Forex Training

Class 1

Forex Market Overview

The global marketplace has changed dramatically over the past several years. New investment strategies are becoming more important in order to minimize risk, as well as to maintain high portfolio returns. Among the most rewarding of the markets opening up to traders is the Foreign Exchange market. Identifiable trading patterns, as well as comparatively low margin requirements, have rewarding trading opportunities for many.  

In contrast to the world’s stock markets, foreign exchange is traded without the constraints of a central physical exchange. Transactions are instead conducted via telephone or online.  With this transaction structure as its foundation, the Foreign Exchange Market has become by far the largest marketplace in the world.  Average volume in foreign exchange exceeds $1.5 trillion per day versus only $25 billion per day traded on the New York Stock Exchange. This high volume is advantageous from a trading standpoint because transactions can be executed quickly and with low transaction costs (i.e., a small bid/ask spread).  

As a result, foreign exchange trading has long been recognized as a superior investment opportunity by major banks, multinational corporations and other institutions.  Today, this market is more widely available to the individual trader than ever before. 

Spot foreign exchange is always traded as one currency in relation to another.  So a trader who believes that the dollar will rise in relation to the Euro, would sell EURUSD.  That is, sell Euros and buy US dollars.  CBF has compiled the following guide for quoting conventions:

Symbol     Currency Pair     Trading Terminology
GBPUSD   British Pound / US Dollar   "Cable"
EURUSD   Euro / US Dollar   "Euro"
USDJPY   US Dollar / Japanese Yen   "Dollar Yen"
USDCHF   US Dollar / Swiss Franc   "Dollar Swiss", or "Swissy"
USDCAD   US Dollar / Canadian Dollar   "Dollar Canada"
AUDUSD   Australian Dollar / US Dollar   "Aussie Dollar"
EURGBP   Euro / British Pound   "Euro Sterling"
EURJPY   Euro / Japanese Yen   "Euro Yen"
EURCHF   Euro / Swiss Franc   "Euro Swiss"
GBPCHF   British Pound / Swiss Franc   "Sterling Swiss"
GBPJPY   British Pound / Japanese Yen   "Sterling Yen"
CHFJPY   Swiss Franc / Japanese Yen   "Swiss Yen"
NZDUSD   New Zealand Dollar / US Dollar   "New Zealand Dollar" or "Kiwi"
USDZAR   US Dollar / South African Rand   "Dollar Zar" or "South African Rand"
GLDUSD   Spot Gold   "Gold"
SLVUSD   Spot Silver   "Silver"

Spot Forex versus Currency Futures

Many traders have made the switch from currency futures to spot foreign exchange ("forex") trading.  Spot foreign exchange offers better liquidity and generally a lower cost of trading than currency futures.  Banks and brokers in spot foreign exchange can quote markets 24 hours a day.  Furthermore, the spot foreign exchange market is not burdened by exchange and NFA ("National Futures Association") fees, which are generally passed on to the customer in the form of higher commissions.  For these reasons, virtually all professional traders and institutions conduct most of their foreign exchange dealing in the spot forex market, not in currency futures.

The mechanics of trading spot forex are similar to those of currency futures.  The most important initial difference is the way in which currency pairs are quoted.  Currency futures are always quoted as the currency versus the US dollar.  In Spot forex, some currencies are quoted this way, while others are quoted as the US dollar versus the currency.  For example, in spot forex, EURUSD is quoted the same way as Euro futures.  In other words, if the Euro is strengthening, EURUSD will rise just as Euro futures will rise.  On the other hand, USDCHF is quoted as US dollars with respect to Swiss Francs, the opposite of Swiss Franc futures. So if the Swiss Franc strengthens with respect to the US dollar, USDCHF will fall, while Swiss Franc futures will rise.  The rule in spot forex is that the first currency shown is the currency that is being quoted in terms of direction.  For example, "EUR" in EURUSD and "USD" in USDCHF is the currency that is being quoted.

The table below illustrates which spot currencies move parallel to the futures contract and which move inversely (opposite):

   Currency Pair   Futures
GBPUSD   British Pound / US Dollar   BP   Parallel
EURUSD   Euro / US Dollar   EU   Parallel
USDJPY   US Dollar / Japanese Yen   JY   Inverse
USDCHF   US Dollar / Swiss Franc   SF   Inverse
USDCAD   US Dollar / Canadian Dollar   CD   Inverse
AUDUSD   Australian Dollar / US Dollar   AD   Parallel
NZDUSD   New Zealand Dollar / US Dollar   ND   Parallel



 Margins start as low as % 0.5 (optional)
Client's of the CBF accounts between US$ 3,000 to US$ 20,000 will get a leverage margin of %0.5 as an option, between US$ 20,001 to US$ 50,000 will get a leverage margin of %1 as an option, and from US$ 50,001 will get leverage margin of %2. (NOTE: %2 is the default margin of all mentioned accounts).
Spreads start as low as 1
In CBF Trading system spreads start as low as 1 in Forex. You can read full list in the CBF Trading - Market Sheets.
CFD and Forex
Client's can trade now with CFD's (equities, indices, commodities, bonds, interest rates, forex, inflation). The hedging facility is available on all instruments.
Commission-Free trading
CBF do not charge a commission on its services and you can read about the Free commission by walk through CBF Trading - Market Sheets.
US$ 3,000 Minimum to open account
Live account with CBF Trading start from minimum deposit of US$ 3,000 only.
Dedicated accounts
CBF Trading Division is a part of Century Brothers Financial Limited, the trading giant in the financial industries and the first company offering dedicated accounts for the US$ 100,000 clients with independent third party "AA+" banks and high security solutions for any other clients fund.
All in one platform
Within one account you can trade CFD and Forex. In CBF Trading system competitive pricing on multi financial instruments, including indices, real-time margin calculation and risk-management notifications, easy software and technology for complete trading confidence, visual trading and one-click order entry, and place trailing stops and other order types to help manage your risk. You will get totally FREE services such as real time quotes, real time charts, analytics, and multi languages.
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Legal Disclaimer: Century Brothers Financial Limited is an authorized financial company in British Virgin Islands. Registration number 1458255 issued by BVI Financial Services Commission (FSC), Registrar of Corporate Affairs under the BVI Business Companies Act, 2004. However, Century Brothers Financial Limited and its trading division ("CBF Trading") do not trade for or on-behalf of the clients who will trade directly to the market using CBF Software only.

Century Brothers Financial Limited and its trading division ("CBF Trading") do not hold any of the clients treads. The liquidity of CBF Trading prime is offered directly from a number of prime world wide banks (Up to 16 "A+" level banks and above), for that Century Brothers Financial Limited and its trading division ("CBF Trading") are not concerned of clients profits or risk. So CBF Trading is the most transparent trading system in the market. Click here for an important risk disclaimer and website warning.

Century Brothers Financial Limited and its trading division ("CBF Trading") are not agent and/or affiliated to any financial or trading company.

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