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4X offers forward contracts from one week to 12 months in the following currency pairs:
GBP against
      EUR (Euro)
      USD (US Dollar)
      AUD (Australia Dollar)
      CAD (Canada Dollar)
      NZD (New Zealand Dollar)
      CHF (Switzerland Franc)
      JPY (Japan Yen)
      DKK (Denmark Kroner)
      NOK (Norway Kroner)
      SEK (Sweden Kronor)
and
      EUR (Euro) against USD (US Dollar)

Click here for a 4X Dealer™ demo.

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Why Trade Forward?

Trading forward, or hedging, can be a useful way to reduce risk and manage your cash flow. They may be suitable for businesses which know they will have to pay out or receive a specific currency in the next few months, and want to hedge against any adverse movement in the rate.

Let?s say you will need US Dollars to pay a supplier in three months, but crucially you don?t actually have the cash available yet to pay for them.

The following example sets out how you might save 3% or more by hedging forward.

The current spot rate is 2.02 Dollars to the Pound.

The forward rate is 2.015 Dollars to the Pound.

You arrange a forward contract for the payment, so 300,000 Dollars costs you £148,883.38.

You pay a 10% deposit of £14,888.34.

Three months later the Dollar has strengthened and the spot rate is 1.95 to the Pound.

You pay the remaining £133,995.04 and receive 300,000 Dollars.

Had you waited and bought the full amount at spot when you needed it, the 300,000 Dollars would have cost you £153,846.16.

The total cost would have been over £4,900, or 3%, more.

Of course, forward trades can work the other way as well, and making what looks like a clever decision to lock into a relatively favourable rate can work against you if the Dollar weakens still further. However, in the business world the name of the game is managing risk and increasing certainty, and that is the advantage of a forward trade.

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Getting the Timing Right

Forward trades are particularly valuable if you are clever in the timing of your currency purchase.
Charts are a very useful source of information when looking to time your FX deals. Whilst these are essentially historical documents rather than predictions of future movements, they are valuable tools in deciding when to buy or sell your currency.
Charts show where the currency has traded in the past, and analysts use them to show what the average price has been in say the last few weeks or months, compared to what it is now.
There are a number of tools or 'indicators' available to make the decision process easier. All charts are courtesy of CMC Markets. A couple of the simplest and most popular are listed below, but there are many more to choose from.

Moving Averages.

These are useful in highlighting a trend because they display the average price of a currency at any given time. When the short moving average rises above the long moving average there is an upward trend, and when the short moving average falls below the long moving average there is a downward trend.

Relative Strength Index

This is an overbought / oversold indicator. It is always scaled between 0 and 100. Buy signals occur generally when crossing the 30 level, and sell signals when crossing the 70 level.

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