Trading Guides

What causes currency prices to change?

Currency prices are fundamentally affected by supply and demand. Economic and Political factors may affect supply and demand as traders buy or sell currency pairs in reaction to news that was just released. Central bank intervention may affect the supply of a currency by releasing more money in the financial markets, or purchasing currency back, taking said currency out of the markets. A good example of this would be the GBP/USD plummeted after a referendum was passed for the UK to leave the European Union

However, sometimes currency prices change irrespective of Economic, Political and Central bank factors. During non-turbulent times, the currency pair may hit strong support / resistance levels in which buyers / sellers increase or decrease their exposure to the currency.

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What is the Spread?

The spread is the differences between two prices. In this case, it’s the difference between the buy (bid) and the sell (ask) price. In forex exchange, the spread is likely to be the commission charged by the broker/ or the liquidity provider for providing filing the buy/sell order.

The spread in forex is measured in “pips”, which is the smallest unit of the price movement of the currency pair. One pip is equal to 0.0001. Therefore, a 2 pip spread between the EUR/USD would be 1.1050 / 1.052

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What is a Commodity?

Commodities (Specifically, “Hard” Commodities) are generally regarded as a input in the production or use for other goods or services. Generally, a commodity has the similar/same characteristics, regardless of the location it is harvested in. In this example, West Texas Intermediate (WTI) is a type of crude oil primarily traded on the New York Mercantile Exchange (NYMEX), although any oil produced which have the right characteristics can be considered as WTI.

Hard Commodities are not to be confused with Soft Commodities which share similar characteristics in being relatively homogenous such as rice, wheat, and cattle. The difference between hard and soft commodities consist of how its produced, with hard commodities such as oil and gold being non-renewable and soft commodities, mainly agricultural products, must be grown and cared for.

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What is a Forex Pair?

A forex pair (or foreign currency pair) is the quotation of two currencies relative to each other, listed on a foreign exchange currency. It is essential to ascertain which currency is associated with each currency code/currency pair. In this case, USD/JPY dictates how many Japanese yen can be bought with 1 USD. However, not all the products we offer are quoted like this. For example, Brent Crude Oil and West Texas Intermediate are quoted as “BRENT” and “WTI” Respectively.
You may find there are nicknames for specific foreign currencies/currency pairs. For example, the currency pair “GBY/USD” is nicknamed “The Cable” from when the exchange rate between the U.S Dollar and the British pound began to be transmitted across the Atlantic ocean but a submarine communications cable.

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A Beginner’s Guide to Social Trading

A Beginner’s Guide to Social Trading

A Beginner’s Guide to Social Trading Social trading is a low investment way to trade, making it perfect for beginner traders. Social trading is a method of trading that has rapidly gained popularity following the advent of social media and online trading. What is...

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5 Tips For Forex Trading With A Full-Time Job

5 Tips For Forex Trading With A Full-Time Job

If your aim is to create a second income through forex trading, then you will know the difficulty of fitting trading in around a full-time job. We are all on the verge of a time management crisis. Luckily, with the right approach, the amount of time required to trade can fit easily into a busy schedule. In this article, we go through five tips to help get you started. But first, it is important to be clear on your motivation for trading.

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Black Bull Group Limited (trading name: BlackBull Markets) is a New Zealand registered and incorporated company (company number: 5463921).
We are also registered with the Financial Services Provider Register (number: FSP403326).

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Risk Warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.

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