A currency pair is the quotation and pricing structure of the currencies traded in the forex market; the value of a currency is a rate and is determined by its comparison to another currency. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency. The currency pair indicates how much of the quote currency is needed to purchase one unit of the base currency.
The most commonly traded currencies are known as the US dollar (USD), the euro (EUR), the Japanese yen (JPY), the Great British pound (GBP), the Swiss franc (CHF), the Canadian dollar (CAD), the Australian dollar (AUD) and the New Zealand dollar (NZD). The major pairs all involve USD being paired with each of the other major currencies listed above.
CFD stands for “Contract for Difference”, meaning you are not buying the underlying asset, but rather purchasing a contract to settle the difference in the initial and ending price of the asset. When trading CFDs, you generally trade on margin, which means you only have to deposit a small percentage of the overall value of your position. This is known as Leverage.
CFDs are not suited to the long term investor. If you hold a CFD open over a long period of time the associated costs such as overnight fees increase, and it may be more beneficial to buy the underlying asset instead.
Order and Execution
-How are orders executed?
Orders are executed at the best available price at the time the order is received.
Different instruments price quotes are derived from prices provided to us by selected top tier liquidity providers in the wholesale foreign exchange markets.
-What is slippage?
Slippage is when an order is filled at a price other than the requested price.
Our quoted prices are executable the majority of the time. In fast-moving markets, orders may be executed at a price which has ceased to be the best market price.
-Why was the position closed?
Investors are responsible for monitoring the account and maintaining required margin at all times to support the open positions.
If at any point, the equity available drops below the required margin level, you will be subject to auto liquidation of the position incurring the largest loss. Liquidation of other open positions will continue until sufficient margin is maintained in the account.
-What is Lock Position?
Locked positions are positions of equal size on the same account on the same instrument but in opposite directions (buying and selling). For example, a trader opens a trade to sell EURUSD of one lot. After a while, the price starts to go against the expectations of the trader and the trader decides to open an opposite position, buying the same amount of the trading instrument. As a result, his losses on the first position are fixed.
Types of Order
-Buy Limit is a trade order to buy at a price equal to or lower than the order's "Ask" price. In this case, the current price level is higher than the value specified in the order. Usually, orders of this type are placed in anticipation that after the price of an instrument has fallen to a certain level, it will start to rise;
-Buy Stop — is a trade order to buy at a price equal to or higher than the order's "Ask" price. In this case, the current price level is lower than the value specified in the order. Usually, orders of this type are placed in anticipation that the price of an instrument will surpass a certain price and continue to rise;
-Sell Limit — is a trade order to sell at a price equal to or higher than the order's "Bid" price. In this case, the current price level is lower than the value specified in the order. Usually, orders of this type are placed in anticipation that the price of an instrument will start to drop after rising to a certain level;
-Sell Stop is a trade order to sell at a price equal to or lower than the order's "Bid" price. In this case, the current price level is higher than the value specified in the order. Usually, orders of this type are placed in anticipation that the price of an instrument will reach a certain price level and continue to drop.
Margin and Leverage
-What is margin?
Margin is equity from your account set to maintain a position when you’re trading on leverage.
-What is leverage?
Leverage is the ability to control a large position with a small amount of capital. It is usually denoted by a ratio. For example, if your account has a leverage of 50:1, that means you can trade a position of $5,000 with only $100.
-How leverage trading works?
Trading Forex, CFD, indices and commodities enable you to use leverage to open a trade. Leverage allows traders to control larger positions with a smaller amount of actual trading funds. In the case of 50:1 leverage, for example, $1 in a trading account can control a position worth $50. Even a relatively small change in exchange rate, instrument prices and market movement may lead to a significant impact on your trading value.
Margin is the amount in the trading account which is not currently being used to guarantee any positions; this amount can be used to guarantee the opening of further trades. Equity is the trading account balance plus or minus the profits or losses from any open positions you have
Margin level is calculated as a percentage and is the ratio of the equity to used margin.
Rollover is the process of extending the settlement date of an open position (i.e. date by which an executed trade must be settled). The forex market allows two business days for settling all spot trades, which implies the physical delivery of currencies.
In margin trading, however, there is no physical delivery, so all open positions must be closed daily at end-of-day and re-opened on the following trading day. This pushes out the settlement by one more trading day. This strategy is called rollover.
Rollover is agreed on through a swap contract which comes at a cost or gain for traders. We does not close and re-open positions but debits/credits trading accounts for positions held open overnight, for more information, you can check the trading specifications