FOREX at IQ Option
The Foreign Exchange Market, or more simply FOREX or FX is the financial market with the highest volume of daily transactions.
Being the largest financial market and regulated since 1970, it is natural that the broker also wanted to have FOREX at IQ Option, in line with a larger offer of products.
Also, the other major online broker, Olymp Trade, has added Forex to its platform.
To get an idea of the size of the FOREX market, it is worth about 5 trillion USD in daily transactions, 10 times more than all the world exchanges combined.
The foreign exchange market – also known as forex or the FX market – is the world’s most traded market, with turnover of $5.1 trillion per day.
To put this into perspective, the U.S. stock market trades around $257 billion a day; quite a large sum, but only a fraction of what forex trades.
Forex is traded 24 hours a day, 5 days a week across by banks, institutions and individual traders worldwide. Unlike other financial markets, there is no centralized marketplace for forex, currencies trade over the counter in whatever market is open at that time.
Have you tried Binary Options with IQ Option?
FOREX at IQ Option -- What is this Market?
The FOREX market is the currency exchange market. It is a market where the assets are currencies. We do not buy or sell a particular currency, but rather a relationship between two currencies.
Assets are therefore pairs of currencies. These currency pairs that are the marketable assets are divided into groups:
The most important is the so-called Majors whose pairs are: EUR/USD, USD/JPY, AUD/USD, and GBP/USD among others.
Then we have the Minors groups that are less important pairs like EUR/GBP or EUR/CHF, and finally, we have the exotic pairs that usually consist of a strong currency with an emerging country currency or a weaker economy. Some examples are EUR/TRY (Euro with Turkish Lira) or USD/SGD (US Dollar with Singapore Dollar).
The overwhelming majority of transactions are made in the majors, with the EUR/USD being by far the pair with the largest volume of daily transactions.
Each pair has its make-up, which is fixed. The EUR/USD is always EUR/USD, there is no USD/EUR.
This market exists to deal with all trade between banks, companies, and people from different countries. Whether it’s a business that exports or imports a product, or when you buy something on the internet that comes from another country, or when you travel for business or pleasure to another country.
This is a daily exchange of people and merchandise and therefore it is easy to realize not only the size of the FOREX market but the necessity of its existence.
In the video below, learn about FOREX at IQ Option
FOREX at IQ Option -- Characteristics of this Market
The FOREX market has some very specific characteristics, starting with its timetable. While for example, in the stock market, each stock market in each country has its own schedule, in FOREX the market is open 24 hours a day, from Monday to Friday.
This is because the FOREX market is a decentralized market. It is not concentrated in one country. Its trading is divided throughout the day into 4 sessions that take turns. So when European the time opens in the morning, all the others are open, then the American session opens.
Later Europe closes and the American remains open and closes later while the Australian session is open and later the Japanese session. Together these 4 sessions make it so that there is always at least one open session. This, allows FOREX trading to be always open, just moving from session to session.
Another feature of the trading in this market is the possibility of entering “Short”. This means that we can start a trade by buying or selling. When we invest in the stock market, in order to make money we have to buy shares of a certain company and wait for it to go down, that is, we first buy and then sell.
On FOREX, I may find that the price of the asset is high, and I open the selling operation, and then I close buying. That is, first I sell and then I buy.
The rates applied in FOREX trading are by default low, which also helps attract many investors.
Another feature that attracts investors is the possibility of leveraging our capital. In FOREX, it is common to use the margin, which is a way of entering higher value transactions with smaller investments. The use of margin has the benefit of higher profits, but also increases the risk of losses.
For example, at IQ Option the maximum margin is 1:1,000. This means that your trade of $1 is a buy or sell equivalent to $1,000. A small 1% movement in the rise or fall of the asset, in terms of gain or loss, does not equate to 1% but to 1,000% (simplifying the calculations).
For a begginer is it better to trade Forex or Binary Options?
FOREX at IQ Option -- Differences between IQ Option and other Brokers
The way you trade FOREX on the IQ Option is really very specific in relation to all the other brokers in the FOREX market.
These features, in my opinion, make FOREX trading at IQ Option safer and simpler for a novice trader to understand.
FOREX at a normal broker:
-- At a normal broker, we buy a lot or a part of a lot. Each pair or asset has a different value, so the price of a lot varies from asset to asset. Knowing that most small investors have $250 to $1000 accounts and a lot has a value of $100,000, sometimes it is tricky to calculate the value of 0.05 of a lot which often causes us to enter with values above the ideal value and thus have a higher risk.
-- In normal FOREX broker, we choose STOP LOSS and TAKE PROFIT (maximum values of losses or gains) in terms of a fixed price where the asset can go. This means that both as a percentage or as an absolute value of gain or loss, we can not know exactly how much we can win or lose.
-- At FOREX brokers we may lose the entire account in one trade. The existence of GAPs or extreme volatilities can lead to a trade taking all the money in the account.
-- FOREX brokers typically have several fees in the form of spreads, swaps, and commissions. These rates vary from asset to asset and even from a Buy to a Sell, which makes it very confusing to know the exact commission we will pay for each trade.
FOREX at IQ Option:
-- Trading FOREX at IQ Option is different because we do not buy lots, nor do we have to do the complicated calculations. We trade with value. Like a bet. Thus, we choose the value we want, so that we can accurately, easily and correctly calculate risk management.
-- Trading FOREX at IQ Option also becomes much simpler in choosing Take Profit and Stop Loss, values that we want to close on gains or losses. This is because we can choose 3 different ways. We can choose how much we want to win and how much we are willing to lose in terms of percentage. We can also choose the amount of gain we want, for example, if we open a position of $10 we can say that we want to earn $20 in this trade.
Then the system will automatically calculate where the transaction will have to close, at what price, so that the profit is $20. In normal brokers, this does not exist. A third way to choose where you want to close in profit or loss is the asset price. You may want to close, for example, on a support or a resistance, and then set the value at which you want to close the operation, whether at a gain or loss.
In addition to being able to choose various ways of calculating what you want to win and where you want to close the transaction, you can still directly move the automatic closing lines up and down by simply moving the automatic closing lines with your mouse. The video above explains this.
-- With regard to losses, trading FOREX at IQ Option is much safer. We bet an amount and can only lose this value. By default, the broker places as a maximum loss of 95% of the bet amount. Thus, you won’t have a problem with making a mistake and placing a close with a large loss and losing your entire account or a large part of it. You only lose most of the amount you wagered.
-- The rates are lower. When trading FOREX at IQ Option you only have to pay the spread. There are no commissions or swaps.
FOREX at IQ Option -- Ways to Trade:
-- We can trade FOREX at IQ Option in manual mode which is the most frequently used. But it is advisable to learn first because it is not easy. If you can, participate in a FOREX training program. There are several FOREX training programs available.
-- We can also use a FOREX signals system. These signals can be used to trade FOREX at IQ Option and you can even get the signals for free or at special prices. Try it now!
-- The use of Robots, very common in the FOREX market is not allowed at IQ Option. On one hand due to the regulation that the broker is subject to. On the other hand, because it uses its own platform and therefore there is no connection to external software.
FOREX robots usually operate 100% automatically. They use an MT4 platform (Metatrader 4). Ask us about Forex Robots.
PLEASE NOTE THAT SOME PRODUCTS AND / OR MULTIPLIERS MAY NOT BE AVAILABLE TO EUROPEAN ECONOMIC AREA INVESTORS DUE TO LEGAL RESTRICTIONS.