Forex |
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Some frequently asked questions about Forex.
1. When is the FOREX Market open for trading? The lack of a physical exchange allows the FOREX Market to conduct business on a 24 hour time frame. It begins each day in New Zealand and moves around the globe as the business day begins in each financial centre - first to Tokyo, Hong Kong, Singapore, Moscow, Frankfurt, Paris, London, Zurich and finally New York. Unlike any other financial market, investors can respond to currency fluctuations at the time they occur.
2. What are the most commonly traded currrencies in the FOREX Market?
The most often traded (or liquid) currencies are those of countries with stable governments, respected central banks and low inflation.
The trading volume of the foremost currencies (along with their symbols) is given in descending order:
· US Dollar (USD) · Euro Dollar (EUR) · Japanese Yen (JPY) · British Pound Sterling (GBP) · Swiss Franc (CHF) · Canadian Dollar (CAD) · Australian Dollar (AUD)
The 4 major currency pairs are EUR/USD, GBP/USD, USD/CHF and USD/JPY.
3. Do you need a lot of money to trade FOREX?
No, the minimum amount required is only USD250 for a mini account. 1 "pip" earns you 1 USD. However, It is advisable to open a standard account where the payout is about 10 times that of a mini account for 1 pip. A standard account can be opened with any of the FOREX brokerage houses for a minimum sum of only USD2000 - USD3000.
4. What is a "pip"?
A "pip" is the smallest increment in any currency pair. In EUR/USD, a movement from 0.8941 to 0.8942 is one pip, so a pip is 0.0001. In USD/JPY, a movement from 130.45 to 130.46 is also one pip, so a pip is 0.01. Here's an example: If the EUR/USD moves from 0.8632 to 0.8639, this represents a 7 pip move If the USD/JPY moves from 124.57 to 124.71, this represents a 14 pip move
5. I hear the FOREX Market gives a 1:100 leverage. What does that mean?
This means that you are able to purchase a contract without the need to provide the full value of the contract. Investors can thus execute trades up to $100,000 with an initial requirement of only $1,000. This type of leverage allows investors to maximise their profit potential. 6. What do the terms "short" and "long" mean?
A short position is one in which the investor sells a currency at one price and aims to buy it later at a lower price. In this case, the investor benefits from a declining market. A long position is one in which the investor buys a currency at one price and aims to sell it later at a higher price. In this scenario, the investor benefits from a rising market.
7. Can you show me an example of a FOREX contract?
Example: Buyer Gains
Example: Seller Gains
8. How can I get started?
Come for one of our free forex classes and learn how you can profit from the FOREX Market. Our platforms include:
1) FATS : A state-of-the-art platform which manages your account for you!
2) FAST Course: Learn the buzz surrounding the FOREX Market today and be attended personally by an Accredited Trainer over a 6 month Coaching Program! |