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THEORY / FX BASICS
UNDERSTANDING FOREX

THEORY / FX BASICS

There are 8 major Currencies which make up the majority of market activity. These are the US Dollar, the Euro, the Pound, the Japanese Yen, the Swiss Franc, the Canadian Dollar, the Australian Dollar and the New Zealand Dollar. Being informed can increase your chances of successful trading.

AN IN DEPTH GUIDE

If you’ve never used the MT4 platform before, our in-depth guide will get you started. It will help you on your trading journey and give you the confidence to reach your financial goals.

THE BASICS

    TRADE CURRENCY
  • When you’re trading Forex, you buy one currency and sell another at the same time, which is why currencies are quoted in paris. EUR/USD, for example, represents the amount of US Dollars the EURO can buy. If you think the euro will increase in value against the dollar, you buy euros with dollars. If the exchange rate you sell the EUROs back and collect your profit.

  • STOP LOSS
  • A Stop Loss order minimises your losses by closing your position when the market falls by a certain amount. You can make or change your Stop Loss order whenever you want. Aggressive traders can see losses of 20% or more, so using a Stop Loss can be very useful.

  • TAKE PROFIT
  • This is a pending order that lets you close your trade when the market hits a certain point. You can setup your Take Porfit order for any position.

  • DEALING SPREAD
  • On the Forex market, the spread is the difference between the bid and asking price. Also known as a ‘bid-ask spread,’ it’s very often a clear sign of the market’s liquidity.

  • MARGIN CALL & MARGIN STOP
  • When you’re trading Forex, you buy one currency and sell another at the same time, which is why currencies are quoted in paris. EUR/USD, for example, represents the amount of US Dollars the EURO can buy. If you think the euro will increase in value against the dollar, you buy euros with dollars. If the exchange rate you sell the EUROs back and collect your profit.

  • TRADE CURRENCY
  • Margin: A required deposit that lets you purchase a currency pair or hold an open position. Margin call: A warning when your margin’s equity falls to 80% of the required amount. Margin stop: This closes your positions when your margin’s equity falls to 50% of the required amount, stopping your account going into negative balance.

GLOBAL TRADING AT YOUR FINGERTIPS

IX LABS updates you on how people are feeling about global events. Whether it’s an election or huge natural event, a disaster or celebration, the Globalisation Index will give you the greatest insight into the events that shape our world.