A popular broker, IQ Option, allows forex speculation on its platform via CFD. In this article, I will tell you how to trade on forex with IQ Option, what fees the broker charges (spreads and overnight fees) and what leverage you can use when trading on forex with IQ Option. So let’s get right into it.
IQ Option forex trading tutorial
In order to start trading forex on IQ Option, you first need to open an account (either real/or demo). Once you do that, log in to the IQ Option Platform, press the big plus symbol (Open new asset), choose “Forex” and select a forex pair you want to trade. Here, you can see what spreads IQ Option charges as well as what leverage you can use on your trade.
Once you decide what forex pair you want to trade, click on the name of the currency pair. After that, a big window on which you will see the price graph of the forex pair you chose will appear, here you will be able to make your trades. For instance, if you choose EUR/USD and you buy this position, you will be predicting that Euro will outperform the American dollar. If you choose to sell this position, you expect for the American dollar to perform better than the Euro.
As of today (14.04.2020), there are in total 49 forex pairs on which you can speculate, these include majors like EUR/USD, USD/JPY, minors like EUR/GBP, GBP/JPY as well as exotic pairs like EUR/ZAR, EUR/MXN…The forex market is open 24 hours a day, 5 days a week, from Monday at 0:00 GMT until Friday at 21:00.
IQ Option forex demo account
IQ Option features on its platform a free demo account with $10,000 play money that you can use to speculate on the forex market. To open a new IQ Option forex (CFD) demo account you can either visit directly their website or use the registration form below. The IQ Option demo account will allow you to trade on major, minor as well as exotic currency pairs. It is completely free of charge, no initial deposit required, you can create it with only an email account and password. The IQ Option forex practice account is refillable so in case you run out of our play money, you can refill with a simple click of a button.
(84% of retail CFD accounts lose money)
IQ Option Forex Trading – Fees
IQ Option charges in total 4 fees, spreads, swap fee (also known as the overnight fee), inactivity fee and bank withdrawal fee. Let’s talk about the first two IQ Option fees as you are going to encounter them the most often. IQ Option does not charge any commissions.
IQ Option Forex Spreads
IQ Option charges spreads on every forex position you open. Spread is the difference between the ask and bid price. For instance, if you trade the EUR/USD pair and the ask price is 1,1356 and the bid price is 1,1352, the spread fee is 4 pips. IQ Option has floating spreads which means they change according to the current market conditions. Generally talking, they are very competitive. To find out what spread they charge on a currency pair you want to trade, click on the big plus symbol, choose forex and scan for spreads they charge on your forex pair.
IQ Option forex swaps (Overnight fees)
In case you stay in your forex position when the market is already close, you will have to pay the overnight fee (swap). Because the swap fee changes every Monday and it is different for every forex pair, the best option is to go to https://eu.iqoption.com/en/trading-hours-and-fees and see what swap fee IQ Option charges on forex pairs you want to speculate on.
IQ Option forex – Leverage (Multiplier)
IQ Option offers different leverage to traders from the European Economic Area (+the UK) and to the rest of the world. (See an explanation of how leverage works). For instance, if you live in Germany, you can use on major currency pairs leverage of 1:30, but if you are from Mexico, Brazil or India, you can use up to 1:1000 leverage on majors. The reason why is leverage different for traders from the EEA is because the company is regulated there by the CySEC (in Cyprus) and has to follow and comply with the MiFID rules and restrictions that apply in the European Economic Area.
|Asset category||Maximum leverage (Traders from EEA + the UK)||Maximum leverage (Traders outside EEA)|
|Major currency pairs||1:30||1:1000|
|Minot currency pairs||1:20||1:300|
|Exotic currency pairs||1:20||1:300|
Forex price alerts, favourite currency pairs and more information
If you want to be alerted when your forex pair reaches a certain price threshold, create an alert. To do that, click again on the plus symbol > Forex and right next to your currency pair locate a bell sign, click it and set up your alert. This alert will notify you on the trading platform when the desired price is reached. Next to the bell icon, you can also find the star icon which functions for adding an asset to favourites and the information icon which will tell you everything there is about the forex pair (like the sentiment of the market, important news and economic event as well as the trading conditions that apply to that given currency pair).
Stop loss, take profit and purchase forex pair at a price
To manage your risks, you can set a stop loss as well as take profit on the IQ Option platform. To do that, open the forex pair you want to trade, head to the right side of the window and click on “Auto close”. Here, you can set up: profit/loss percentage, profit/loss in money or specific = asset price. If you want to buy your currency pair once it reaches a specific price, head to the “Purchase at” option located just below the sell button. Enter the asset price at which you want to buy your asset and save your options. After that, you can click to buy or sell your forex pair and a pending order will be created.
84% of retail CFD accounts lose money.