There is more than enough liquidity in the IQ forex market to execute large orders quickly, because trillions of dollars are changing hands every day. The spreads and commissions on forex trading are generally low, making it an attractive market for scalpers and intraday traders. Leverage is almost always available to retail forex traders, so they can manage large positions with only a fraction of their notional value. We will look closely at IQ Option’s top tier platform in order to trade these currency pairs.
Information on the Forex market
What is the purpose of currency pairs?
A currency pair, like EUR/USD (the euro against the U.S. dollar), represents the relative value of two currencies.
The currency pair (EUR/USD) has two currencies, the base and quote currencies (EUR/USD).
The euro is bought against the dollar when a trader purchases the EUR/USD currency pair. Long positions in the EUR/USD pair are known as long positions.
In this case, he purchases the dollar against the euro if he sells the EUR/USD currency pair. This is referred to as a EUR/USD short position.
In order to purchase currency pairs, you buy the base currency and sell the quote currency. An exchange rate pair is sold by disposing of the base currency and buying the quote currency at the same time.
Long (buying) positions in rising markets make money; short (selling) positions in falling markets make money.
The forex market is influenced by what?
In addition to politics, monetary policy, wars, a country’s economic situation, international trade, risk appetite, and speculation, there are many other factors that influence currency valuations. Here are some examples:
In countries whose economies are booming, their currencies tend to attract investors. A rise in inflation can lead to a rise in interest rates because of economic growth. When interest rates rise in a country, there will likely be more demand for its currency, since long-term investors will receive a higher return (interest) on the currency they hold. Foreign capital entering a country will boost the economy, increasing demand for the local currency.
Furthermore, risk sentiment plays a significant role in the valuation of currency pairs. In order to save money on borrowing costs (low-yielding), riskier investors tend to invest their borrowed funds in higher-yielding assets.
Investing in stocks or higher-yielding currencies with borrowed Japanese yen (with little or no yield) can help investors earn a higher return. As investors become risk-averse for whatever reason (unwilling to take risks anymore), it is possible that they would sell some of these risky assets and return to the Japanese yen (which is regarded as a safe haven). The subsequent flow of money into the Japanese yen from these riskier assets strengthens the yen. Investors investing in riskier assets may cause the yen to weaken at a later stage.
Platform for trading forex at IQ Option
There are web, desktop and mobile apps available for IQ Option’s multi-asset trading platform. Let’s take a look at the forex pairs offered by IQ Option and how to trade them with its trading platform.
What leverage is available?
Many individuals can participate in the forex market through leverage if trading conditions are normal (minimum trade size = 0.01 lots). For a $250 trading account, it would require more or less $1000 in capital to trade forex since the minimum lot size for forex transactions is 0.01 lots. Even if you don’t want to use the lowest leverage setting, you can make small trades with IQ Option.
IQ Option offers the following leverage options (investment multipliers):
- A ratio of up to 1:1000 between EU traders and non-EU traders.
- EU retail traders: 1:30. These firms can access lower leverage due to ESMA (European Securities and Markets Authority) restrictions.
There are 24 hours in a day on the forex market
Five days a week, forex trading is conducted around the clock. However, IQ Option does not provide 24-hour access to all currency pairs. For example, AUD/ZAR.
Deals must meet a minimum size
The minimum deal size for IQ Option’s forex pairs is $1. All clients are treated equally, regardless of their location.
Deposits are required as a minimum
You can open an IQ Option account for just $10!
With IQ Option, forex traders have access to a variety of convenient features. Positions (or pending orders) can easily be adjusted before or after they are placed and trade execution is quick.
By using IQ Option’s wide variety of forex pairs, clients can increase the effectiveness of their portfolio diversification.
The “Chat and Support” tab on IQ Option’s platform allows clients to chat with other traders as well as view video tutorials. You can also contact us 24 hours a day, seven days a week via live chat or by phone.