Forex

Exceptionally low spread pricing, combined with rapid inter-bank implementation. To be sure, we have expanded our product offering – however our focus remains on providing Forex traders around the globe with the lowest costs possible. IFX concentrates on a low latency/high quality execution accompanied by flexible leverage and a reliable trading infrastructure. With spreads executed as low as 0.2 pips on EUR/USD, AUD/USD, GBP/USD and various other pairs, your overall trading costs are far lower when you partner with IFX Brokers.

What is Forex?

Trading forex involves the buying of one currency and simultaneous selling of another. In forex, traders attempt to profit by buying and selling currencies by actively speculating on the direction currencies are likely to take in the future

Overview of the market

The foreign exchange market is a global decentralized market for the trading of currencies. This means that participants are able to trade currencies without meeting in person. It accounts for all aspects of buying and selling currencies at current or determined prices. In a typical foreign exchange transaction, a party purchases some quantity of one currency by paying with some quantity of another currency.

While the main participants in this market are the larger international banks, brokers enable individuals to participate in the market. The virtual nature of the market, and the diverse locations of its participants, allows it to operate around the clock, with the exception of weekends.

Currencies are always traded in pairs. As such, the foreign exchange market does not set a currency’s absolute value. Instead, it determines its relative value by setting the market price of one currency if paid for with another. This enables economic growth and development beyond national borders, through international trade and investments.

Currency pairs

Instrument Name
AUDCAD
AUDCHF
AUDJPY
AUDNZD
AUDUSD
CADCHF
CADJPY
CHFJPY
EURAUD
EURCAD
EURCHF
EURCZK
EURDKK
EURGBP
EURHKD
EURHUF
EURJPY
EURMXN
EURNOK
EURNZD
EURPLN
EURRON
EURRUB
EURSEK
EURSGD
EURTRY
EURUSD
EURZAR
GBPAUD
GBPCAD
GBPCHF
GBPCZK
GBPDKK
GBPHKD
GBPHUF
GBPJPY
GBPMXN
GBPNOK
GBPNZD
GBPPLN
GBPSEK
GBPSGD
GBPTRY
GBPUSD
GBPZAR
NOKSEK
NZDCAD
NZDCHF
NZDJPY
NZDSGD
NZDUSD
USDCAD
USDCHF
USDCNH
USDCZK
USDDKK
USDHKD
USDHUF
USDILS
USDJPY
USDMXN
USDNOK
USDPLN
USDRON
USDRUB
USDSEK
USDSGD
USDTRY
USDZAR
IFX MT4 Symbol
AUDCAD.lmax
AUDCHF.lmax
AUDJPY.lmax
AUDNZD.lmax
AUDUSD.lmax
CADCHF.lmax
CADJPY.lmax
CHFJPY.lmax
EURAUD.lmax
EURCAD.lmax
EURCHF.lmax
EURCZK.lmax
EURDKK.lmax
EURGBP.lmax
EURHKD.lmax
EURHUF.lmax
EURJPY.lmax
EURMXN.lmax
EURNOK.lmax
EURNZD.lmax
EURPLN.lmax
EURRON.lmax
EURRUB.lmax
EURSEK.lmax
EURSGD.lmax
EURTRY.lmax
EURUSD.lmax
EURZAR.lmax
GBPAUD.lmax
GBPCAD.lmax
GBPCHF.lmax
GBPCZK.lmax
GBPDKK.lmax
GBPHKD.lmax
GBPHUF.lmax
GBPJPY.lmax
GBPMXN.lmax
GBPNOK.lmax
GBPNZD.lmax
GBPPLN.lmax
GBPSEK.lmax
GBPSGD.lmax
GBPTRY.lmax
GBPUSD.lmax
GBPZAR.lmax
NOKSEK.lmax
NZDCAD.lmax
NZDCHF.lmax
NZDJPY.lmax
NZDSGD.lmax
NZDUSD.lmax
USDCAD.lmax
USDCHF.lmax
USDCNH.lmax
USDCZK.lmax
USDDKK.lmax
USDHKD.lmax
USDHUF.lmax
USDILS.lmax
USDJPY.lmax
USDMXN.lmax
USDNOK.lmax
USDPLN.lmax
USDRON.lmax
USDRUB.lmax
USDSEK.lmax
USDSGD.lmax
USDTRY.lmax
USDZAR.lmax
IFX MT5 Symbol
AUDCAD.lmax
AUDCHF.lmax
AUDJPY.lmax
AUDNZD.lmax
AUDUSD.lmax
CADCHF.lmax
CADJPY.lmax
CHFJPY.lmax
EURAUD.lmax
EURCAD.lmax
EURCHF.lmax
EURCZK.lmax
EURDKK.lmax
EURGBP.lmax
EURHKD.lmax
EURHUF.lmax
EURJPY.lmax
EURMXN.lmax
EURNOK.lmax
EURNZD.lmax
EURPLN.lmax
EURRON.lmax
EURRUB.lmax
EURSEK.lmax
EURSGD.lmax
EURTRY.lmax
EURUSD.lmax
EURZAR.lmax
GBPAUD.lmax
GBPCAD.lmax
GBPCHF.lmax
GBPCZK.lmax
GBPDKK.lmax
GBPHKD.lmax
GBPHUF.lmax
GBPJPY.lmax
GBPMXN.lmax
GBPNOK.lmax
GBPNZD.lmax
GBPPLN.lmax
GBPSEK.lmax
GBPSGD.lmax
GBPTRY.lmax
GBPUSD.lmax
GBPZAR.lmax
NOKSEK.lmax
NZDCAD.lmax
NZDCHF.lmax
NZDJPY.lmax
NZDSGD.lmax
NZDUSD.lmax
USDCAD.lmax
USDCHF.lmax
USDCNH.lmax
USDCZK.lmax
USDDKK.lmax
USDHKD.lmax
USDHUF.lmax
USDILS.lmax
USDJPY.lmax
USDMXN.lmax
USDNOK.lmax
USDPLN.lmax
USDRON.lmax
USDRUB.lmax
USDSEK.lmax
USDSGD.lmax
USDTRY.lmax
USDZAR.lmax
view more

How the market works/is affected

Changes in currency prices are driven by two main forces: supply and demand. When the value of a currency increases, the demand is greater than its supply. When a currency decreases value, its supply is greater than its demand.

What factors influence the supply and demand of one currency?

The two main factors that influence the movements in one exchange rate are:

1. The capital flows

2. The trade flows

These two components constitute what economics call balance of payments. The balance of payments serves to quantify the demand and supply for a currency of one country, over a period of time.

Balance of Payments = Capital Flows + Trade Flows

A negative balance of payments indicates that the capital leaving the country is greater than the capital entering the country.

A positive balance of payments means that the capital entering the economy is greater than the capital leaving the economy
Theoretically, a balance of payments equal to zero indicates the right value of one currency.

Capital Flows

Capital flows is the net quantity of currency traded (bought or sold) through capital investments. It can be divided into: physical flows and portfolio investments.

Physical Flows – They occur when foreign entities sell their local currency and buy foreign currency to make foreign direct investments (for joint ventures, acquisitions, etc.) Increased foreign direct investment is an indicator of good economic health in the economy where it is invested.

Portfolio investments – These are investments made on global markets, variable and fixed income market investments (Forex, stocks, T-bills, etc.)

Purchasing Power Parity (PPP)

This theory states that exchange rates are determined by the relative prices of a similar basket of goods in different countries. The ratio of prices of a basket with similar goods of two countries should be similar to the exchange rate.

The major weakness of this theory is that it assumes that there are no costs related to the trade of goods (tariffs, taxes, etc). Another weakness is that it does not consider other factors that might influence the exchange rate (i.e. interest rates etc)

Interest Rate Theory

This theory states that interest rates differentials neutralize the increase or decrease of any currency against another currency. Therefore, there are no opportunities to take advantage of differences in currency prices.

Trade Flows

Trade flows measure the net exports and imports of a given country.

Countries that export more than they import are more likely to depreciate their currency. On the other hand, countries that import more than they export, are more likely to appreciate their currency since they need to sell the local currency and buy foreign currency in order to purchase goods and services.