EURUSD trading platforms let you speculate on the strength of the Euro versus the US Dollar through spot FX, CFDs, financial spread betting or futures & options.
CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This article contains affiliate links which may earn us some form of income if you go on to open an account.
Compare brokers for trading EURUSD
In our comparison of what we think are the best EURUSD trading platforms, you can see what commission a broker charges each time you trade, how much is costs to hold EURUSD position overnight, what the minimum deposit is and if you can trade EURUSD CFDs, spread bets, have direct market access via futures and options, plus if investing in EURUSD is possible.
|EURUSD Trading Platform||Costs & Spreads||Overnight Financing||Minimum Deposit||CFDs||Spread Betting||DMA||Investing||More Info||Risk Warning|
|0.5||2.5% +/- SOFR||£100||✔️||✔️||❌||❌||See Platform||69% of retail investor accounts lose money when trading CFDs with this provider|
|0.0008%||-3.188% / -1.188% (BM -/+ 1%)||£1||✔️||❌||✔️||✔️||See Platform||60% of retail investor accounts lose money when trading CFDs with this provider|
|0.7||Tom Next +0.98%||£1||✔️||✔️||❌||❌||See Platform||76% of retail investor accounts lose money when trading CFDs with this provider|
|0.17||(1/FX Rate) * (Trade Size*Tom Next )||£1||✔️||✔️||❌||❌||See Platform||74% of retail investor accounts lose money when trading CFDs with this provider|
|0.6||Tom Next +0.8%||£250||✔️||✔️||✔️||✔️||See Platform||73% of retail investor accounts lose money when trading CFDs with this provider|
|0.6||Tom/Next Swap +/-0.60%||£500||✔️||❌||✔️||✔️||See Platform||70% of retail investor accounts lose money when trading CFDs with this provider|
|0.6||Tom/Next +0.8%||£1||✔️||✔️||❌||❌||See Platform||69% of retail investor accounts lose money when trading CFDs with this provider|
|0.9||+6.4%/-2.9% SOFR||$10||✔️||❌||❌||✔️||See Platform||77% of retail investor accounts lose money when trading CFDs with this provider|
What is EURUSD Trading?
When you see EURUSD, EUR/USD or euro vs US dollar written in this way, it designates the currencies as a pair.
The currency listed first is the base currency, in this case, the euro, while the second listed currency is the quote currency.
The numeric rate shown is how much of the quote currency is needed to buy one of the base currency, in this case, 1 euro.
You could make a profit by correctly predicting how the currency rate between the two currencies changes over time.
The EUR/USD currency pair is one of the “major” currency pairs because of its popularity with traders globally. The reason for this popularity is largely because of economic reasons.
The currency of the USA, one of the World’s largest free-market economies, is the US Dollar (Greenback, USD).
For 19 Eurozone members, their currency is the Euro (EUR). The exchange rate between the US dollar and the Euro is EURUSD.
The Euro was created on December 31 1998, when thirteen countries decided to scrap their currencies and move into one currency. The newly created central bank of these countries using the Euro is the European Central Bank (ECB), which set the monetary policy for the Euro.
Given that the Eurozone is one of the most developed blocs in the world, the Euro is also one of the most traded currencies in the world with its daily transaction value estimated by the BIS at US$2.129 trillion (2019). So, it is a liquid currency.
So, with the powerful economies behind each of these currencies make buying and selling the pair an attractive proposition for traders.
How to start trading on EURUSD and find the best broker
To trade on the fluctuations of currency pairs, you will need to open an account with a broker to get access to the markets and get started.
The forex brokers in our EURUSD comparison table will all allow you to do so and most offer extra features like demo accounts so that you can trade for free with a practice account to test trading strategies and get used to using the service before you have to commit real money.
When speculating on EUR/USD you will need to remember the following 5 key factors which could affect the success of your trading;
- Check your leverage value, it will normally be represented as two numbers like; 1:50, 1:100 or 1:200
- Choose a broker that will allow you to trade forex with
- Select the currency pair you wish to trade, like EUR/USD.
- Make sure you add a stop loss or automatic close to your order, this will mean you automatically collect profit if you choose correctly or protect you from too great a loss if the markets move against you.
- Choose whether to buy or sell on your trade, this is important as “buy” indicates that you think the rate will move positively, whereas choosing sell suggests that you think the rate will decrease. Remember, the rate, in this case, is the amount of quote
Why do the EURUSD currency rates change?
The prices of these two, widely used and popular currencies change for many reasons including;
- Monetary policy of the government in charge of the economy behind the currency
- Inflation, countries with lower inflation tend to have higher currency values
- Interest rates, currency rates can be influenced by central banks changing interest rates. Higher interest rates can cause currency rates to rise.
- Public debt, high levels of public borrowing can mean currencies become less attractive
- Political and economic uncertainty or changes
Once you have a basic knowledge of the EURUSD, you then progress to understand the following:
- Investor expectations
- Market psychology
- Dealing with unexpected events.
Data flow by itself seldom moves markets significantly. It is the prior expectations that cause sharp moves. Pay attention to the market reaction (to any data) since it will tell you a lot about market expectations. Sometimes prices can drift in the direction of the initial reaction for days, creating opportunities.
On market psychology, you will have to read lots of positioning reports, sentiment data, and price trends – and draw your own conclusion. Does it make sense? The longer the price trend, the more extreme market psychology becomes. In markets generally, there is this concept called self-fulfilling loop, which reinforces the prevailing trend.
Lastly, you will have to guard against surprising events, such as verbal interventions by important policymakers. On July 26, 2012, for example, the ECB president stated that “the ECB is ready to do whatever it takes to preserve the euro.” It sent such a powerful message to the market that it literally set a floor on EURUSD and reversed its long-running decline. Prices trended up for the next six months.
The fluctuations in the prices of the currencies are what makes forex attractive to traders.
How to learn to trade EURUSD
Watching the exchange rate and learning its day-to-day behaviour is key. Remember, you do not trade markets. Rather, you trade your beliefs and understanding about the market.
Write down any pattern you think is relevant about the rate, patterns can include things like; head and shoulders, triangles, engulfing pattern and many more. Test these patterns against their past movements. Do they work?
Trade with a free or demo account for a few months first to help work out if this currency pair is suitable for your trading strategy.
Good Money Guide has some helpful resources for both beginners taking their first steps into trading and more experienced traders looking to trade EUR/USD and currency pairs.
- Here’s an article explaining where you can learn to trade if you are a complete beginner.
- A beginner’s guide to trend trading for those who are ready to open an account and get started trading.
- A 10-step guide to trading with technical analysis will help you to understand what technical points to look out for when you are trading.
- Finally, we’ve put together an article explaining why trading tutorial courses should be treated with scepticism