Forex Trading Instruments

What is Forex Trading?


Forex Instruments are currency pairs that can be traded on international currency markets, these markets are over the counter (OTC). Currency markets are the most liquid in the world, making them one the cheapest markets for active traders to trade. Forex pairs can be traded on time frames ranging from seconds to months. There are a wide range of global market factors influencing currency movements.

EightCap Forex Trading

EightCap enables its clients to access over 40 currency pairs. The major currency pairs make up the most liquid and popular pairs in the market and can all be accessed via EightCap’s trading platform.

Major Forex PairsTrading SymbolTrading Hours (Server Time)
US Dollar vs Japanese YenUSD/JPY24 hours
US Dollar vs Swiss FrankUSD/CHF24 hours
US Dollar vs Canadian DollarUSD/CAD24 hours
Euro vs US DollarEUR/USD24 hours
Pound Sterling vs US DollarGBP/USD24 hours
Australian Dollar vs US DollarAUD/USD24 hours
Major Forex PairsTrading SymbolTrading Hours (Server Time)
US Dollar vs Japanese YenUSD/JPY24 hours
US Dollar vs Swiss FrankUSD/CHF24 hours
US Dollar vs Canadian DollarUSD/CAD24 hours
Euro vs US DollarEUR/USD24 hours
Pound Sterling vs US DollarGBP/USD24 hours
Australian Dollar vs US DollarAUD/USD24 hours

Pros and Cons of Trading Forex

Advantages of trading Forex

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Most liquid trading market in the world.

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Some of the lowest costs involved in trading with highly competitive spreads on offer.

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Leverage of up to 500:1 can enable traders to profit from incremental price movements.

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Open short and long positions in market with small or large amounts of capital.

Disadvantages of trading Forex

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Forex trading is competitive and requires time and commitment to become proficient.

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Using leverage irresponsibly can lead to losses where a large portion of your investment can be lost if the market moves against you.

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Past performance of strategies is not an assurance of future performance.

EUR/USD Pair

The most heavily traded currency pair in the market. It also typically has the lowest spread in the forex market. It can have lower volatility than most forex pairs, although the European crisis has led to some strong trends and occasional periods of volatility. Traders often use technical trading tools to trade the EUR/USD.

USD/JPY Pair

The Japanese currency is viewed by many as a safe haven and can appreciate when investors become risk averse. It also tends to underperform when the global economy is performing well. For these reasons, many traders use the pair to trade based on global macro-economic factors.

GBP/USD Pair

This pair is the oldest currency pair to have been traded globally. While volatility was historically low, it has increased since the European economic crisis and the Brexit referendum. It can be a very profitable pair to trade, but comes with increased risk. Trading the GBP/USD, you will also need to keep an eye on potential action by the Bank of England as well as the US Fed.

AUD/USD Pair

Australia is one of the world’s leading commodity exporters, and the Aussie is therefore highly correlated with commodity prices. This means it exhibits strong trends due to the cyclical nature of the commodity industry. It’s an excellent pair to trade global economic themes, but is also very liquid, making it suitable for short term trading too.

USD/CHF Pair

The Swiss Franc is also viewed as a safe haven currency, and as such tends to appreciate when markets become risk averse, and lose ground when risk appetite increases. Traders often use this pair to trade around geo-political events and potential economic crises.

USD/CAD Pair

The Loonie is another currency that is highly correlated with commodity prices, and in particular, oil. It’s also affected by the interest rate differential between the US and Canada. Traders often use this pair to speculate on energy prices, often employing trend following strategies.

Other Currency Pairs

Once you are comfortable trading these major currency pairs you may want to look at the forex minors. These are made up of different combinations of the same currencies and include the EUR/GBP, EUR/CHF and GBP/JPY pairs.

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Head Office:
Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.