FOREX (Foreign Exchange Market)
is a global currency market that exchanges a certain sum of currency from one country to the currency of another at a changing rate, subject to the date of exchange.
Who are the participants of the market?
The main participants of the currency market are: the central and commercial banks, currency stock exchanges, the companies carrying out foreign trade operations, investment funds, broker companies and individuals.
Where is Forex?
FOREX is a virtual network of currency dealers connected among themselves by means of telecommunications. FOREX currency dealers are connected to leading world financial centers, and round the clock workers. As a result, FOREX forms a united and very efficient system.
Why is Forex so popular?
FOREX is popular, because it speaks for today's market. It is characterized by the greatest volume of tenders, the lowest cost of spent transactions, and the fastest movement of money resources. It is a unique world market operating 24 hours a day.
In what currency are calculations made?
All calculations are conducted in one of four currencies: US dollars; Euro; British pound; Japanese yen. All transactions for transfer of money resources on the trading account into other currencies will be converted to US dollars at an internal rate of the bank of the addressee on the day of transfer.
What advantage can Forex bring to the private investor?
A trader with small means can operate on the market with sums amounting to one hundred thousand dollars. For example, for a trader to make a transaction of 100 000 dollars at a mortgage rate of 1 % only 1000 dollars is needed as a marginal deposit.
What currencies are the most liquid?
The most liquid currencies are US dollar (USD), British pound (GBP), Euro (EUR), Swiss franc (CHF), Japanese yen (JPY) which make the main volume of all operation on the FOREX market.
How can I conclude my transactions?
To make a bargain the trader should request the quotation from the active participant of the market (market-maker), as follows:
- specify the tool (currency pair) on which the trader wishes to make the transaction;
- specify the sum of the contract;
- receive the bilateral quotation on the requested tool from the market maker;
- as a trader make the decision to buy, sell, or refuse the transaction.
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.
What is a credit shoulder and who gives 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 yen at a leverage 1:100 it is necessary to bring only 1 000 dollars as a marginal deposit.
The maximum level of leverage provided by our company is 1:500.
Is there any commission on the trade?
No, our company does not charge commissions on FOREX.
What kinds of leverages do you give?
Upon opening the account the standard leverage is automatically set at 1:500.
How long is it possible to keep the position open?
You can keep a position open as long as you want. Every day at 17:00 EST the charge of a swap will be executed on your account.
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.
Why does the client pay or receive funds for carrying a position?
This is because at the conclusion of the transaction he will have received the credit in the currency at which he/she has sold the position and should pay a percent of the sale. At the same time, he has placed his purchased currency in a deposit and should receive an interest. Interest rates on currencies differ; therefore there is a difference which is considered at the carrying of a position. If the client has sold the currency with a greater interest rate the profit will pay for the carrying of a position. If he has bought currency with a greater interest rate, the broker will pay for the carrying of his position. Usually roll-over is carried out automatically at the beginning of the day prior to the value date.
What are the conditions for setting "Stop-loss" or "Limit" orders?
Stop-loss and limit orders must be placed no nearer than 10 points from the market price;
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 are the working hours of your dealing center?
We work 24 hours per day from 19:00 Sunday till 15:00 P.M Friday EST (New York time)