The foreign exchange (Forex or FX) market is the most traded market in the world with an average daily turnover of approximately 5,3 trillion USD. Exchange rates are formed by the simultaneous purchase and sales of two different currencies (currency pair). Exchange rates are determined by supply and demand of each currency which is influenced by many factors such as world economic and political events, interest rates, trade and speculation.
The forex market is accessible 24 hours a day, and it operates through a global network of private entities, corporations and banks. Its nonstop operation offers you a unique opportunity: instant reaction to latest financial news.
Forex is the unique combination of trading, investing and exchanging currencies according to specific rates. With its huge trading volume, global presence, the low trading fees compared to other financial markets, and the use of leverage for profit margin increase make the Forex market unparalleled.
An index is an imaginary portfolio of securities representing a particular market or a portion of it.
Usually, those are the securities which are the most traded on the market and which have the highest turnover.
Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value.
Most equity Indices are cited either in financial news or by financial services providers. They are used to measure investment portfolio performance (e.g. mutual funds), and indicate investor sentiment on the economy as a whole.
Widely used by both financial professionals and individual investors, trading on multiple Indices offers a wide diversification of industrial sectors and national economies.
Commodities – the oldest market in the world because the first stock exchange trading Commodities was created as early as the 12th century!
With Commodities markets of the 21st century, you can participate in the global trends of oil and gold prices from home, anytime you want. And do not worry, there is no physical delivery.
The history of Commodities trading starts with the agricultural traditions of the early civilizations. Nowadays, raw or primary products such as gold, silver and oil are exchanged on the Commodities markets, using highly sophisticated electronic trading systems. The significant part of the market turnover is constituted by companies that sell or buy goods in direct relation to their actual economic activity, such as mines, farmers and heavy industry.
Commodities can be traded both on regulated stock exchanges, typically using futures contracts for speculative purposes, and on the OTC market, for example using Contracts for Difference.
Commodities prices are related to the important economic factors on an international scale, such as inflation and economic conditions. The more dynamic the global economical development is, the higher the demand is for energy, represented by the markets such as oil and gas, agricultural products, luxurious or high-end technological products made of gold and silver and other.
The world’s biggest physical Commodities stock exchange is in New York (NYMEX).
Commodities markets have experienced a dynamic growth of turnover during the first decade of the XXI century, as OTC derivatives.
CFDs (Contracts for Difference) are based on a two-party agreement (between buyer and seller) to exchange the difference between the opening and the closing price of a financial instrument according to specific conditions. CFDs are trading instruments suitable for speculation on several financial instruments, including equity indices, energies, commodities and metals without actually owning them.
You can go long (buy) when you expect a rise in the market prices, or go short (sell) when you anticipate a fall in the market prices, and increase your profits in line with the price falls.
In anticipation of potential loss in your portfolio value, CFDs can be used to offset loss by going short. Especially in volatile markets, portfolio hedging is a great advantage of CFDs. Supposing you have Johnson&Johnson shares worth USD$10,000, for instance, you can sell the USD$ 10,000 equivalent of these shares through a CFD trade. In case Johnson&Johnson prices have a 10% fall in value in the market, the loss in value of your shares can be balanced by the gain in your CFDs.
As leveraged products, CFDs mean potential return on investment through high leverage. They enable you to open your position by paying only a small fraction of the total contract value. It is also true, however, that the market can move against you and potentially increase your losses.
Exchange traded Fund – ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.
By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you’d pay on any regular order.
One of the most widely known ETFs is called the Spider (SPDR), which tracks the S&P 500 index and trades under the symbol SPY.
The main difference between ETFs and other types of index funds is that ETFs don’t try to outperform their corresponding index, but simply replicate its performance. They don’t try to beat the market, they try to be the market.
ETFs have been around since the early 1980s, but they’ve come into their own within the past 10 years.
Advantages of trading Forex with Exodus Trade
- Market open 24 hours from 23:00 CET Sunday to 22:00 CET Friday.
- Trade as many as 48+ forex pairs
- No minimum deposit.
- Leverage up to 200:1
- Hedging and scalping: Yes - available in all styles
- Tight spreads and NO re-quotes
- Lot size: starting already from 0,01 lot - micro lot
- Account currency base: USD
- NO extra commissions or hidden costs