AvaTrade Forex review by FX experts, All about AvaTrade Forex trading broker like what is AvaTrade Forex spreads or how to open AvaTrade Forex trading account, At the end of this AvaTrade Forex broker review if it helps you then help our team by share it please, For more information about AvaTrade Forex account review you can also visit AvaTrade review by ForexSQ.com forex website.
AvaTrade Forex review
Foreign Exchange trading, also known as Forex or FX trading, has gained enormous popularity in recent years among layman individuals due to the growth of online brokers and the technological development of online trading platforms. With high liquidity, non-stop opening hours 5 days a week, and great opportunities, it is no wonder that the forex market is the world’s most traded market with a daily trading volume of $5 trillion USD.
What is FX Trading?
The Basic Concept
When trading Forex, you are buying one currency by using another. Therefore, the FX trader is trading currency pairs and not each currency individually. Take for example the EURUSD, when buying the pair – it means you are buying EUR using (selling) USD. When selling the pair – it means you are buying USD using (selling) EUR.
The pairing of the currencies is presented as a rate, which reflects the ratio between the values of the two currencies. For instance, the rate for buying the pair GBPUSD is 1.50514, i.e. £1 GBP = $1.50514 USD.
Forex Pairs Groups
The Forex pairs are divided into three main groups – majors, minors and exotic pairs. The main difference between the pairs is their liquidity which is a result of the trading volume of these pair. E.g., the major currency pairs are the most traded pairs and each include the USD and another currency, while the most traded minor pairs include one of the three major non-USD currencies (The Euro, the UK Pound and the Japanese Yen).
How to trade FX with AvaTrade
AvaTrade Forex Trading Platforms
AvaTrade offers a selection of trading platforms, for both automated and manual trading, with unique features and tools to optimize your trading experience. Whether you are interested to trade on your own, or copy the trades of others, our selection caters to all traders, where you are sure to find the one for you. We also offer the option to open a demo account on each platform, where you can practise trading on your platform of choice and master your trading skills, before you start trading in the real market with your own money.
AvaTrade Forex Leveraged Trading
The ability to hold larger trading positions than what one’s own capital allows is enabled through leverage given by the broker. At AvaTrade, traders can enjoy up to 400:1 leverage on most forex pairs. This means that a trader needs only 0.25% of a position size in order to open a position.
For example, if the EURUSD pair is traded at a buying price of 1.1123. To open a position of 100,000 units of the instrument, a trader needs €111,230 Euro, or $123,721.12 USD. However, thanks to leveraged trading, the trader will need only 0.25% of this position, i.e. €278.07 Euro, or $309.30 USD. The ability to leverage one’s position is a great advantage which can magnify a trader’s profits. However, one should always have in mind that losses can be magnified as well.
How to Calculate the Cost of a Forex Trading Position?
When a trader opens a position at AvaTrade, he is not charged any other commissions beside the spread. The spread is the difference between the buy and sell price which is counted in pips – the fourth digit after the dot. For example if the buy price of EURUSD is 1.1123 and the sell price is 1.1120, then the spread is 3 pips. The spread charged for a position opened by a trader is the spread multiplied by the size of the position.
AvaTrade’s clients can choose between trading forex with fixed spread versus trading with floating spreads, which are flexible and changing. AvaTrade offers spreads from as low as 0.8 pips.
AvaTrade Forex review
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