Opening LQDFX's Forex and CFD Trading Account
Open LQDFX’s Forex and CFD Trading Account
With LQDFX, you can invest in Forex, CFDs and Spread Betting online through their advanced multiple trading platforms.
Follow the steps below to start your online investment with one of the most popular and professional brokers.
- Go to LQDFX Official Website.
- Go to the account opening page by clicking on an “Open Account” button.
- Select your country of residence and desired trading platform to get started.
- Complete the online application.
- Save your username and password.
- Log in to the MyLQDFX client portal from LQDFX Official Website.
- Make a deposit and download LQDFX’s trading platform.
- Log in to LQDFX’s trading platform to start trading.
Forex Capital Markets (LQDFX) is recognized as the leader in online currency trading and Forex trading services.
Are you looking to invest online seriously with a professional broker?
Then go to LQDFX Official Website to start your online journey.
Among hundreds of financial instruments you can invest with LQDFX, Forex currency pairs and CFDs (Contract for Differences) are the most popular markets.
How much do you know about Forex and CFD markets?
In this article, we will explain everything you should know before start trading Forex and CFDs.
What is Forex trading?
FX can be started with a relatively small amount of money.
Compared to other financial products, FX has a lot of trading opportunities and a high degree of freedom, making it a familiar and popular entity.
For that reason, it may be difficult to hear what kind of transaction it is in the first place.
Therefore, here we will explain the basic knowledge of FX.
FX is an abbreviation for Foreign Exchange (forex), which means to exchange (buy or sell) different currencies.
One of them is to exchange local currency when you go overseas.
In the United States, the currency of the unit of USD is used, but if we look at the world, there are more than 100 kinds of foreign currencies (foreign currencies) such as Euro, British Pound, Australian Dollar, South African Rand.
FX is a transaction that buys and sells pairs of those currencies.
As frequently reported in the news, exchange rates (foreign exchange rates) such as “Japanese Yen to US Dollar” and “US Dollar to Euro” change daily.
It is FX that profits and losses occur due to fluctuations in the exchange rate of the currency pairs you trade.
Also, if the interest rates of the countries that issue the respective currencies are different, the profit of swap based on the difference and the payment will be generated.
1. FX can be traded for 24 hours a day
The foreign exchange market is one of the global financial markets, but the major feature is that it is traded anywhere in the world 24 hours a day.
In the financial market, the stock market also starts trading in Europe and New York, which are staggered even after your country has finished trading, but the same stock is not trading everywhere.
On the other hand, in the foreign exchange market, currency pairs such as EUR/USD and USD/JPY are traded all over the world.
Therefore, the exchange rate is constantly fluctuating, so FX can be traded even at midnight in any country’s time.
Moreover, although the foreign exchange market boasts the largest trading volume in the financial market, the average trading volume of one business day during April 2019 was indeed $6.959 trillion.
For comparison, the average trading value on the Tokyo Stock Exchange in one business day is 3.3 trillion yen (FY2018).
From these differences you can imagine how huge the forex market is.
It is generally believed that the higher the volume of trade, the more fair the price formation.
2. Leverage can bring big profits
FX has also a major feature of being able to carry out leveraged transactions.
Leverage in means that you can move a larger object (fund) with less force.
In LQDFX, there is a rule that you can trade up to 400 times the deposited money (margin).
In other words, if you want to manage 100,000 USD (although you should naturally manage the funds with a margin), you can trade by preparing a minimum of 250 USD in simple calculation.
FX can be traded with a larger amount than the deposited funds by a mechanism called “settlement of difference”, the payment of the difference between selling and buying is done without passing the actual product.
To reduce exposed risks while using high leverage of LQDFX, you can use LQDFX’s Mini account which has smaller lot volume.
How to make money in the Forex market?
There are two main ways to make a profit from FX.
The first is called foreign exchange gain, which is obtained when there is a difference in the exchange rate at the time of transaction start and at the time of settlement.
The other is called swap point, and if you meet the conditions, you can earn profits every day until you settle the transaction.
Each method is explained below.
1. Foreign exchange gain
For example, at the time of 1 USD = 1.05 EUR, make a transaction “Sell EUR and buy 10,000 USD”, and at the timing of 1 USD = 1.10 EUR, settle the order of “Sell 10,000 USD and buy EUR”.
In this case, “1.05 EUR x 10,000 USD worth = 10,500 EUR” was invested, whereas “1.10 EUR x 10,000 USD worth = 11,000 EUR” was the settlement, and a foreign exchange gain of 500 EUR is obtained.
This foreign exchange gain was obtained because the EUR/USD rate at the time of settlement was higher and weaker USD than when the transaction started.
Conversely, if the USD depreciates and the EUR rises, losses called “exchange losses” will occur.
Moreover, it is possible to flexibly deal with foreign exchange gains with FX.
In particular, since there is no deadline for trading, scalping that profits from fluctuations of several seconds to several minutes, day trading that complete trading within the day, swing trading of several days to weeks, and even longer-term position trading, you can trade freely according to the market trend and your own policy.
LQDFX as a NDD (Non Dealing Desk) broker, allows all of the above trading strategies on platforms.
2. Swap Point gains
Swap refers to the amount of interest rate difference between two countries that occurs daily.
The principle is that if you buy the currency of the country with the higher interest rate, you will receive the swap, and conversely, you will pay the swap if you sell the currency of the country with the higher interest rate.
For example, let’s say you traded MXN/JPY (buying Mexican pesos and selling Japanese yen) as of January 6, 2020, and you got 10 cents per 10,000 pesos in one day.
Swaps are reviewed daily, but if they were constant, buying 10,000 pesos and holding a position for 100 days would result in a stack of 1,000 cents (about 10 USD) of swap point.
On the contrary, if you traded MXN/JPY at the same time (buying Japanese yen and selling Mexican pesos), you would have to pay swaps because Mexico has higher interest rate levels than Japan.
Since interest rates in Japan are extremely low globally, you may want topay attention to the burden of swaps when trading currencies with higher interest rates than JPY.
While foreign currency deposits at banks do not get the initially set interest rate until the prescribed deposit period is reached, it is also attractive that swaps are accumulated on a prorated basis according to the number of days a position is held.
However, in the case of trading with emphasis on such swaps, it is naturally premised on the operation in the medium to long term span.
Swaps may change from “receive” to “pay” depending on the situation of interest rates in each country, or payment may be made for both buy and sell positions.
If you cannot receive swap points due to religious motive, LQDFX offers Islamic swap free account.
What is CFD (Contract for Difference)?
CFD is an abbreviation for Contract For Difference, which means “difference settlement transaction” or “margin trading”.
Such as Stock Index CFD (Stock Index Margin Trading) is a relatively new financial product listed on the financial exchange.
For instance, Nikkei 225 (Nikkei Stock Average) in Japan and NY Dow (Dow Jones Industrial Stock Average) in the United States can be traded as stock index of various countries.
Stock index CFD deals with a stock index consisting of stocks that represent the market, so you can expect the effect of diversified investment.
In addition, investment aiming at price movements linked to the index is called index investment and is said to be suitable for long-term investment.
In addition, the stock index CFD has flexible operating conditions such as “no trading deadline”, “almost 24 hours of trading”, “exchange of dividends and interest rates”, “utilization of leverage” etc.
CFD products will meet the needs of investors that could not be realized with Forex currencies.
Stock index CFD is as effective as diversified investment
One of the investment sayings is “Do not put eggs in one basket.”
This is the idea of stock diversification that it is better not to invest only in specific products but to invest in multiple products to diversify risk, and by investing in many stocks, the relationship between risk and return has the effect of stabilizing.
And trading a stock index has the same effect as diversifying investment in the stocks that make up the index.
For example, Nikkei 225 has the effect of diversifying investment in 225 stocks.
An investment method that aims for this effect and seeks price movements linked to a specific index is called index investment, and is said to be particularly suitable for long-term investment.
Although CFD trading is becoming popular among online investors, Forex trading remains the most popular choice of all time.
For traders who can’t decide which market to trade, you may refer to the page here.
LQDFX also provides its traders with free Economic Calendar on LQDFX Official Website, which you can use to follow the market trends of any countries.
1. You can invest in world stock indexes
In foreign investment such as foreign stocks, it is generally necessary to exchange the underlying currency with the local currency, so it is necessary to consider the risk of exchange rate fluctuations.
There will also be a currency exchange fee.
The stock index CFD allows each stock index overseas to trade in any currency, so you can easily understand the profit and loss amount of your position and concentrate on the movement of the index itself.
Therefore, there is a feature that even foreigners who are new to overseas investment can easily trade.
2. Trading opportunity even when the market is in decline
Equity investment can generally only start with “buying”.
In this case, it is difficult to make a profit when the market is falling while it is difficult to make a profit when the market is rising, but it is possible to aim for trading opportunities even when the market is falling with the stock price index CFD.
If you anticipate that the market price will fall, enter from “sell”, and if you can buy back cheaper than the amount sold, you will make a profit.
Conversely, if you buy back higher than the amount sold, you will lose.
In addition, if you own a physical stock, you can use it as a hedge when it falls.
3. Receive dividends and interest rates
If you have a buy position, and if there is a dividend in the stock index, the dividend equivalent amount based on the stock index will be awarded each time.
If you are in a sell position, you will pay the same amount.
Also, if you have a sell position, you will receive an amount equivalent to the interest rate, and if you have a buy position, you will have to pay an amount equivalent to the interest rate.
The interest rate equivalent amount is generated by carrying over the position on the next trading day, and is added to the valuation value of the position from the time of occurrence.
4. Leveraged trading with a small amount of money
With stock index CFD, you can manage a large amount of money that is many times the principal amount with a small amount of money.
This is called leverage, and it is possible to generate large profits by transactions that exceed the principal.
However, on the contrary, a large loss may occur, so be careful when using leverage.
If you trade millions of dollars with only tens of thousands of dollars, you can expect not only high returns but also high risk transactions.
5. Long-term holding with no settlement deadline
In the case of futures contracts that have a trading deadline, you need to settle the positions at certain time.
And when the transaction deadline is reached, even if there is a loss, it will be automatically settled.
Stock index CFD does not have a limit on the transaction deadline from holding a position to closing it.
The attractiveness of the CFD trading is that it is possible to make a careful investment without feeling the pressure to settle and to meet the needs of investors for long-term holding such as income gain (dividend income).
Are you new to Forex and CFD online trading?
LQDFX is a partnered broker with ZuluTrade. With ZuluTrade, you can copy traders of professional traders to your LQDFX’s live trading account instantly without any costs.
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