How is the transfer of currency and what moves currencies?
One of the best advantages in Forex trading is
Amount of money you need to place an order (known as "margin") is all that can be lost!
You should know that despite a great power offered by some Forex brokers at high (400:1), which means that if you put up to $ 1000 and a broker will allow you to trade like you really $ 400,000) .
Forex trading is much less risky than stocks or futures trading, where you can lose more than you have deposited into your account.
This type of force does not exist in the stock market or futures
In stocks or futures markets, in many cases, dramatic and sudden movements occur, against which you can not protect you, even after putting your stops and protection.
Your position may be liquidated at a loss, and you will be responsible for any deficit in the account.
But because of the liquidity and depth of 24 hours on the FX market, continuous trading, dangerous trading gaps and limit moves are almost eliminated.
Orders are executed quickly, without delay or partial fills. Finally, there is no margin calls. For your protection, the broker will automatically close some or all open positions if your account equity unless the level required for positions.
I think this pause, a final automatic, and always work on your behalf to prevent a debit balance.
Currencies are traded in dollars called "lots"
In foreign exchange, with most Brokers, you can choose between two different sizes.
Standard or much, much simpler.
A standard lot is equal to $ 100,000 in currency. Margin requirements, using a 400:1 leverage, it will be U.S. $ 250, in other words, you control $ 100,000 worth of currency for only $ 250.
Average, and $ 250 deposit with a broker, I can redeem $ 100,000 of money?
No, you should be aware that the size of your account must be greater than the required margin of U.S. 250. For example, if you place an order to buy 1 standard lot (@ 100,000) transferred from the dollar / yen and U.S. Dollar Yen / Japanese, as 112.10/112.13, you buy USD / JPY at 112.13.
The balance will be $ 220, because you paid 3 pips or $ 30 for trade.
If you close the trade immediately, you have to sell it at 112.10 (purchase price), for a loss of $ 30.
It can indeed not to go too on this business, and the trading platform broker rejects your order, for the reason, there are enough funds in your account).
Therefore, the balance of your account must have a minimum of $ 280. $ 250 at the margin and $ 30 for trade.
But .... If, after that I started this trade to buy USD / JPY at 112.13, and the dollar / yen is at a distance of 2 1 point (around $ 8), you will automatically close your position, because deficit in the margin.
I'll explain later account of the existence of sufficient size for trading in the Forex market.
Currencies are always traded in pairs in the Forex. Pairs have a unique notation that expresses what's going on currency trading.
And the symbol of the currency pair to always be in the form ABC / DEF. ABC / DEF is not a real currency pair, is a sample code for the currency pair. In this example ABC is the symbol of a country's currency, the DEF is the symbol of the currency of other countries.
Some of the symbols most commonly used foreign currency are:
USD - U.S. Dollar
Euro - the currency in the European Union "Euro"
GBP - British pound or cable
JPY - The Japanese Yen
CHF - Swiss Franc
AUD - Australian Dollar
CAD - Canadian Dollar
There are symbols for other currencies as well, but these are the most commonly traded.
No money can be exchanged in itself. So you can not trade any time of the dollar itself. Still need to buy one currency and selling another currency to make trade possible.
Some of the pairs of most traded currencies are:
EUR / USD euro against the U.S. dollar
USD / JPY U.S. dollar against Japanese yen
GBP / USD British pound against U.S. dollar
USD / CAD U.S. Dollar against the Canadian dollar
AUD / USD Australian Dollar against the U.S. dollar
USD / CHF U.S. Dollar against the Swiss franc
Euro EUR / JPY against the Japanese yen
Is called the left of the currency / base currency.
The so-called law of currency / currency interview.
When you place an order to buy EUR / USD, for example, you are actually buying the euro and sell dollars.
If you were to sell this pair, you sell the euro and the dollar spent. Even if you buy or sell a currency pair, you buy / sell the base currency.
The best way to remember, by the mere thought of a currency pair that with a full one.
If you buy ... You buy the first currency and sell the second currency. If you sell it ... You sell the first currency and buy the second currency.
This means you can freely short sell-off so that they can make money when prices fall in the market, and when it rises.
The problem with traditional stock or commodity trading is that the market should go to make you money. With Forex trading, you can make money in all directions.
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