Trading Forex Via CFDs

Frequently Asked Questions

• 1

  Is forex trading an option for beginners?

  Forex trading can be an appealing option for beginners who are eager to learn and understand the currency financial markets. This is because the forex markets can be traded with small amounts of capital, as the use of leverage allows traders to control larger positions, with limited capital. Traders can also trade small lot sizes, starting from 0.01 lot.
  
  Moreover, the forex market is easily accessible online, allowing beginners to trade conveniently from anywhere with an internet connection. Brokers like Vantage also provide educational resources ranging from online courses, webinars and educational articles. These resources can help beginners to learn about trading fundamentals, technical analysis as well as the tools and indicators used in forex trading.
  
  By dedicating time to learning and practising, beginners can build a solid foundation and improve their trading skills. However, it is important for beginners to exercise caution and conduct their own due diligence before engaging in any trades. Like any form of trading, forex trading carries inherent risks, particularly if you trade with leverage. Here’s a beginner’s guide to trading forex.

• 2

  How do I start trading forex as a beginner?

  Beginner can start forex trading with just a few simple steps:
  

  1. Find a reliable broker to trade with

  As a beginner, you can do your own research on the offerings of different brokers, including their account options and the features of their trading platforms. This will help you to find the one that best suits your needs and preferences.

  Some key factors to look out for in a broker include:
    - Low fees
    - Wide variety of trading products
    - Fast execution speed

  
  

  2. Open a demo account

  Practise trading forex on the demo account offered by the broker. This allows beginners to gain trading experience by making trades using virtual credit.
  Alternatively, if you’re a seasoned trader, you can go straight to opening a live account with Vantage.

  
  

  3. Educate yourself on forex trading

  Take advantage of online courses, webinars, and educational articles offered by the broker. Use this opportunity to learn and enhance your knowledge about forex trading. Visit Vantage Academy for the latest forex trading articles.

  
  

  4. Open a live account and start trading

  Once you feel confident enough to trade the live markets, open a live account with the broker and fund your account to start trading forex.

• 3

  Can I start forex trading with a small amount like $100?

  Yes, it is possible for you to start trading forex with as little as USD$100. Many brokers like Vantage offer trading accounts that allow traders to start with a small initial capital.
  
  With a Vantage live account, you have the option to begin trading with a minimum deposit of USD$50. However, the specific amount required to trade forex will vary based on factors, such as the type of forex pairs, leverage employed, and your personal risk tolerance.

• 4

  What are the pros and cons of forex trading?

  Forex trading offers some unique advantages:

  
  

  a). 24-hour market

  Enjoy the convenience of round-the-clock trading with the forex market. Unlike stock or commodity markets, it operates 24 hours a day, five days a week, allowing you to trade at your preferred time, whether it's morning or night.

  b). High liquidity

  The large trading volume in the forex market represents high liquidity for traders. This also means there are a large number of buyers and sellers at any time of the day. So, under any usual market conditions, you can instantly open or close your trade.

  c). Low trade costs

  Forex markets typically have very narrow spreads – the difference between the bid price and the ask price and what a broker will charge. This reduces the costs you incur for your trade, leading to potential greater profit margins.

  d). Leverage

  Traders have the option to utilise leverage, which allows them to amplify their trading potential beyond their initial deposit. Leverage enables traders to open positions in the forex market by providing only a fraction of the total value of the position upfront.

  Read more about the advantages of trading forex here.

• 5

  What is leverage in forex trading and how does it work?

  Leverage is a tool that allows traders to control larger positions using a smaller amount of capital. This is usually expressed as a ratio, such as 50:1, where the first number represents the amount you can control, and the second number represents the capital you have.
  
  To illustrate this concept, let's have a look at an example:
  Imagine you have $100 and use a leverage of 50:1. With this leverage, your $100 investment can control a position valued at $5,000. This means that you can potentially take advantage of the price movements of a much larger position than you could not have accessed with your initial capital alone.
  
  However, please bear in mind that leverage is a double-edged sword, as it not only magnifies potential profits but also amplifies potential losses. To gain a deeper understanding of how leverage operates in forex trading, you can learn more here.

• 6

  Which is better for beginners? Forex or Stocks?

  Both forex and stocks have their pros and cons. Forex trading offers benefits such as a 24-hour market, high liquidity, and lower entry costs. Stocks, on the other hand, provide opportunities to invest in well-known companies. Trade popular US shares like Palantir and Nvidia with $0 commission today.*
  *Other fees may apply.
  
  At Vantage, you can trade both forex and stocks via CFDs with our user-friendly platform, educational resources, and competitive spreads.

• 7

  How many hours a day can you trade forex on Vantage?

  At Vantage, you can trade forex 24 hours a day, 5 days a week. The market opens Sunday evening (GMT) and closes Friday night (GMT), giving you flexibility to trade at any time.

• 8

  When not to trade forex?

  Avoid trading forex during:
  

  • Low liquidity periods (e.g., weekends or major holidays).
  • High-impact news events (e.g., economic reports or central bank announcements), as volatility can be unpredictable.
  • When you’re unsure or unprepared—always trade with a plan.

• 9

  Which currency pairs are best to trade?

  Beginners can consider trading major pairs like EUR/USD, GBP/USD, and USD/JPY. They are highly liquid, have tight spreads, and are potentially less volatile compared to exotic pairs. However, the ‘best’ currency pair to trade varies based on an individual’s goals, risk appetite and other factors.
  
  At Vantage, you can trade a wide range of currency pairs via CFDs with competitive pricing and fast execution.