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Open 24 hours a day 5 days a week, the foreign exchange market is the largest and most liquid market in the world with volumes of over $4 trillion a day surpassing any exchange based market.
Forex CFD trading involves trading one currency pair against another, predicting that one currency will rise or fall against another. In forex CFD trading, currencies are traded in pairs, like the Euro versus the US Dollar (EUR/USD).
Forex CFDs
Facts
- Over 61 currency pairs
- Tight spreads from 0.0 pips
- Up to 1:30 leverage
- Deep liquidity
- Trade 24 hours a day,
five days a week
Forex CFD Spreads
IC Markets offers Forex CFD traders some of the tightest spreads out of all Forex CFD brokers globally with our EUR/USD spread averaging 0.1 pips. Tight spreads combined with our low latency enterprise grade hardware makes IC Markets the ideal choice for active day traders and those using Expert Advisors. The table at the bottom of this page shows our minimum and average spreads across all CFDs on the major currency pairs.
How does Forex CFD Trading work?
Forex CFD trading is similar to trading CFDs on shares or futures except that when trading forex CFDs you are buying or selling one currency against another and you do not take delivery of the underlying currency. One of the key advantages Forex CFDs have over CFDs on other financial instruments is that relatively small lot sizes can be traded - lot sizes can be as small as 1000 units (one micro lot). Typically, Forex CFD trading also involves leverage which in some cases can be as high as 1:30, which is very different to trading shares where no leverage is involved.
Forex CFD Trading Examples
Selling: CFD on EUR/USD
The gross loss on your trade is calculated as follows:
Opening Price
Closing Price
Gross Loss on Trade
Under Opening the Position:
The price of the Euro against the US Dollar (EUR/USD) is 1.33623/1.33624 and you decide to sell CFDs amounting to 2 standard lots (the equivalent of €200,000) at 1.33623.
Under Closing the Position:
One week later the Euro has risen against the US Dollar to 1.35116/1.35117 and you decide to get out of the losing trade by buying back CFDs amounting to 2 standard lots at 1.35117.
The gross profit on your trade is calculated as follows:
Opening Price
Closing Price
Gross Profit on Trade
Under Opening the Position:
The price of the Euro against the US Dollar (EUR/USD) is 1.33623/1.33624 and you decide to sell CFDs amounting to 2 standard lots (the equivalent of €200,000) at 1.33623.
Under Closing the Position:
One week later the Euro has fallen against the US Dollar to 1.32128/1.32129 and you decide to take your profit by buying back CFDs amounting to 2 standard lots at 1.32129.
Spreads
Forex
Spreads generated from data between 24/05/2021 and 28/05/2021
*Our average spreads are based on data from the last 3 months. Despite our best efforts to provide competitive trading conditions, spreads may be affected by external factors such as news announcements and/or other unexpected events.
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