Trading on margin means that
you can buy and sell assets that represent more value than the capital in
your account. Forex trading is usually conducted with relatively small
margin deposits. This is useful since it permits investors to exploit
currency exchange rate fluctuations which tend to be very small. A margin
of 1.0% means you can trade up to USD 1,000,000 even though you only have
USD 10,000 in your account. A margin of 1% corresponds to a 100:1 leverage
(or “gearing”). (Because USD 10,000 is 1% of USD 1,000,000.) Using this
much leverage enables you to make profits very quickly, but there is also
a greater risk of incurring large losses and even being completely wiped
out. Therefore, it is inadvisable to maximise your leveraging as the risks
can be very high. For more information on the trading conditions of Saxo
Bank, go to the Account Summary on your SaxoTrader and open the section
entitled “Trading Conditions” found in the top right-hand corner of the
Account Summary.
Why Trade Forex?
24 hour trading
One of the major advantages of trading Forex is the opportunity to trade
24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00
GMT). This gives you a unique opportunity to react instantly to breaking
news that is affecting the markets.
Superior liquidity
The Forex market is so liquid that there are always buyers and sellers to
trade with. The liquidity of this market, especially that of the major
currencies, helps ensure price stability and narrow spreads. The liquidity
comes mainly from banks that provide liquidity to investors, companies,
institutions and other currency market players.
No commissions
The fact that Forex is often traded without commissions makes it very
attractive as an investment opportunity for investors who want to deal on
a frequent basis.
Trading the “majors” is also cheaper than trading other cross because of
the high level of liquidity. For more information on the trading
conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and
open the section entitled “Trading Conditions” found in the top right-hand
corner of the Account Summary.
100:1 Leverage
Leverage (gearing) enables you to hold a position worth up to 100 times
more than your margin deposit. For example, a USD 10,000 deposit can
command positions of up to USD 1,000,000 through leverage. You can
leverage the first USD 25,000 of your investment up to 100 times and
additional collateral up to 50 times.
Profit potential in falling markets
Since the market is constantly moving, there are always trading
opportunities, whether a currency is strengthening or weakening in
relation to another currency. When you trade currencies, they literally
work against each other. If the EURUSD declines, for example, it is
because the US dollar gets stronger against the euro and vice versa. So,
if you think the EURUSD will decline (that is, that the euro will weaken
versus the dollar), you would sell EUR now and then later you buy euro
back at a lower price. In case that the EURUSD indeed declines, then you
can take your profit. The opposite trading scenario would occur if the
EURUSD appreciates.
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Important Forex Trading Terms Spread The spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary. Pips
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.
On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.
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www.moonbd.com Betawww.moonbd.com site updating ..............Have you Any Problem ? Pls. contract us Email:moonbdad@gmail.com
Important Forex Trading Terms Spread The spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary. Pips
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.
On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.
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