What are trading and Forex?

Trading means making transactions with financial assets in order to gain from changes in their price.

Put simply, you’re trying to make money on price movements.

Everyone knows the logic of ordinary buying and selling: buy lower → sell higher → keep the difference.

Trading works on a similar principle, but trades are made through a trading terminal and with financial instruments.

One feature of trading is that you have the opportunity to gain both when the price rises and when it falls.

• If you expect the price to rise → you open a Buy trade (a purchase).
• If you expect the price to fall → you open a Sell trade (a sale).

So don’t think of trading only as buying an asset in the hope that it will keep going up.

Forex (Foreign Exchange) is the international currency market.

If you’ve ever exchanged one currency for another at a currency exchange, you already know the principle.

For example: euro → dollar

On Forex, currencies are traded on a global scale through a trading terminal.

On Forex, currencies are traded in pairs.

For example: EURUSD means that the value of the euro is compared against the dollar.

The price of a currency pair shows how many units of one currency correspond to the other. When you open a trade on a currency pair, you’re making a decision about which way its price will move.

The trading terminal offers more than just currency pairs.

Our system uses:

• XAUUSD — CFD on gold against the US dollar
• XAGUSD — CFD on silver against the US dollar
• EURUSD — euro / US dollar
• NZDUSD — New Zealand dollar / US dollar
• USDCAD — US dollar / Canadian dollar
• AUDUSD — Australian dollar / US dollar
• USDJPY — US dollar / Japanese yen
• GBPUSD — British pound / US dollar
• GER40 — CFD on the German index

This means you may be working with several trading instruments at the same time.

Trading instrument — an asset or financial instrument that a trade is made with.

When you open a trade in the terminal, you don’t buy the asset itself. No gold is delivered to a warehouse, and no stake in the German index appears in your account.

CFD (Contract for Difference) — an agreement under which you receive the financial result of a change in an asset’s price without becoming its owner. If the price moves in your favor, the difference is credited to your account; if it moves against you, it’s debited.

That’s why “XAUUSD — gold” doesn’t mean a gold bar, but a contract tied to the price of gold. The same goes for GER40: it’s a contract on the index value, not a stake in the companies.

• The result depends only on the change in price.
• You can open a position on either a rise or a fall in price.
• You don’t own the asset, so there are no dividends and no physical delivery.
• The broker may charge or credit a fee for holding a position overnight; the amount is stated in your account terms.

Trading is not a way to get rich quick.

The price can move in your favor or against you. That’s why systematic trading is based not on trying to guess every market move, but on following rules and controlling risk.

• Trading — working with changes in the price of financial instruments.
• Forex — the international currency market.
• Buy — a trade that counts on the price rising.
• Sell — a trade that counts on the price falling.
• Currency pair — the value of one currency relative to another.

The key point — don’t try to guess every market move; follow the system and control risk.