students of UNIPORT go all forex

Forex Market FAQs [Photo] [Photo] [Photo] What is Foreign Exchange? [Photo] Where is the central location of the FX Market? [Photo] Who are the participants in the FX Market? [Photo] When is the FX market open for trading? [Photo] What are the most commonly traded currencies in the FX markets? [Photo] Is Forex trading expensive? [Photo] What is Margin? [Photo] What does it mean have a 'long' or 'short' position? [Photo] What about terms like "bid/ask", "spread", and "rollover"? [Photo] What is the difference between an "intraday" and "overnight position"? [Photo] How are currency prices determined? [Photo] How do I manage risk? [Photo] What kind of trading strategy should I use? [Photo] How often are trades made? [Photo] [Photo]
What is Foreign Exchange?
The Foreign Exchange market, also referred to as the "Forex" market, is the largest financial market in the world, with a daily average turnover of approximately US$3.2 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example Euro/Dollar or Dollar/Yen. [Photo] Where is the central location of the FX Market?
FX Trading is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over the Counter (OTC) or 'Interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. [Photo]
Who are the participants in the FX Market?
The Forex market is called an 'Interbank' market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators. [Photo]
When is the FX market open for trading?
A true 24-hour market from Sunday 5:00 PM ET to Friday 5:00 PM ET, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night. [Photo]
What are the most commonly traded currencies in the FX markets?
The most often traded or 'liquid' currencies are those of countries with stable governments, respected central banks, and low inflation. Today, over 85% of all daily transactions involve trading of the major currencies, which include the US Dollar (USD) , Japanese Yen (JPY) , Euro (EUR) , British Pound (GBP), Swiss Franc (CHF) , Canadian Dollar (CAD) and the Australian Dollar (AUD). [Photo]
Is Forex trading expensive?
No. FOREX.com requires a minimum deposit of $250. FOREX.com allows customers to execute margin trades at up to 200:1 leverage. This means that investors can execute trades of $10,000 with an initial margin requirement of $50. However, it is important to remember that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally great. A more pragmatic margin trade for someone new to the FX markets would be 20:1 but ultimately depends on the investor's appetite for risk. [Photo]
What is Margin?
Margin is essentially collateral for a position. It allows traders to take on leveraged positions with a fraction of the equity necessary to fund the trade. In the equity markets, the usual margin allowed is 50% which means an investor has double the buying power. In the forex market leverage ranges from 1% to 2%, giving investors the high leverage needed to trade actively. Of course, trading on margin can increase your risk. [Photo]
What does it mean have a 'long' or 'short' position?
In trading parlance, a long position is one in which a trader buys a currency at one price and aims to sell it later at a higher price. In this scenario, the investor benefits from a rising market. A short position is one in which the trader sells a currency in anticipation that it will depreciate. In this scenario, the investor benefits from a declining market. However, it is important to remember that every FX position requires an investor to go long in one currency and short the other. [Photo]
What about terms like "bid/ask", "spread", and "rollover"?
FOREX.com has an extensive Glossary that provides detailed definitions of all Forex related terms. [Photo]
What is the difference between an "intraday" and "overnight position"?
Intraday positions are all positions opened anytime during the 24 hour period AFTER the close of FOREX.com's normal trading hours at 5:00 PM ET. Overnight positions are positions that are still on at the end of normal trading hours (5:00 PM ET), which are automatically rolled by FOREX.com at competitive rates (based on the currencies interest rate differentials) to the next day's price. [Photo]
How are currency prices determined?
Currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. This is known as Central Bank intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the Forex market makes it impossible for any one entity to "drive" the market for any length of time. [Photo]
How do I manage risk?
The most common risk management tools in FX trading are the limit order and the stop loss order. A limit order places restriction on the maximum price to be paid or the minimum price to be received. A stop loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against an investor's position. Contingent orders may not necessarily limit your risk for losses. [Photo]
What kind of trading strategy should I use?
Currency traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumor. The most dramatic price movements however, occur when unexpected events happen. The event can range from a Central Bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself. [Photo]
How often are trades made?
Market conditions dictate trading activity on any given day. As a reference, the average small to medium trader might trade as often as 10 times a day. Most importantly, by not charging commission, FOREX.com customers can take positions as often as necessary without worrying about excessive transaction costs. FOREX.com is compensated through the bid/ask spread. [Photo] Trading Handbook [Photo] [Photo] [Photo] Trading Hours [Photo] Order Execution [Photo] Currency Pairs [Photo] Margin [Photo] Dealing Spread [Photo] Rollovers [Photo] Trading Minimums [Photo] Daily Housekeeping [Photo] Fees [Photo] Confirmations [Photo] Price Quotes [Photo] Reporting [Photo] Trading over the Internet [Photo] Account Statements [Photo] Phone Trading [Photo] Funding Your Account [Photo] Order Types [Photo] Withdrawal Requests [Photo] [Photo] Trading Hours[Photo]FOREX.com's trading desk is open 24 hours daily from 5:00pm ET Sunday through 5:00pm ET Friday. [Photo] Currency Pairs[Photo]24-hour trading is available in 22 currency pairs: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY, AUD/JPY, CHF/JPY, EUR/AUD, GBP/CHF, NZD/USD, NZD/JPY, EUR/CAD, CAD/JPY, AUD/NZD, AUD/CAD, GBP/CAD, GBP/AUD. [Photo] Dealing Spread[Photo]At FOREX.com, you can trade on dealing spreads as low as 1-2 pips on the most widely traded currency pairs. And with our fractional pip pricing, you gain an extra digit of precision so that you can take advantage of smaller price movements.
For clients who trade news events, we also offer fixed spread pricing. With this option, bid/offer spreads remain fixed 100% of the time under all market conditions - which includes times of high market volatility, before and after major economic releases, and following other important news and events. Learn more. [Photo] Trading Minimums[Photo] [Photo] Mini Accounts:Minimum transaction size for mini accounts is 1/10th standard sized lot, or 10,000 of the base currency, with a minimum margin deposit of 0.5% (200:1 leverage). For example, a US$10,000 position would require an initial margin deposit of US$50. [Photo] Standard Accounts: Minimum transaction size for standard accounts is 1 lot, or 100,000 of the base currency, with a minimum margin deposit of 1% (100:1 leverage). For example, a US$100,000 position would require an initial margin deposit of US$1,000. [Photo] Fees[Photo]FOREX.com charges NO trading commissions or transaction fees. FOREX.com is compensated for its services through the bid/ask spread. [Photo] Price Quotes[Photo]FOREX.com clients have the ability to execute trades directly from real time streaming bid/ask quotes. Live prices are continuously published to clients via FOREX.com's trading platform, and traders can at any time click on the current bid or offer and instantaneously execute a trade. Prices are updated automatically as market conditions dictate. On average, FOREX.com traders make 100,000 prices per day. More importantly, FOREX.com publishes the same dealing price to the entire client base and allows any client to deal on the available price. [Photo] Trading over the Internet[Photo]Executing a deal with FOREX.com via the Internet is a simple two-step process. Simply enter the number of lots and then click on the bid (buy) or offer (sell) for the currency pair you wish to trade - your deal is automatically executed. The dealing software automatically calculates the initial margin requirement based upon the notional amount of the deal, and if sufficient funds are available in your account, will accept the transaction. Deals are confirmed online, normally within one second, and the system instantaneously updates both your open position and calculates your current P&L. [Photo] Phone Trading[Photo]Live clients may trade over the telephone 24 hours a day, from Sunday at 5:00pm ET through Friday at 5:00pm ET. When trading via phone, our dealers will quote the same tight spreads available via the dealing platform. All trades executed via the phone are subject to a pre-deal margin availability check and will be manually entered into the customer's account for integrated P&L analysis and reporting. All telephone calls are recorded for the safety of both parties. [Photo] [Photo] Phone Dealing Procedure Immediately state your ID and Password.State your interest. Always be sure to include the number of lots and the currency pair you are interested in.
Example: "I would like a price on 5 lots of Euro/Dollar." The Dealer will then provide a 2-way price quote.
Example: "Euro/Dollar is 1.2855/58" (the first number being the bid, the second the offer) State your trade.
Example: "At 1.2855, I sell 5 lots of Euro/Dollar"[Photo]or[Photo]"At 1.2858, I buy 5 lots of Euro/Dollar"If you do not wish to deal at the quoted levels, simply say "Nothing Done", hang up and call again later. Or, place a limit or stop order at your desired level.Remember: A price given is the dealing price at that time; haggling is not allowed nor are Traders allowed to remain on the phone until the price changes.It is important to remember that Dealing Desk phone lines are reserved for dealing/order purposes only, and that proper Phone Dealing Procedures be observed at all times. All other inquiries, such as account issues or general information, can be addressed through 1.908.731.0750 or 1.877.FOREXGO or via email: support@forex.com. [Photo] [Photo] [Photo] Order Types*[Photo]FOREX.com's dealing platform provides sophisticated order entry and tracking. Orders may be entered at any rate - inside or outside the existing spread - using the following order types: [Photo] Limit ordersAn order with restrictions on the maximum price to be paid or the minimum price to be received.
If a trader is long USD/CHF at 1.4627, a limit order would be entered to sell dollars above that price, for example, at 1.4800. [Photo] Stop Loss ordersOrder type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor's position.
If the trader above is long USD at 1.4627, a stop loss order could be left at 1.4549, in case the dollar depreciates below 1.4549.
As a rule, sell stops are filled on our bid, and buy stops are filled on our offer. This allows FOREX.com to fill client stop orders at the rate they requested in almost every case. In the rare instance that the market gaps over a requested rate, the stop is filled at the best available price. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a stop order is placed to sell USD/CHF at 1.4549, the trader will be filled when the bid reaches 1.4549 (i.e. the bid/offer is 1.4549/54). [Photo] One Cancels Other orders (OCO's)A contingent order providing that one part of the order is cancelled if the other part is executed. This is a particularly useful order type in that it allows traders to execute specific trading strategies based on technical analysis - without having to watch the market tick by tick.
As above, with the trader long USD/CHF at 1.4627, a typical OCO order would be a stop loss at 1.4562 and a limit (take profit) at 1.4700. If one part of the order is filled, the other is automatically cancelled. [Photo] If / Then SingleA conditional order providing that if the first order ("If" order) is executed, the second order ("Then" order) is activated as a live, single order.
In cases where the If order does not execute, the Then single order will remain dormant. When either part of an If / Then order is cancelled, all parts of the order are cancelled as well.
An example of an If / Then single order would be to first place an 'If' limit order to buy EUR/USD at 1.0690, fifty points below the current market rate of 1.0740. The 'Then' part of the order would be a limit sell order to take profit at 1.0770 (eighty pips above the 'If' order execution rate of 1.0690). If the market dips to 1.0690 the 'If' order will execute and the 'Then' leg of the order will become active. Note: the 'Then' order could also have been a stop loss order at 1.0650 (forty pips below the execution rate of 1.0690). [Photo] If /Then OCOA conditional order providing that if the first order ("If" order) is executed, the second order ("Then" order) is activated as a live, One Cancels Other (OCO) order. Full description of an OCO order. The execution of either one of the two 'Then' orders automatically cancels the other.
In cases where the 'If' single order does not execute, the 'Then' OCO order will remain dormant. When any part of an If / Then OCO order is cancelled, including either leg of the OCO order, all parts of the order are cancelled as well.
An example of an If / Then OCO order would be to first place an 'If' limit order to buy USD/JPY at 118.80, fifty points below the current market rate of 119.30. The 'Then' part of the order would be an OCO order: one leg of the OCO could be a limit sell order to take profit at 119.60, (eighty pips above the execution rate of 118.80) the other leg a stop loss order to sell at 118.50 (thirty points below the execution rate). If the market reaches 118.80, the 'If' single order is executed, and the 'Then' OCO order is activated. If activated, the execution of either leg of the 'Then' OCO order automatically cancels the other. For step by step instructions on how to place orders on the trading platform, see our User Guide. All of the above orders may be entered as Day Orders, entered today and good until end of NY business day (1700 ET). Or, clients may choose to may enter a Good 'til Cancelled Order (GTC), which is valid until the order is executed or cancelled. Orders remain open until they are triggered or cancelled. If you close out a position manually, you must cancel any order(s) relating to that position.
* Placing contingent orders may not necessarily limit your losses. [Photo] Order Execution*[Photo] [Photo] First In First Out (FIFO)Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened. [Photo] Stop Loss OrdersAs a rule, sell stops are filled on our bid and buy stops are filled on our offer. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a stop order is placed to sell USD/CHF at 1.4549, the trader will be filled when the bid reaches 1.4549. In the rare instance the market gaps over a requested rate, a stop order is filled at the best available price. [Photo] Limit OrdersSell limit orders are filled when the bid reaches the requested rate; limit orders to buy are filled on the offer. For example, a limit order to buy EUR/USD at 1.0456 will be filled when FOREX.com's offer hits 1.0456. [Photo] Good Til Cancelled (GTC) OrdersAll GTC orders remain open until they are triggered or cancelled. If you close out a position manually, you must cancel any order(s) relating to that position. [Photo] Orders left over the weekend or holidaysOrders left pending at close of trading on Friday at 5:00pm ET or placed over the weekend are subject to a gap open on Sunday evening when FOREX.com starts trading at 5:00pm ET. For both stop loss and limit orders - if your order is triggered due to news, events or other fundamental factors, it will not be executed over the weekend. Your order WILL be executed at the prevailing price when FOREX.com's trading desk opens Sunday. Because of the additional gap risk involved, you may want to reconsider leaving open orders over the weekend or holidays. * Placing contingent orders may not necessarily limit your losses. [Photo] MarginThe maximum available margin is .5% (200x leverage) for mini accounts and 1% (100x leverage) for standard accounts. Traders always have the option of employing a lower degree of leverage. The minimum margin requirement is approximately $50 per lot in a mini account and approximately $1000 per lot in a standard account. The requirements for leverage may vary with account size or market conditions, and may be changed from time to time at the sole discretion of FOREX.com. If maximum leverage is employed, traders must maintain the minimum margin requirement on their open positions at all times. It is the customer's responsibility to monitor his/her margin account balance. FOREX.com has the right to liquidate any or all open positions whenever a trader's minimum margin requirement is not maintained. This is an important risk management feature designed to strictly limit trading losses in your account. [Photo] [Photo] Margin Example USD Based Currency Pair
Margin = (Contract size / Leverage)
You have $500 in a mini account. To calculate the margin required to execute 8 mini lots of USD/JPY (80,000 USD) at 200x leverage, simply divide the deal size by the leverage amount e.g. (80,000 / 200 = 400). You post $400 margin for this trade, leaving a $100 balance in your account.
Non-USD Based Currency Pair
Margin = [(Contract Size x Price) / Leverage]
In this example, you have $5,000 in a standard account. You want to execute 3 lots of EUR/USD (300,000 Euros) at the current market price of 1.2710 using 100x leverage. To calculate the required margin for this position, multiply the deal size (300,000) by the price (1.2710) and then divide by the leverage (100x), e.g. [(300,000*1.2710)/100] = $3,813. After you executed this trade, you would have a $1,187 balance in your account. [Photo] [Photo] The trading platform automatically calculates margin requirements and checks available funds before allowing you to successfully enter a new position. If you do not have adequate funds available to enter a new position, you will receive an "insufficient margin funds" message when attempting to deal. If the unrealized P&L of your net total open position falls below your margin balance, your account is under margined and all your open positions may be liquidated. To avoid liquidation of your positions, do not use your entire account balance as margin for open positions. Instead, leave enough funds in your account to withstand a market movement against your open positions. We suggest you always use stop loss orders to limit your downside risk. Please contact FOREX.com client services should you wish at any time to use a lower degree of leverage or otherwise adjust the margin settings in your account. [Photo] Rollovers FOREX.com clients have the opportunity to earn interest on positions left open overnight - at all margin levels. The amount of interest that can be earned depends on the direction of the open position and the interest rate differential between the two currencies involved. For example, UK interest rates are significantly higher than Japan's, so if a trader is long GBP/JPY (i.e. holding British Pounds), they can earn interest on the roll. Conversely, if a trader is short GBP/JPY (i.e. holding yen) they will pay interest on the rollover.
FOREX.com automatically rolls forward all open positions to the next day's value date following the close of NY trading at 1700 ET. Rollover credits or debits are reflected in the unrealized P&L of the open position, and a rollover report (available in the "Reports" tab of the trading platform) provides additional detail of rollover activity. [Photo] Daily Housekeeping[Photo]Daily Housekeeping will occur each evening at 1700ET and will last approximately 5 minutes. During that time, back office staff will conduct daily rolls and important system maintenance tasks will be performed. Online trading MAY be unavailable, but we will accept phone orders. [Photo] Confirmations[Photo]Deals are confirmed on screen, typically within one second. Full transaction details may be accessed on screen as well, including date, time, rate, notional amount bought and sold, USD value, and reference number. [Photo] Reporting[Photo]The dealing software tracks all trading activity in real time, allowing clients to view current open positions, real-time profit and loss, margin availability, account balances, and all historical transaction details directly on-screen. In addition, by clicking on the 'reports' tab on the menu bar, clients may access five ad hoc reports: Account Value Summary - an online monthly account statement. View current account balance (realized P&L) for a selected month, as well as all deposits, withdrawals, interest earned, and fees charged (if any). Detailed Transaction Listing - lists complete trade detail for any selected date range, including deal date, currency pair dealt, trade direction (buy or sell), contract size for both currencies in the pair dealt, and executed deal rate. Open FX Positions - a summary view of all open positions, including contract size, USD value, average rate of open positions, reval rate (current market rate), and unrealized P&L. This report supplements real-time position information available in the position management screen of the trading platform. Order History - provides detail on all order activity for a selected data range, including order entry date and time stamp, listing of all cancelled and/or executed orders, along with its reference number. The Log Entry column provides a confirmation number and action detail for any order. Rollover History - provides rollover details for any transaction held open past 1700 EST, including rollover rate and USD value. May be generated for any given date range.Note: All reports can be printed and/or exported into Microsoft Excel via a simple cut and paste. [Photo] Account Statements[Photo]Customer account statements are provided online in the Reports section of the trading platform. Customers have access to a full suite of available reports, including account value summary, detailed transaction listing, open positions, etc. Reports may be generated for any date range, and printed or saved for future reference. For more information on the available reports, please see our user guide. Monthly account statements are mailed upon request only. To receive monthly account statements by mail, you must complete and return a Request to Receive Monthly Account Statements by Mail. [Photo] Funding Your Account[Photo]There are three easy ways to fund your account. Existing clients may fund their trading account immediately by logging into MyAccount. Wire Transfer - The fastest and easiest way to fund your accountFunds sent via wire are typically received by FOREX.com within 1-2 business days. All wire transfers should include the client's name and account number in the reference section of the wire. Please be sure that the beneficiary is listed as FOREX.com.Credit Card*Deposits via Visa and MasterCard are accepted. You must login to MyAccount to fund your account via credit and debit card.
Please click here to start the credit card deposit process.
*All card-based transactions are automatically converted to US Dollars; you may incur additional fees by your card issuer for currency conversion. Personal or Business CheckFunds sent via personal or business check generally take 5-10 business days (from date of receipt) to clear and be credited to client's trading account, This can vary depending on the bank and state of issue. International checks may take several weeks to clear.
Please make all checks payable to "FOREX.com" and mail to:FOREX.com, 550 Hills Drive Bedminster, NJ 07921. These limitations are part of our effort to comply with all anti-money laundering laws and regulations. [Photo] Withdrawal Requests[Photo]To withdraw funds from an existing account, please login to MyAccount. Withdrawal requests are processed within two (2) business days of receipt. There is no fee for withdrawal requests via check. Withdrawal requests via wire transfer will incur a $25 fee for wires within the United States, and $40 fee for international wires (including Canada). [Photo]