Summer is on its way and more of us will be traveling abroad 🏝 ⛱️, we'll need Euros, US Dollars, Australian Dollars or other currencies depending on where our vacations take us.
We recently touched on commodities in our #GetGoNews post Did Someone Say Commodity Trading?
Today we'll talk about Forex, the largest and most liquid asset class in the world, also referred to as forex exchange, FX or currency trading, which allows you to speculate on price movements in the global currency market.
Basically, when we go overseas we make forex transactions.
An everyday story
Let's say Warren was going to Ibiza on his summer break and was needing to exchange pounds for euros - how would that work? The forex exchange rate, which continuously fluctuates driven by supply and demand, will determine how many euros Warren gets.
One week before his trip, Warren is doing a bit of planning and transfers his holiday budget of £1,000 to his Spanish bank account. At that time, the exchange rate is 1 GBP = 1.14 EUR and Warren receives £1,140 in his bank account. A week later, on his way to the airport, something grabs Warren's attention - the exchange rate has changed to 1 GBP = 1.24 EUR 😲.
What do you think Warren's reaction would be? Well... if he'd waited to exchange his money, he would now have more euros for his week in Ibiza, for instance £1,240, more tapas, paella and beer.
As simply explained in the example above, currency movements can generate trading opportunities and allow you to bet on the value of a currency against another which is why currencies always appear in pairs, i.e. GBP/EUR (sterling vs. euro). The first currency, the base, is the one you think will go up or down against the second, the quote currency, when placing a trade.
Buying and selling currency
Over 80% of GetGo signals are on Forex - they will tell you, based on past patterns, whether you should expect the base currency to go UP or DOWN against the quote currency in the signal time window.
When you trade a signal that's suggesting that the base currency will get stronger (UP) you are buying the currency pair, on the contrary when you are trading a signal which tells you the base will get weaker (DOWN) you are selling a currency pair. For example, if you trade the following GetGo's signal "AUD/USD, 80% UP with a Risk/Reward rating of £ and an 'End at' time of 17:15", you expect the Australian Dollar to get stronger against the US Dollar before 5.15pm. Let's also say that the Trigger Price was 7,690.6 and you set a Trade Size of £1.25, if the price goes up to 7,696.0 your profit would be (7,696.0 - 7,690.6) x £1.25 = £6.75; on the other hand, if the Live Price moves down, for example, to 7,686.0, you'd incur in a loss (7,686.0 - 7,690.6) x £1.25 = - £5.75 ☹️.
Remember - if it's a DOWN signal, you can make a profit or loss from that as well - the calculations are the same!
FX trading on GetGo
People trade more than 3 trillion dollars on the forex market every day, and you can do it 24 hours a day! But when is the best time to trade? GetGo pings you a signal each time the algo identifies a trading opportunity, therefore monitoring the markets all day long is a thing of the past.
There are more than 100 FX pairs to trade on - but where to start? GetGo does the hard work for you, it lets you know which markets are showing emerging patterns and guides you towards real-time trading opportunities. Visit the Product Information page to check all currency pairs GetGo offers.
The size and volatility of FX pairs can vary massively - with so many markets, how do you understand the potential volatility associated with each signal? GetGo's Risk/Reward rating on each signal (min=£; max=£££££) tells you how much the market price is expected to move during the signal window, so you're more informed before you GetGoing.
The GetGo team
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