The term CFD stands for 'Contract For Difference', and it is a contract used to represent the movement in the prices of financial instruments. In terms of Forex, this means that rather than purchasing and selling large amounts of currency, you can profit on price movements without owning the asset itself. Along with Forex, CFDs are also available on shares, indices, bonds, commodities and cryptocurrencies. In every case, they allow you to trade on the price movements of these instruments without having to purchase them.
Scalping is a higher frequency form of trading, wherein traders focus on lower time frames, trying to profit from the market's volatility. Very often, traders make 15-30 scalps per day, whereas the profit is usually between 5-15 pips. The risk with scalping is usually 2-5% per trade, but bear in mind that if you cross 5% of your risk threshold, your account will be in a danger zone.
One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney—across almost every time zone. This means that when the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.
×