. Keep reading our forex & CFD trading tutorial and find out!

Forex & CFD Trading Tutorial | Technical analysis

The market often repeats the same patterns of behaviour, so if you can predict what will happen next you can also make the right investment decision. The tools we mentioned in the previous paragraph help you do just that. Analyzing the chart through them is what constitutes the so called technical analysis. Given how many factors can affect the global economy, you need all the help you can get if you want to strike it rich. However, this is not an impossible task and with a bit of practice you really can make lucrative investments. Patterns and trends are what you’re looking for in technical analysis and this is all based on statistical data. The tools you use here help you visualize everything on your chart, which in turn allows you to react quicker. You have to keep in mind, though, that unpredictable market events can happen, which can affect your trades. Because of that, no analysis can guarantee a positive outcome 100% of the, but it can help you become profitable, which is what counts at the end of the day. However, there are more things you can use to your advantage, so stay with our forex & CFD trading tutorial a bit more.

Forex & CFD Trading Tutorial | Forex signals

Given how big this industry is, there are various services you can get which are designed to make your life as a trader much easier. Once such service are forex signals and they represent tips about a particular asset from various sources. They are usually free, but you always want to check that they come from a reliable source like a group of experts or specialized websites. Our Binary Winners Club is one such place, so if you want reliable signals with a high success rate, we recommend that you sign up immediately. Keep in mind that forex signals (not just ours, but all signals) are just tips and should be approached as such. What we mean by that is that they may not always yield profit – like we said earlier, it is impossible to be right every single time in this business. But if you’re on the fence about something, an expert advice can help you make the right move. Additionally, forex signals can point you in the direction of an asset you weren’t even considering and open a whole new market for you. Given that you usually don’t have to pay anything for them, they are an additional source of information, which is always good to have in this business.

Forex & CFD Trading Tutorial | Forex robots

Another thing you can use to help you out is a forex robot. These are specially designed types of software you can instruct to open trades in your stead. You simply choose the parameters that interest you, such as the amount you’re willing to invest, forex rates that need to be reached, assets that interest you etc, and the program will open a trade when the market conditions for that are met. This can be an excellent way to make sure you never miss a trading opportunity because you surely won’t be spending entire days waiting for that one good trade to pop up. The robots themselves are also free, but some of them may ask you to open an account with certain brokers if you want to use them. Additionally, keep in mind that forex robots are just that – robots. They will operate only and always within the parameters you set, so you don’t want to leave them unsupervised for too long, especially if the market changes significantly. But as a temporary assistance, they can be excellent. We will now move to a slightly different topic, but a topic that cannot be ignored in this forex & CFD trading tutorial. Don’t go away!  

Forex & CFD Trading Tutorial | CFD

Almost all forex brokers also have CFDs in their offer, which makes this type of trading something we cannot afford to skip in this text. We have a separate article explaining What is CFD trading, but we still feel we need to address this topic here. After all, the tab is called CFD & forex.
CFD stands for contracts for differences and what separates them from other types of trading is the fact that there is no expiration time here. Additionally, your wins and losses are not fixed because they depend on how much a price moves. The more it moves in your direction, the bigger your profit and vice versa. Because of that, you have a much bigger role to play in the trades themselves because you decide when you want to close it. Everything is done on the same platforms and all the same tools can be applied when you’re conducting your analysis, so the only difference is the format of the trades. Feel free to mix things up if you wish, nothing is stopping you from doing so and you should be able to use the same account for both CFD and forex trading. This is simply an extra option most brokers offer. But what exactly is a forex broker? What do you need to know about them? Learn all of that and more in the next paragraph of our trading tutorial.

Forex & CFD Trading Tutorial | Forex brokers

So what exactly are forex brokers? Well, they are companies dedicated to connecting you with the forex market. Their offers will probably differ in terms of assets, financial requirements, spreads, leverage etc, so you should always analyze what they offer closely in order to find the deal that suits your style of trading best. That’s where we come in – you can find loads of very detailed broker reviews on this website, which will save you a lot of time when choosing your broker. Some of the features your prospective broker should definitely have are a valid license from a serious regulatory body, reliable trading platform, loads of available assets and well trained customer support. We analyze these aspects in every review we write, so if you want detailed information you’re at the right place. The industry is huge and there are quite literally hundreds, if not thousands of brokers to choose from. If you’re a beginner, you will appreciate all the help you can get to start trading with the right trading partner, but even more experienced traders will surely find some very interesting information on our website. Just make sure you choose the company you’re most comfortable trading with – after all, this whole industry is about you. With that, we think we have covered the basics about forex brokers and it’s time to move this forex & CFD trading tutorial on. Stay tuned!

Forex & CFD Trading Tutorial | Forex news

Like we said earlier, many different market events can happen that can influence forex rates and the way you perceive a trade. One minute the USD may look strong and then the next something may happen that will bring its value down significantly. It is important to know that the events that affect the forex market do not come just from the financial sector. They can be caused by political decisions or some other occurrences, be they global or confined to the country (part of the world) using the currency you’re interested in. Because of that, it is extremely important to keep up with the forex news. In online trading, having the right information at the right time is the key to success and if you can predict how the market will react to an event then you have an edge that can bring you a lot of profit. Keep track of as much news as you can and try to be pedantic about it because every day something significant will happen in the world. Maybe Donald Trump says something unexpected (again), maybe Japan or China make significant decisions about their economy which can have various effects on the rest of Asia, maybe UK’s negotiations over Brexit don’t go well… There are plenty of possibilities. Websites like ours have special sections dedicated just to covering this kind of things, but some platforms also allow you to receive news when you log in. In any case, try to acquire as much info as you can before you place an investment – that’s an advice this forex & CFD trading tutorial simply could not skip. There is also one more way to collect info, but we will deal with it in the next paragraph.

Forex & CFD Trading Tutorial | Forex calendar

If you want to be a serious trader, you simply cannot function without your forex calendar, so let’s talk about that a bit in this forex & CFD trading tutorial. This is the place where you can take a look at all SCHEDULED market events and plan your strategy accordingly. Unlike forex news, these events are announced weeks ahead or occur on regular basis, which gives the market a certain amount of stability. For example, if you know that the European Central Bank is going to have its monthly meeting or something like that soon, then you can research what the bank will be focusing on, find out the possible outcomes of the meeting and see how they will impact the market. Consequentially, you will be prepared for any outcome and you won’t have to think on the fly. In other words, your forex calendar allows you to always stay a few steps ahead. In an industry such as this one, that can be a huge advantage. Essentially, the research and knowledge that have to go into this part of the business are the two main reasons why this cannot be considered simple guessing, but something that requires skill. With that, we think we have covered all forex basics now, so let’s wrap things up.

Forex & CFD Trading Tutorial | Conclusion

And that’s where we will stop our forex & CFD trading tutorial. Follow the tips we gave you here, utilize as many tools as you can and try to extract as much information as humanly possible from the market. But before you do all that, make sure you go through our reviews to find the right broker. The main principles of forex & CFD trading are not difficult, but the whole thing can get very deep when you consider how many things can influence it. We hope this text has shown you that and that it has shown that you don’t have to rush things. Take your time and prepare yourself and only then make your move. That kind of approach will increase your chances significantly. Just remember to check whether or not the broker you’re interested in is regulated, but most of the companies we review here are completely legit and very reliable partners. If you’re still a beginner, don’t worry – you are in for something spectacular. Step forward bravely and you will discover a whole new world full exciting opportunities for profit. Who knows, maybe this becomes your new career. There are certainly a lot of people who are making a great living from this type of trading right now. In any case, stay with us during your journey and you will always have a reliable partner dedicated to providing you with the right information. Good luck!

Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.