This trading FAQ for beginners gives the quick version of answers that are explained at length elsewhere on the site. Each answer points to the full guide if you want the reasoning and the worked numbers.
How this trading FAQ for beginners is organised
The questions below are the ones that matter before any money moves: what the products are, what they cost, who holds your funds and how fraud usually starts. If your question is about a specific firm, or about getting money back from a platform, we cannot investigate individual cases, but our scam guide explains who can help. For definitions of any unfamiliar term, see the glossary.
Answers are general and apply to retail clients unless stated otherwise. Rules differ between countries, and where a figure depends on a regulator, such as a leverage cap, we give the UK and EU position and say so. Check your own regulator's current rules before acting on any of them.
Reader questions
Is CyroxExchange an exchange or a broker?
No. Despite the name, CyroxExchange is an information website. We do not offer accounts, trading, deposits, withdrawals, wallets, apps, bonuses or signals, and nobody from this site will ever contact you about an investment. If someone uses our name to offer any of these things, they are impersonating us. Do not send them money or documents, and report them to your regulator or the police.
What is the difference between a broker and an exchange?
An exchange runs the marketplace where buy and sell orders are matched, such as a stock exchange. A broker is the firm that gives you access to markets, holds your account and places orders on your behalf. Forex has no central exchange, so retail traders deal through providers that quote their own prices. Many crypto companies act as both exchange and broker at once, and also hold customers' coins, which concentrates the risk in one company.
How does forex trading work in simple terms?
You buy one currency using another, expecting the exchange rate to move in your favour, then reverse the trade. Price moves are measured in pips, trades are sized in lots, and retail positions are usually leveraged, which magnifies gains and losses alike. Every trade pays a spread, and positions held overnight pay financing. Our forex guide walks through a full example with the numbers checked.
How much leverage can a beginner use?
That depends on where your provider is regulated. Retail clients in the UK, EU and Australia are capped at 30:1 on major currency pairs, 20:1 on other pairs, gold and major indices, 5:1 on individual shares and 2:1 on crypto CFDs in the UK and EU. You can always choose lower leverage. The more useful question is how much you are prepared to lose per trade, which the position size calculator turns into a lot size.
Do I own shares if I trade CFDs on them?
No. A CFD is a contract with the provider that pays out the change in the share price. You have no ownership, no voting rights and no dividends in the ordinary sense, only a cash adjustment. The provider is your counterparty, so your position depends on that firm. Buying real shares through a stockbroker gives you ownership, usually held in a nominee account for your benefit.
What is USDT and is it safe?
USDT is a stablecoin issued by the company Tether, designed to track one US dollar and backed by reserves the company holds. It is widely used for trading and transfers, but it is not a bank deposit and has no deposit insurance, and the issuer can freeze tokens. The most common practical loss comes from sending it on the wrong network: sender and receiver must both use the same one, such as TRC20 or ERC20.
What fees should I expect when trading?
Expect the spread on every trade, often a commission, and overnight financing on leveraged positions. Around those sit currency conversion charges, deposit and withdrawal fees, inactivity fees and, for crypto, network fees on transfers. Headline claims such as zero commission describe only one of these. Compare providers on the total you would pay for your own pattern of trading.
How do I check whether a broker is legitimate?
Search the financial regulator's own online register for the firm, then check that the website, email and phone number you have match the register entry, because clone firms copy real companies' details. Confirm which legal entity you would contract with, whether client money is segregated and what compensation applies. Test a small withdrawal before depositing more. Our ten-point broker checklist covers each step.
What is the biggest warning sign of a trading scam?
A promise of guaranteed or fixed returns, especially from someone you met online who offers to guide you. Close behind are pressure to deposit quickly, instructions to pay in crypto or to a personal account, and any demand for a tax or fee before you can withdraw. Once a withdrawal fee is demanded, further payments almost never release the money; stop paying and contact your bank.
Is a demo account worth using?
Yes, for learning the platform, the order types and your own position sizing without risking money. Set it up with a realistic balance and the leverage you would really use. A demo cannot reproduce the emotions of real losses, real slippage or every live cost, so treat demo profits as practice rather than proof that a method works.