The Difference between CFDs and Forex: What Beginners Should Know

The term "forex" — also known as foreign currency trading, currency exchange or by its acronym "FX" — refers to foreign exchange or to transactions between currencies.

Today, forex is considered to be the most important exchange market in the world, with over $7.5+ trillion traded every single day — making it by far the largest financial market on earth, with the BIS Triennial Survey 2025 recording a record $9.6 trillion in daily turnover in April 2025. The combined volumes of all the stock markets in the world do not even come close to this figure. That said, the CFD market is also quite extensive.CFD trading has grown into a significant global market, with retail FX/CFD monthly volumes exceeding $30 trillion as of 2025 and an estimated 19 million active retail traders worldwide. So, it's worth taking a closer look at both markets.

Now, it seems that everyone has come across a currency exchange in one way or another, the obvious example being when people travel to another country and exchange their currency for the local one. But when it comes to trading, there are more nuances to take into consideration.

Background information

Let's start by establishing the basis of currency trading. The price of each currency varies depending on its demand in relation to other currencies. In other words, the more in demand a given currency is, the higher its price will be and vice versa. And when you access a decentralised currency marketplace, you can trade all the major world currencies. You will be alongside a wide range of different market actors, from the world's largest financial institutions dealing in big money transactions all the way to ordinary people converting a few dollars here and there. But they all have the same end goal — they either want to buy a currency and then sell it for more than they paid or else sell a currency and then buy it back for less money.

By understanding who participates in these markets you can trade more effectively. The forex and CFD markets bring together a wide range of actors whose activity drives price movements at every level.

Central banks — such as the US Federal Reserve or the European Central Bank — operate with the largest capital and the longest time horizons. Their monetary policy decisions directly move currency values. Commercial banks facilitate the bulk of interbank transactions, setting the baseline exchange rates that retail platforms reflect. Hedge funds deploy high-volume algorithmic and macro strategies that can shift market momentum rapidly. As a retail trader, understanding this institutional activity helps you avoid trading against dominant trends driven by large-scale flows.

Retail traders — individuals using broker platforms — represent a smaller capital base but make up a significant portion of total trade volume collectively. Strong risk management discipline and ongoing education are essential at every participation level.

Switching over to CFDs, these are time-limited contracts that derive their value from the market performance of assets, which can be currency pairs or other assets (stocks, indices, commodities, cryptocurrencies, etc.). Since CFD trading is a popular form of derivatives trading, you don't buy the assets themselves, which is why we use the term "underlying asset". For example, in the case of a EUR/GBP CFD trade, you won't own these currencies. Instead, you only trade on the rise or fall in their price within a certain amount of time. Usually, the duration of a contract spans a relatively short period.

To join the ranks of those already trading on currency exchange or CFD markets, all you need is a computer, an internet connection, and a trading account to complete your transactions. Of course, you will also need to learn about CFD trading and practice.

How does forex trading work?

The aim of forex trading is to speculate on the changes in the value of one currency relative to another. You can do it by buying a currency and then selling it at a higher price, or by first selling it and then buying it back at a lower price.

Before diving into currency pairs, it helps to understand what an exchange rate actually is. An exchange rate is the price of one currency expressed in units of another. It is driven by four main factors: interest rate differentials between countries, inflation levels, GDP growth, and trade balance flows. When you see the EUR/USD quoted at 1.1017–1.1019, that quote is the exchange rate in action — it tells you exactly how many US dollars are needed to buy one euro at that moment.

To understand how this works in practice, you need to understand what exactly a currency pair is. Currencies are priced relative to other currencies. If you buy Euros (EUR), the price you pay will depend on whether you are exchanging US Dollars (USD), British Pounds (GBP) or another currency for those Euros.

A currency pair consists of a base currency and a counter or reference currency. The base currency is the first currency in the quote, and the counter currency is the second. The counter currency is the reference currency in which the base currency is being quoted.

Let's take an example of the EUR/USD being quoted at 1.1017-1.1019. In this example, the EURO is the base currency, and the USD is the reference currency. The Euro price is being quoted in USD. So, you would pay 1.1019 USD to buy 1 Euro. If you wanted to sell 1 Euro, you would receive 1.1017 USD.

For most pairs, the most liquid currency is usually quoted first. However, when the USD is paired with the British Pound, Euro, New Zealand Dollar, or Australian Dollar, the USD is quoted second.

If the base currency is a foreign currency, the quote is known as a direct quote. If the base currency is the domestic currency, the quote is known as an indirect quote.

Currency pairs are divided into three categories:

• The most widely traded currency pairs in the world are known as the majors. They include the EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. You will notice that these pairs all include the USD.
• Currency pairs that include two of the currencies listed above but not the USD are known as minor currency pairs. These pairs are also known as cross-currency pairs or crosses. Examples include EUR/GBP, AUD/JPY and GBP/CAD.
• Exotic currency pairs include one major currency and one other. The second currency is usually the currency of a developing nation like Turkey, Thailand or South Africa. However, exotic currencies also include those of quite developed nations like Singapore and Hong Kong.

An important aspect of forex trading is liquidity. If two countries have a healthy trading relationship, the currency pair of their two respective currencies should be very liquid. On the other hand, a currency pair that includes the currencies of two countries that don't have trading relationships may be illiquid.

The major and minor currency pairs are the most popular to trade due to high liquidity levels. These pairs can be traded on any time frame as the spread is narrow. Exotic pairs can be traded but require larger price movements to cover trading costs. This means you will need high levels of volatility or a longer time frame.

It is also worth understanding the structure of the forex market itself. Unlike stock exchanges, forex is traded over-the-counter (OTC), meaning there is no central exchange. Instead, transactions occur directly between institutions via electronic networks, with retail traders accessing the market through broker platforms. The key advantage of this structure is 24-hour access, five days a week. The key risk is counterparty risk: if your broker is unregulated and becomes insolvent, your funds may not be protected, which is why choosing a regulated broker matters.

How does CFD trading work?

As mentioned, CFD trading allows you to speculate on the rises and falls of fast-moving financial markets (or instruments), such as stocks, indices, commodities, currencies, and other liquid assets. But we have not yet explained how the trades take place.

CFDs give you access to a broad range of asset classes from a single trading account. These include:

• Forex pairs — accessible for beginners due to the highest global liquidity
• Equities (shares) — individual company stocks from global markets
• Stock indices — track the performance of a basket of stocks, such as the FTSE 100 or S&P 500
• Commodities — including gold, silver, oil, and agricultural products
• Cryptocurrencies — such as Bitcoin and Ethereum, no crypto wallet required
• ETFs — instruments that replicate the price of exchange-traded funds, giving exposure to diversified baskets of assets in a single trade

Each asset class carries a different risk profile, liquidity level, and cost structure. For beginners, starting with major forex pairs or CFDs on highly liquid instruments is generally the most manageable entry point.

When you enter a CFD trade, you buy or sell a number of units for your chosen financial instrument, depending on the direction you believe the price will move in the future. If you think the price of the underlying asset will go up, you will enter a long trade. If you believe the price will fall, you will enter a short trade. For every point the price of the underlying asset moves in the expected direction, you gain multiples of the number of CFD units bought or sold previously. If the price moves in the opposite direction from what is expected, you will make a loss.

In the case of CFDs in currency pairs, a long position means you are buying the base currency, and you are effectively short of the reference currency. The price will rise if the base currency strengthens or if the counter currency weakens. You will profit if you close the position at a higher price (this is the best-case scenario, and it's not guaranteed).

If you open a short position, you are selling the base currency and buying the reference currency. The price will fall if the base currency weakens or if the counter currency strengthens. You can make a profit by closing the position at a lower price (but this isn't guaranteed, either).

It's also worth mentioning that CFDs are part of a group of derivative financial products which permit the use of leverage. However, traders should have some previous experience of using leverage before trying it with CFDs, as profits or losses could considerably exceed the amount invested.

Example of buying a CFD on a currency pair

You want to buy CFD units for EUR/GBP (0.8480/0.8490) worth €20,000, expecting the underlying instrument to go up. Let's assume the broker has a margin rate of 3.24% for EUR/GBP. So, you must deposit 3.24% of the total position value as position margin to open the trade. In this trade, your position margin will be: (3.24%*(20,000*0.8485)) = £549.82

If you guess the price movement correctly:

Let's say, over the next hour, the price rises by 50 points. In this case, you will make: £20,000*0.0050 = £100

If you guess the price movement incorrectly:

If the price falls by 50 points, you will lose £100.

Example of selling a CFD on a currency pair

In this scenario, you expect the value of EUR/USD (1.0680/1.0690) to fall, perhaps due to some kind of economic turmoil in Europe. So, you want to sell CFD units worth €20,000.

The calculations are similar, where the position margin is 3.24% of the total trade value: (3.32%*(20,000*1.0685)) = $709.48.

If the price drops by 50 points, you will make $100. If the price goes up by 50 points, you will lose $100. Please bear in mind that in all these examples, you may potentially lose more than you deposit.

Types of trading strategies for forex and CFDs

There are several approaches to analysing and trading currency pairs and currency pair CFDs:

• Fundamental analysis considers the difference between the economies of two countries and how that may affect the relative strength of each currency. This includes interest rates, money supply and trade balances.
• Technical analysis considers the price action of the pair. Price patterns, indicators and support and resistance levels are used to identify potential entry points.
• Traders also use news, market sentiment and algorithms.
• Scalping strategies make predictions for short-term price movements that may last seconds or minutes.
• Day traders use technical analysis to identify trades to hold for minutes to hours. They close all positions at the end of the day.
• Swing traders hold positions for a few days in the hope of larger price swings.
• Position traders and trend followers hold positions for as long as a few years. They follow major trends or trade price patterns.

Scalping

Scalping targets very small price movements over seconds or minutes, requiring a high volume of trades to accumulate meaningful returns. It demands tight spreads, high-frequency trade execution, and highly liquid pairs to be viable. Scalpers need near-constant screen presence and exceptional emotional discipline. Because of this, scalping is generally considered unsuitable for beginners — it is a strategy that advanced traders are using with well-tested systems and reliable infrastructure.

Day Trading

Day traders open and close all their positions within a single trading session, eliminating overnight risk. The strategy requires close monitoring of price movements throughout the session and relies heavily on technical analysis to identify entry and exit points. While it avoids overnight swap costs, day trading demands significant time commitment and emotional resilience — factors beginners should weigh carefully.

Swing Trading

Swing traders hold positions for a few days in the hope of capturing larger directional price moves. This style suits traders who cannot monitor screens all day but still want an active role in the market. Swing trading typically combines technical and fundamental analysis to identify turning points in price trends.

Trend Following

Trend following involves entering trades in the direction of an established market trend — a general directional price movement over time (uptrend, downtrend, or sideways). Traders use tools such as moving averages and trendlines to identify when a trend is forming and follow it for as long as it holds. Position traders who hold for weeks or months often use this approach. It is a lower-stress strategy for beginners who cannot monitor markets throughout the day, provided they have the patience to hold through short-term noise.

A practical information beginners: match your strategy to your available time, risk tolerance, and capital. Practise all approaches on a demo account before committing real capital.

How to Analyse Forex and CFD Markets

Technical analysis focuses on price action and chart patterns. Key tools include moving averages, the RSI (Relative Strength Index), support and resistance levels, and candlestick patterns. For example, if the EUR/USD price holds consistently above its 50-day moving average, traders may interpret this as a bullish signal. Technical analysis is the tactical layer: it helps identify when to enter and exit a trade.

Fundamental analysis (see our guide) examines economic data — interest rates, GDP, inflation, and trade balances — to assess the relative strength of two currencies. For example, if the US Federal Reserve raises interest rates while the ECB holds, demand for USD typically increases, pushing EUR/USD lower. It is the strategic layer: it helps you understand why a currency pair may trend in a particular direction over weeks or months.

Market sentiment reflects the aggregate attitude of market participants toward an asset. Practical tools include the COT (Commitments of Traders) report and general news flow monitoring. Sentiment is the qualitative layer: it helps traders gauge whether a price move is driven by broad consensus or may be close to reversing.

Risk Management and Margin Calls: Protecting Your Capital

Risk management is the framework of rules and tools you use to limit losses and protect your trading capital over the long term. Consistent risk management — not strategy selection — is the primary factor that separates long-term survivors from those who blow their accounts.

Core risk management toolkit

• Stop-loss orders: A pre-set price level at which your position is automatically closed, capping your loss on that trade. For example, if you buy EUR/USD at 1.1019 and set a stop-loss at 1.0969, your maximum loss on that trade is 50 pips — regardless of how far the price falls. Always set a stop-loss before entering a position.
• Position sizing: Never risk more than 1–2% of your total account capital on a single trade. This ensures that even a string of losing trades will not critically damage your account.
• Leverage discipline: Use the minimum leverage needed for your strategy. Higher leverage amplifies both profits and losses. Start with low leverage until you have a consistent track record.

Margin calls: what they are and how to avoid them

A margin call occurs when your account equity falls below the required margin level for your open positions. At this point, your broker may automatically close one or more of your positions — potentially locking in a loss at the worst possible moment. Volatile markets can accelerate margin erosion very quickly, especially on leveraged positions. The practical way to avoid margin calls is to monitor your balance relative to open position margin requirements, use stop-loss orders consistently, and avoid overleveraging.

Hedging as a risk management tool

Hedging means opening a position designed to offset risk in an existing trade or portfolio. For example, if you hold a long EUR/USD position but expect short-term volatility around a central bank announcement, you could open a short EUR/USD CFD to reduce your net exposure during that period. CFDs are particularly well-suited to hedging because they allow short positions without requiring ownership of the underlying asset.

Risk management principles apply equally to direct forex trading and CFD trading — regardless of which strategy or instruments you use.

Key terminology

Before we go on, let's focus on terms and concepts that you will need in both forex and forex CFD trading.

Lot sizes and how to calculate position size

One of the more confusing aspects of forex and forex CFD trading is calculating the size of a position. The size of a position, which is the size of its exposure to the market, depends on the traded price, the lot size, and the number of lots.

So, what is a lot? A lot is the standardised trade size for currencies. One lot is 100,000 units of the base currency. So, if you buy 1 lot of EUR/USD at 1.1019, you're buying 100,000 EUR, and you'll pay 110,190 USD.

You can also trade smaller lots:

• Mini lots are 10,000 units of the base currency
• Micro lots are 1,000 units of the base currency
• Nano lots are 100 units of the base currency

What does spread mean?

You have surely heard the word "spread" used endlessly in relation to the financial markets, but do you know its exact meaning?

Well, in most financial markets, you have three prices: the market price, the buy price and the sell price.

The word spread is used to refer to the difference between the supply (or sell) and demand (or buy) prices and is used for all assets and their derivatives.

The spread is the difference between the sell price and the buy price.

Say the EUR/USD sell price is 1.300. If you want to buy €1, you should pay $1.30. Therefore, it would be advisable to make the purchase if you believe that the EUR will rise against the USD. In other words, you should buy only if you think you can sell your €1 for an amount greater than the $1.30 you paid for it.

If you wish to sell, the chart will show you the price at which you can sell the first currency for the second.

If the EUR/USD sell price stands at 1.300, you could sell €1 at that price. However, it is only advisable to sell if you think that the price of the EUR will fall against the US dollar. Because then you could buy the same euro for less than the $1.30 you paid when you opened the position.

Total cost of trading: spreads, commissions, swaps and other fees

The spread is not the only cost you will encounter when trading forex or CFDs. Before entering any position, you should understand the full cost of inventory:

• Swap (overnight fee): When you hold a CFD or forex position past the daily rollover (typically 17:00 New York time), your broker applies a swap, i.e., an overnight fee based on the interest rate differential between the two currencies in the pair. Swaps can be either positive or negative: if you are long a high-interest-rate currency versus a low-interest-rate one, you may earn a swap credit. If the opposite is true, you will pay a charge.
• Commission: Some brokers offer commission-based accounts as an alternative to spread-only pricing. These typically feature tighter spreads but charge a flat or per-lot fee per trade.
• Other fees: Depending on your broker, you may also encounter inactivity fees or withdrawal fees. Always read the fee schedule before opening an account.

Always calculate the total expected cost per trade — including spread, swap, and any commission — before opening a position.

What is a pip?

A pip — short for point in percentage — is a very small measure of change in a currency pair. It can be expressed either in terms of the quoted price or in terms of the underlying currency. A pip is a standardised unit and is the smallest amount by which a currency's quoted price can change.

If you see that the price of the EUR/USD pair has increased from 1.3600 to 1.3650, you can describe this as a rise of 50 pips. Therefore, if you bought at 1.36 and then you sell at 1.3650, your profit would be 50 pips. Of course, this is just meant to serve as an example.

The actual profit or loss you receive will depend on the amount of currency you have purchased. For instance, if you buy micro lots (1,000 units) and trade with an account denominated in US dollars, the pip value will be $0.1. Thus, if your profit/loss was 50 pips, this means you made/lost $5. In the event you bought mini lots (one unit of 10,000), the pip value will increase/drop to $1, making your profit/loss $50. Similarly, when you purchase a standard lot (100,000 units), the pip value rises/plummets to $10, which translates to a profit/loss of $500.

The same pip value will apply to all pairs where the US dollar appears in the second position. If it is listed as the first currency, though, the pip value will be different. To calculate this new pip value, you must divide the normal pip value by the current exchange rate. For example, if your currency pair is USD/CHF, you must divide $0.10 (micro lot value) by 0.9435 (the current exchange rate for CHF) to get $0.1060 (new pip value). If JPY is part of your pair, as in USD/JPY, you must follow the same steps and then multiply your result by 100 at the end.

 

What is leverage?

Leverage essentially means using something small to control something bigger. In the specific case of currency trading, it means having a small amount of capital in your account that you use to control a larger amount elsewhere in the market.

For instance, if you are offered leverage of 1:100, it means that you can trade with 100 times more money than the amount of your initial deposit. That means if you want to invest in 100,000 EUR/USD, you now only need €1,000. However, these kinds of trades come with much higher risk. Let's suppose you're using leverage of 1:100: your losses could then be multiplied by a factor of 100. So only go for it if you are completely sure. 

Pros and cons of using leverage

• +Increases potential profit

The first and probably the most important benefit of trading with leverage is that it offers the potential to earn more if the market moves in your favour.

• –Increases potential losses

In the same vein, the results of the trade will be increased if you lose, too. So, you might potentially lose much more than you initially deposit.

• +Increases capital efficiency

Look at it this way: if it takes two days to generate £100 with unleveraged positions, leverage will take a much shorter period of time to reach the same result. This means your capital can be reinvested more (only if you have winning trades).

• –Increases your account risk exposure

Leveraged positions aren't limited to the amount of your trade and the balance of your trading account. So, your broker can lock your trading balance until you cover the stipulated margin requirement.

Important: If your account equity falls below the required margin level, your broker may issue a margin call and close your positions automatically — potentially locking in a loss at the worst possible moment. See the Risk Management section above for how to avoid this.

• +Mitigates low volatility

Another key advantage of leverage, especially when it comes to currency trading, is that it has the effect of mitigating low volatility. And since volatile markets move in wider cycles than stable instruments, it can be beneficial for speculators.

• –Involves more fees

You will be subject to borrowing fees and the margin rate, which can eat away at your profits (assuming you get any, which is also not guaranteed).

Practical note on leverage: leverage limits for retail CFD clients typically vary by asset class — lower for volatile instruments, higher for major forex pairs. Even if your platform allows higher leverage, starting with the minimum necessary..

Bulls and bears: Long positions vs short positions

The terms "bull" and "bear" are used to identify the two types of traders we encounter in the exchange market.

Bulls are unsurprisingly found most commonly in bull markets. They are optimistic and expect the price to rise, which is why they open long positions. A long position in forex or forex CFD markets refers to buying a pair of currencies in the hopes that it will rise.

Bears, on the other hand, usually reside in bear markets, where traders are pessimistic and expect prices to fall, thus electing to open short positions. With respect to forex and forex CFDs, short positions are opened when the trader sells a pair of currencies or a contract for the pair, hoping for the value to fall.

How to learn to trade forex and CFDs

Any type of trading requires ongoing learning. Even if you already have some experience, there are always areas where you can improve your skills.

You can start out with a demo account (which you can do for free with Libertex), and as you practice more, new markets will become less challenging. Some of the most important lessons you'll learn will have to do with the way you react when you make money and when you lose money. So, it's a good idea to move to a live account after you experience the ups and downs in a demo account and face your first losses, albeit in a practice environment.

To improve your trading, you can read books on fundamental and technical analysis, strategies, and more. It's also worth learning about economics and monetary policies, as both affect the values of currencies. There are also lots of educational videos and articles on these topics available online.

Finally, you should keep a journal, set goals, and track your progress. The more systematic you are about the learning process, the more efficient it will be.

Main differences between forex and CFDs

Now, let's finally highlight the most notable differences between the instruments in question. Check out the table below.

Pros and cons of forex trading

• +High liquidity

Forex is the most liquid market in the world, with a trading volume in excess of $7.5+ trillion per day (BIS, 2025). This means you can open and close more positions than in other, less liquid markets.

• +Low volatility

There are fewer variables affecting the price difference between two currencies. High-liquidity pairs like EUR/USD have tighter spreads and more stable rates because large trades do not move the price significantly.

• +24-hour availability

Forex is open 24 hours a day, 5 days a week, so you don't have to time your trades as diligently as with stocks.

• +Hard to manipulate

The FX market is large enough that no single entity can control the market price for an extended period of time.

• -Market risks

All trading instruments are subject to numerous market risks. Political, economic, and geopolitical factors can contribute to increased volatility, which can make trading challenging and unprofitable.

• -Weekend gaps

Because currency markets trade 24 hours a day, forex traders do not have to worry about the overnight gaps that occur in other markets. However, forex markets are closed over weekends, which can result in price gaps. Forex traders should be cautious when holding positions over weekends.

• -Counterparty risks

Forex is not traded on centralised exchanges like equities and other instruments. This means there is less oversight placed on trading, and traders may not be protected if a broker becomes insolvent.

• -Regulatory risks

Forex brokers are regulated by several regulatory bodies, which depend on the country in which the broker is based. Traders should always ensure their broker is certified by a reputable regulator.

Pros and cons of CFD trading

• +Wide range of markets

CFDs offer the ability to work in different financial markets from one account. Many brokers dealing with these instruments offer CFDs based on currencies, shares from different markets around the world, as well as other types of financial instruments such as gold, silver, oil, stock indexes, sectors, commodities, government bonds, currencies, etc. This allows traders to diversify and hedge.

• +Access to assets unavailable in your region

CFDs allow for global exposure to various markets, even if trading them directly is not allowed in your region. Worldwide exposure and diversity are not loopholes but rather fortunate characteristics.

• +Extended trading hours

Many brokers offer their clients extended hours, which means they can work with certain instruments or markets, such as the FTSE and Dow, even after the underlying market has closed for the day.

• +Flexibility

Traders can work for as long as they like: CFDs do not have a fixed maturity date. There is also no set contract size, which means traders can work with volumes of any size.

• –Varying liquidity

CFD prices are a direct reflection of what is happening in the underlying market. So, if you choose an asset with low liquidity, the instrument will not change that.

• –Lack of ownership

Traders can own the contract but not the asset, which may mean missing out on the perks of ownership. It's less relevant for currencies but highly relevant for assets like stocks and indices.

• –Risk of overtrading

Because CFDs have lower barriers of entry (i.e., lower capital commitment) compared to some underlying assets, traders can slip into the tendency to overtrade. This can lead to reckless decisions and magnified losses.

Which trading instrument should you choose?

When it comes to forex vs CFD trading, there is no definitive answer as to which instrument is better. They have many differences on a technical level as well as many similarities. Before you're swayed either way, it's important to research and practice with both to gain as close to real-life trading experience as possible. You may understand how certain instruments work on paper, but have a completely different view of them once you actually see them in action.

Trading highly liquid markets and instruments is usually a good introduction to trading. So, if you're a beginner, you might have a better time trading FX pairs or CFDs on liquid instruments. But other than that, there are no clear guidelines to follow. You will have to try and find the type of instrument that suits your personality, level of skill, capital, risk tolerance, and goals the most.

It's not uncommon for traders to work with multiple instruments at once. So, you might not need to choose between forex and CFDs at all. You might find your way of using their strengths and minimising their weaknesses. But remember that you can't escape the risk of losses, no matter what instruments you go for.

How do I start trading forex or forex CFDs?

Regardless of where you fall on the CFD vs forex debate, make sure to follow these core principles:

• Traders with limited or no forex or forex CFDs experience should choose currency pairs with high trading volumes. Generally, these will typically include the currencies of the world's biggest economies, such as the United States, the European Union, the United Kingdom, Japan, and Switzerland.
• Follow all economic events that are likely to affect your assets/underlying assets. Currencies can be influenced by things like releases of macroeconomic data on major global economies and economic decisions made by their issuing Central Banks.
• Set yourself a trading schedule. The optimal hours for trading are when volumes are at their highest. These typically coincide with the opening and closing trade times on the biggest foreign currency exchanges, e.g., New York, London and Tokyo.
• Make use of technical analysis. This type of analysis involves using charts to study current price trends and anticipate future ones.
• If you are going to use leverage, do it properly. For instance, you need to set a stop-loss, which is a level of manageable loss for each trade. That way, you can avoid some of the losses by closing a position that did not go as expected.

The next step is to create your own free demo account. Once you have an account, you can practice by choosing currency pairs or CFDs on any assets you want and opening virtual trades. As you gradually learn new strategies, you will become more prepared to start trading with real money. However, when you enter the live trading stage, remember that even experienced traders have losses, and you should always apply appropriate risk and money management strategies.