One of the most unpleasant experiences a trader can face is known as a margin call. To understand the dynamics behind this feature one must first appreciate what margin is in the forex market which unfortunately is a commonly misunderstood concept. The forex market is exciting and accessible to small retail traders because of the industry’s high leverage options. Leveraging a position involves putting down collateral known as margin, to take on a position that is larger in value. The margin in a forex account is often referred to...
With today's sophisticated financial market operating worldwide, world currencies have their own distinct sets of resources for measuring their worth over time. The general forex or foreign exchange market helps to promote the comparison of different world currencies against each other and against other assets, to help individual traders and investors take advantage of conditional values for those currencies. One resource is in the form of currency charts that provide a visual demonstration of the worth of a currency against other assets....
According to prominent, and successful, traders one of the primary tasks of every trader is risk management. Some even say that traders are basically risk managers with a bit of an interest in financial markets. Although that might be an exaggeration, it is undeniable that even traders with brilliant performance records might end up losing money without a proper a risk management strategy. Risk management is a combination of multiple ideas to control your trading risk. It can be limiting your trade lot size, hedging, trading only during...
Foreign currency exchange trading is a fast growing business industry worldwide. The currency exchange takes place on a very large scale and this market has a global presence as currency exchange market participants are from all around the globe. There are various participating entities taking part in forex trading. Unlike the stock market - where investors often only trade with institutional investors (such as mutual funds) or other individual investors - there are more parties that trade on the forex market for completely different...
In most financial markets there will be a broker involved to receive orders from retail and corporate customers. In the foreign exchange (FOREX) market, the broker acts as the intermediary between its customers and the inter-bank market where the currencies are actually traded. One of the means of getting the word out to retail and other customers is through individuals or entities acting as introducing brokers or IBs, for short. As the name implies, the role of the IB is to introduce the customer to a regular retail broker who...
