Forex Trading

Foreign exchange, or forex, is the world’s largest financial market;
it is a market with a huge average daily trading volume of $6.6 trillion.
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Trade Forex with Pentagon Markets

Pentagon Markets offer 24 hour CFD trading on FX pairs,
opening at 07:00AM UTC to 15:00PM UTC Monday to Saturday
Foreign exchange trading involves trading one currency pair against another, predicting that one currency will rise or fall against another. Currencies are traded in pairs, like the GBP British Pound versus the US Dollar (GBP/USD). Forex trading is similar to trading shares or futures except that when trading foreign exchange you are buying or selling one currency against another and you do not take delivery of the underlying currency.
One of the key advantages Forex has over other financial instruments is that relatively small lot sizes can be traded – lot sizes can be as small as 1000 units (one micro lot). Typically, foreign exchange also involves leverage which in some cases can be as high as 1:500, which is very different to trading shares where no leverage is involved. Leverage allows traders to trade with more money than they actually have in their trading account. For example, if you had 1:100 leverage you could use a $1,000 deposit to control $100,000 worth of currency. This can be seen as an advantage however it can also result in losses.

How does Forex Trading work?

The main factors that affect the Forex market:

The following are forex-related definitions that you should familiarise yourself with when trading online:


Generally the lowest increment in
which a currency pair is priced.


The difference between the Buy/Sell
(Bid/Ask) price for a currency pair.


Allows you to trade higher amounts with less capital. A leverage of 1:50 means you would need $200 to place a $10,000 trade.

Exchange Rate

The value of a base currency
against a quoted currency.


The price at which the trader is
willing to buy the currency pair.


The price at which the trader is
willing to sell the currency pair.

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