Forex & CFDs
Forex (foreign exchange) is the global market for trading currencies. A CFD (Contract for Difference) is a derivative product that lets traders speculate on price movements across assets — forex, indices, commodities, shares — without owning the underlying asset.
The foreign exchange market is the largest and most liquid financial market in the world, with a vast daily trading volume. It is a decentralised over-the-counter (OTC) market, meaning trades occur directly between participants (banks, institutions, retail brokers) rather than on a central exchange.
Currency pairs are grouped into majors (EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, NZD/USD), minors (crosses without USD), and exotics (one major currency paired with an emerging market currency). Major pairs typically have the tightest spreads and highest liquidity.
CFDs extend the same trading mechanics to other assets. A CFD on gold, for example, tracks the spot price of gold; traders profit or lose on the price difference between entry and exit without ever owning physical gold. CFDs are settled in cash.
Both forex and CFDs carry significant risk due to leverage. Regulators in most major jurisdictions require brokers to display what percentage of retail accounts lose money — a figure that, across the industry, is often above 70%.
TrustFinance's broker comparison covers spreads, leverage, regulation, and execution quality for both forex and CFD providers, helping traders identify trustworthy platforms.
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