Access 190 FX pairs across majors, minors and exotics, plus spot metals, from only 0.4 pips. Benefit from extensive charting with 50+ technical indicators, integrated Trade Signals and innovative risk management tools. Fast and reliable access to our range of FX markets from your phone, tablet, laptop, or multi-screen desktop setup. From a single multi-currency account.
Forex Trading with Saxo Markets
1. Ultra-competitive FX spreads. Trade major FX pairs from 0.4 pips. Competitive entry prices and even lower rates for active forex traders.
2. Best-in-class execution. Tier-1 liquidity gives higher fill-rates, fewer premature stop-outs and significant price improvements.
3. Award-winning platform. Benefit from integrated Trade Signals, news feeds and innovative risk-management features.
4. Expert service, trusted for 30 years. With 850,000 satisfied customers, Saxo Group offers world-class service around the clock.
Best-in-class forex execution
Access Tier-1 liquidity to receive higher fill-rates, fewer premature stop-outs and significant price improvements.
1. Tier 1 liquidity. To provide you with the best price possible, we derive our prices from a broad range of Tier 1 institutions. These include banks, ECNs and market-making firms with unique liquidity.
2. Fewer premature stop-outs. To protect you from being stopped out early, we trigger stop orders on the opposite side of the spread, based on a neutral price from a primary inter-bank venue.
3. Significant price improvements. Our fully customised orders offer you greater control over your trading. With no asymmetric slippage, you could benefit from significant price improvements on every forex trade.
4. Full transparency of execution statistics. We fully disclose our dealing practices so you can see how we conduct ourselves in the markets. Our commitment to transparency shows that our interests are aligned with yours.
24-hour expert service
Whether you’re a high- or low-volume trader, you’ll receive first-class support tailored to your needs.
1. Integrated digital support. Access our self-service support centre, email helpdesk and a range of educational courses.
2. 24-hour customer service. Get support for technical matters and account queries whenever markets are open.
3. Relationship managers and sales traders. Active traders benefit from a dedicated point of contact and access to our world-class trading experts.
4. Exclusive VIP services. Receive our very best prices, priority support and exclusive event invitations.
Trusted for more than 30 years
1. Fully regulated. Saxo Markets adheres to the strictest regulatory standards and are authorised and regulated by the Financial Conduct Authority in the UK.
2. Financial strength. Saxo Group are a financially stable company with a robust balance sheet. We serve clients in 170 countries, hold 70+ bn GBP in AUM and process 1m transactions daily.
3. Multi-award winner. We’ve been consistently recognised by our industry and have won the highest accolades for our products, platform and service.
What is Forex?
Forex is a term you may have heard before and whether you are aware of it or not, you have probably taken part in it if you ever travelled abroad and bought a foreign currency, for example. But have you ever stopped to think about what it actually means?
In this article, we delve into the details of Forex trading, from basic Forex terms traders should familiarise themselves with, to types of Forex pairs and more.
So if you want to know more about the world’s largest financial market, keep reading.
In basic terms, foreign exchange or Forex refers to the purchase of one currency against another, but its value is much deeper than that. The Forex market is the world's largest financial market. It is also the most liquid market with an average daily trading volume of $6.6 trillion, making it one of the most actively traded markets in the world.
Spot Forex Market – The physical exchange of a currency pair, taking place on the spot date (generally, this refers to the day of the trade plus 2 days - “T+2”). The spot market involves an immediate exchange of currency between purchasers and brokers. Banks, both central and commercial, and dealers are the main participants in the Spot Forex Market.
Forward Forex Market – An Over Counter (OTC) contract to Buy or Sell a set amount of a currency at a certain price at a future date. This type of market can be very efficient for traders who are looking to hedge by selling their assets at a fixed price in order to avert possible future losses.
Forex Futures Market – The main difference between the spot market and futures market is that futures are legally binding. A forex futures contract is an exchange-traded contract to Buy or Sell a specified amount of a given currency at a predetermined price on a set date in the future. Moreover, this type of market is known for its high liquidity.
Swap Forex Market – It is essentially a transaction (a simultaneous purchase and sale) of Forex pairs in which the parties grant one another an equivalent amount of money using different currencies.
Option Forex Market – Options are contracts whereby the seller gives the right, but not the obligation, to the buyer to buy or sell a Forex pair at a predetermined price. Using a call or a put option allows you to either buy or sell the pair accordingly.
Types of Forex Currency Pairs
As mentioned above, forex is the trading of currency pairs, and can be defined as the simultaneous purchase of one currency against another. Forex takes place mainly on the OTC market; however, it is also traded on futures exchanges.
Majors - Major Currency Pairs are considered the most traded currencies worldwide, hence the naming ‘major.’ Furthermore, this type of currency pair has the highest liquidity and always involves the U.S. Dollar (USD) being traded against other major currencies, namely the Euro (EUR), the British Pound (GBP) the Swiss Franc (CHF), the Japanese Yen (JPY), the Canadian Dollar (CAD), the Australian Dollar (AUD), and the New Zealand Dollar (NZD). The most traded Majors include the EUR/USD, AUD/USD, and USD/CAD.
Minors - Minors are currency pairs that exclude the USD and usually have lower liquidity than the Majors. Examples of Minors are EUR/JPY, AUD/JPY, GBP/EUR.
Exotics - Exotics are usually considered the least traded as they are comprised of currencies that are harder to trade. An example of an Exotic pair is the GBP/SEK.
FX movements can reflect a number of different fundamentals including economic growth, international trade flows, and changes in interest rates.
As popular as the Forex market is, its popularity and its liquidity should not deter you away from learning how to read a currency pair and understanding how the Forex market works in order to make informed trading decisions.
Trading Forex pairs is fundamentally the buying of one currency and the selling of another. The first currency is known as the ‘Base’ and the second currency is known as the ‘Quote’. For instance, if you were to buy the EUR/USD currency pair, it means you are buying euros while selling dollars. Should the euro strengthen against the dollar, then you would make a profit. Conversely, should the euro fall against the dollar, then you would lose money.
The exchange rate is reflected in the quote currency. So, if the EUR/USD is trading at a rate of 1.1322, it means that 1,000 euros can be exchanged for 1,132.20 dollars.
In simpler terms, when trading the EUR/USD, for example, you are essentially asking yourself “how many US dollars does it take to purchase 1 euro?”. Likewise, when trading the EUR/JPY, you are purchasing the Euro, and in doing so, asking yourself the question “how many Japanese yen does it take to purchase 1 Euro?”.
What Moves the Forex Market?
There are many different factors that can affect the forex market. Below you can find a few:
Central banks – The world’s money supply is determined by central banks. If a central bank increases the money supply, the currency will likely drop. Generally, central banks also control interest rate levels, which is critical to the strength or weakness of a currency.
Economic data – Reports on the state of the economy serve as an important indicator of the currency’s strength. Major economic data includes unemployment rates, inflation rates, and trade balances.
Interest rates – Volatile currency moves tend to occur when a country’s central bank makes an unexpected move in interest rates. For example, if a central bank decides to unexpectedly cut interest rates in the currency, this will normally lead to a significant drop in value (as the market responds to the sudden change in monetary policy).
Key Forex Definitions
As previously mentioned, it is crucial for traders to know the basics of Forex trading. Since the Forex market is known for its magnitude, it is impossible to cover all the terms related to it in one article. Nevertheless, the following terms are some of the most important forex-related definitions that you should familiarise yourself with when trading online:
Pip – The lowest increment in which a currency pair is priced.
Spread – The difference between the Buy/Sell (Bid/Ask) price for a currency pair.
Leverage – Allows you to trade higher amounts with less capital, which means that any potential profits or losses will be multiplied. Thus, a leverage of 1:50 means you would need $200 to place a $10,000 trade.
Exchange Rate – The value of a base currency against a quoted currency.
Bid – The price at which the market maker/broker is willing to buy the currency pair.
Ask – The “offer” price used and offered by traders when they intend to buy an asset. Thus, usually this price should be higher than the market’s price.
Popular FX Trading Pairs
In addition to the aforementioned definitions, it may also be helpful to learn the nicknames of the popular foreign exchange pairs.
GBP/USD is commonly named ‘Cable’, a term that originated in the mid-19th century. This is because the USD and the GBP were exchanged through a submarine communications cable.
EUR/USD, the world’s most traded Forex pair, is called ‘Fibre’, a term that emerged with the Euro’s launch.
USD/JPY currency pair is known as trading the ‘Ninja’, due to the fact that the Ninja originated in Japan, the home of the JPY.
USD/CHF is called ‘Swissy’, and USD/CAD is referred to as ‘Loonie’. This is because the $1 Canadian dollar has a picture of the loon bird on its back.
The bulk of FX trading is priced against the USD, which has long been regarded as the world’s official base currency. As mentioned above, all Major Currency Pairs (or Majors) are traded against the USD, and are generally regarded as the most popular currency pairs to trade. Many Cross-Currency Pairs (or Crosses) also experience heavy trading flows including EUR/CHF, EUR/GBP, and AUD/JPY - to mention a few.
In general, the top traded currency pairs are:
EUR/USD – This is the most widely-traded pair with the highest volume and deepest liquidity.
GBP/USD – This is a popular currency pair that tends to be more volatile than EUR/USD. Volatility in GBP/USD has been higher in recent times due to the effects of “Brexit” (Britain's exit from the EU) and the economic uncertainty this has created.
USD/JPY – This is the second most traded currency pair by volume behind the EUR/USD. It experiences high volume due to the size of Japan’s economy and its role in global economic trade. Due to its geographical location, trade in JPY can also reflect economic and geopolitical conditions in the wider Asian region.
How to Choose the Best Currency Pair to Trade?
The world of Forex comes with a myriad of Forex pairs to trade. While the freedom of choice and endless possibilities can help diversify your profile, this can also lead to an overwhelming trading experience. Therefore, before choosing to trade Forex, you must be mindful of your trading strategies, market moves, and other factors that might affect your position.