Forex or the “Foreign Exchange market", is the largest financial market in the world, with a daily average turnover of approximately US$5.5 trillion. Forex trading is the simultaneous buying of one currency and selling of another. The price of currencies is  floating and dependent on supply and demand. Foreign Exchange is always traded in pairs, for example EUR/USD.

Forex is said to be “the fairest market on earth" by some because of its sheer size, and number of participants. No one player, not even the central bank of a particular country can completely control the market direction of a currency.

There is no one central location of the Forex Market, unlike the stock and futures markets Forex is not traded on an exchange but it is traded on an Over-the-Counter (OTC) basis with no central exchange between Banks, Governments, hedge funds and private investors. The forex market is open 24 hours a day 5 day per week.

The main participants in the Forex Market are Central Banks, Commercial Banks and Investment Banks, however in recent years since the advent of the internet accessibility to the Forex Markets has increased which has resulted in an increase in the number of participants. These day’s participants also include large multinational corporations, money managers, registered dealers, money brokers and private investors.

The Forex Market is a 24 hour market, Forex trading commences in Wellington, New Zealand and moves around the globe as business days begin in each financial centre. The major global financial centers where most forex trading takes place are Tokyo, London and New York. The forex market opens on Sunday at 10:00pm (GMT) and closes on Friday at 10:00pm (GMT).

The most liquid currency pairs are those from countries with politically stable governments and well respected central banks. The most popular currency pairs those that are paired with the US Dollar these are nicknamed the ‘majors’ and account for around 85% of transactions. The most commonly traded pairs are the EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF and USD/CAD.

There are a variety of fundamental and technical aspects that can cause an exchange rate to move. The most notable influences include interest rates, inflation and political stability. Sometimes governments will buy or sell a currency in an effort to influence its value with the view of having a broader effect on the country’s economy. This is known as Central Bank intervention and can have a significant impact on the value of a currency. Given the size and diversity of participants there is not one single factor that can influence the forex market for any significant length of time.

There are a variety of risk management strategies that forex traders can use. The most common form of risk management is the use of stop loss and limit orders. Stop loss orders can be set within the MetaTrader 4 platform and are often used force the closure of a position at a predetermined price in order to limit any potential loss. Limit order work in much the same way as Stop loss orders however they allow a restriction to be placed on the maximum price paid.

Forex Traders use a variety of trading strategies based on technical and fundamental analysis. These days technical trading is becoming increasingly popular and traders are using a variety of technical indicators such as trend lines, support and resistance levels and numerous other methods to identify short to medium term trading opportunities. Some traders choose to use fundamental analysis which revolves around interpreting economic information including news, government reports and sometimes even rumor. Often it is however elements outside of technical and fundamental analysis that have the most dramatic effect on currency prices, this includes events such as Central Bank intervention, interest rate changes, political change or even war.

No, trading forex has never been cheaper and more accessible. Traders can now trade on institutional grade pricing with a deposit as little as $500 and leverage up to 400:1. It is however important to remember that although trading on leverage can maximise profits it can also amplify losses.

Capstone was founded by specialists in the FX industry and investment bankers to provide FX, derivatives trading and related services to institutional and retail clients.Capstone aims to create a pure trading environment by 100% DMA, lower trading costs and better order execution. For further information on Capstone please refer to the About Us page.

Yes, Capstone is a fully regulated broker. For more details please refer to our Regulation and licensing page.

Capstone holds client funds in Segregated Client Accounts with ANZ and HSBC. Both banks are AA credit ratings top tier-1 banks.

Capstone aggregates liquidity from 20+ top tier-1 banks and ECN venues to provide the best quotes and order execution from the interbank market for you to trade on.

Capstone allows clients to open a Standard account with as little as US$500 or currency equivalent.