Free practice account

MetaTrader 4

FOR BEGINNERS

 

The purpose of trading in Forex currency market is to make profits on periodical fluctuation in exchange rates.

 

Guarantees and security

Guarantees and safety of your funds and security of trading transactions, are one of the main criteria in choosing of the trading partner.

find out more

 

Frequently Asked Questions

How to profit? What is Forex? Where is Forex? Who are the participants of the Forex market? What is a leverage and who provides it? 

Home Page » Additional » Frequently Asked Questions

Frequently Asked Questions

  • How can I make a profit in the Forex market?
    We shall assume that you are a client of our company, and that you have an account with 1000 USD, which allows you to strike a bargain on a market lot of 100 000 USD. Having analyzed the change of the USD/JPY rate by means of a method of convergence - divergence of the sliding averages MACD (the fast line has crossed the slow from top to down) - you make a decision to buy 100 000 USD against the Japanese yen at the price of 121.00.Within a few hours of a day when the USD/JPY rate has grown on 200 points, and becomes 123.00, you decide to close a position; therefore, you will have sold your dollars at a higher rate than what you bought them at, and made a profit.
    The profit (loss) = [(the price of closing - the price of opening) lot's weight] /price of closing Profit = [(123.00-121.00) *100000]/123.00=1626.02 USD
    Notice that the fluctuation of the JPY on 200 points in a day is not an unusual occurrence.
  • Why I can't buy or sell on Sunday, some kind of a message "Trade is stopped" jumps out?
    The Forex Market works round the clock from Monday till Friday. Accordingly, on Saturdays and Sundays the tenders are closed.
  • What is the price of carrying the position to the next day, and when is it carried out?
    Carrying forward an open position in FOREX market to the next day is done in the form of market swaps which can be both negative, and positive, depending on the difference of interest rates in countries of the currencies.
    We shall assume that in Europe the SWAP rate is 4.25 %, and in USA 3.5 %. Let's say you have 1.0 lot of EUR/USD, and you are open for sale. You decide to sell 100,000 EUR, which means you should borrow the lot for under 4.25 % annually. Having sold euro you buy dollars, which you put at a deposit for under 3.5 % annually. The total costs on your transactions will be: (4.25-3.5) % annually or the same at rate EUR/USD 0.9000. This sum makes 675 dollars per year or 1.85 dollars per day.
    Carrying a position occurs at 00.00 (Server time).
  • How long is it possible to keep the position open?
    You can keep a position open as long as you want. Every day at 00.00 server time, the charge of a swap will be executed on your account.
  • What is Margin Call?
    A broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. This is sometimes called a "fed call" or "maintenance call".If the current funds of the trader's account becomes less than the necessary margin needed for maintenance of the trader's positions in the market, the dealer has the right to close all or some positions of the trader.
  • What is a leverageand who provides it? What is the principle of margin trading?
    Margin trading means that for the trader it is not obligatory to have the whole sum of the contract. It is enough to bring the mortgage (margin), which usually makes 1-2 % of the necessary sum. The missing amount will be given to you by bank through which you will make transactions in the Forex market. In slang of currency traders it is referred to as "granting of a leverage" So, to purchase a 100,000 dollars for Japanese yens at a leverage 1:100 it is necessary to bring only 1 000 dollars as a marginal deposit.
  • What do the position names "long" (LONG) and "short" (SHORT) mean?
    In slang of traders "to open a long position" means to buy the base currency and "to open a short position" means to sell the base currency.
    For example, the trader has bought Euro 100,000 for Dollars, i.e. has opened a long position on euro.
    BUY 100,000 EUR/USD - a long position on euro.
    SELL 100,000 EUR/USD - a short position on euro.
  • Who are the participants of the market?
    The main participants of the currency market are: the central and commercial banks, companies carrying out foreign trade operations, investment funds, brokerage companies, and individual investors.
  • Where is Forex?
    FOREX is a network of currency dealers connected among themselves by means of telecommunications.
  • What is Forex?
    FOREX (Foreign Exchange Market) is a global currency market that exchanges a certain sum of currency of one country to the currency of another country.
  • Does FOREX market function as the security market?
    No. The security market has geographic dislocated head office (as for example the London Stock Exchange – London (LSE – London), New York Stock Exchange (NYSE), etc.), which head office accepts the participants’ quotes, performs clearing of the deals and the trade is restricted within the trade session of the relevant stock exchange. FOREX market functions 24 hours a day, from Monday to Friday. Due to its high liquidity (daily volume of concluded deals of around 3 trillion USD), FOREX market guarantees the constant seek and demand of practically unlimited amount of currency at any single moment which on the other hand guarantees the immediate execution of the order submitted by the participant.
  • What Drives The Financial Markets
    Currency markets move based on countries’ economic data or different world events.
  • What is Trailing Stop?

    Trailing Stop

    Stop Loss is intended for reducing of losses where the symbol price moves in an unprofitable direction. If the position becomes profitable, Stop Loss can be manually shifted to a break-even level. To automate this process, Trailing Stop was created. This tool is especially useful when price changes strongly in the same direction or when it is impossible to watch the market continuously for some reason.

    Trailing Stop is always attached to an open position and works in client terminal, not at the server like Stop Loss, for example. To set the trailing stop, one has to execute the open position context menu command of the same name in the "Terminal" window. Then one has to select the desirable value of distance between the Stop Loss level and the current price in the list opened. Only one trailing stop can be set for each open position.

    After the above actions have been performed, at incoming of new quotes, the terminal checks whether the open position is profitable. As soon as profit in points becomes equal to or higher than the specified level, command to place the Stop Loss order will be given automatically. The order level is set at the specified distance from the current price. Further, if price changes in the more profitable direction, trailing stop will make the Stop Loss level follow the price automatically, but if profitability of the position falls, the order will not be modified anymore. Thus, the profit of the trade position is fixed automatically. After each automatic Stop Loss order modification, a record will be made in the terminal journal.

    Trailing stop can be disabled by setting "None" in managing menu. And trailing stops of all open positions and pending orders will be disabled if the "Delete All" command of the same menu has been executed.

    Attention: Trailing Stop works in the client terminal, not in the server (like Stop Loss or Take Profit). This is why it will not work, unlike the above orders, if the terminal is off. In this case, only the Stop Loss level will trigger that has been set by trailing stop.

Ask your question

* required

*:
:
*:
E-mail will not be displayed on the site, it is necessary, for site administrator that he could answer you.
*:

Please, enter the code displayed on picture *