Market Mechanics

Brokerage services

Forex broker facilitate trading

Most of individual traders are using brokerage services to facilitate their trading. Such broker accepts orders from his clients and execute them on market. It is of course not free service. Every broker extend natural bid/ask spread and/or add commission to every trade made by its clients. Currently we are observing heavy competition on brokerage services market so fees and charges are getting smaller and smaller which is good for us, because trading is getting cheaper. It is also good for beginners because to make one's offer more attractive some brokers are giving away bonuses like free trading signals, money bonuses added to accounts, free news services etc.

Rollovers

Interest paid on positions

Each position kept open longer than one trading day generate or deduct interest depending if you are short (selling) or long (buying). You shouldn't ignore these payments or credits as they can extend your profit or limit it. You will find more on this subject on other articles presented on forexscience.com .

Forex market order types

Automating trading

Each brokerage platform has set of orders that can be used to automate trading. Each position should have limits where we want to close it. It helps to defend our capital from too big losses. Here are some of commonly used on forex order types:

Entry order - if currency pair reach wanted price it will open position at this price.

Stop loss order - it is used to close position when it goes against us. This type of order realize loss that we are willing to take when positions turns to be a loser.

Trailing stop loss order - this is the same as stop loss order with important difference, this order is not stable price, it moves after price when it's going good way and stops when it goes against the position. From this reason trailing stop can realize both profits and losses.

OCO orders - OCO stands for one cancels other. These are pairs of orders used both for entry and close positions. Execution of one order automatically cancels other one. This type of orders are used for example when currency pair is in range and we are uncertain which way market will go on breakout. We put then OCO order to sell below range and to buy above it. Breakout will fill one of these orders and cancel the other one.

Limit order - this order is used for realizing profits. Usually it is stable price which when reached closes position.

Forex? What is it, anyway?

Forex? What is it, anyway?

The market

The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover. (click here to read full market background by Easy-Forex™).

Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.

How does one profit in Forex?

Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.

The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.

Moreover, you cannot lose more than your "margin"! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.

You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't have to physically possess certain currencies in order to perform "buy" or "sell" with them.

How do I start?

Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex™); start trading.

It can't be simpler or easier than that. Need help? We'll provide you with 1-on-1 training and service, as much as necessary (Easy-Forex™ offers real people service, live, in your own language).

How do I trade Forex?

You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).

Before you finally activate the deal, you can still "freeze" it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The "freeze" feature is a unique service by Easy-Forex™.

When your Forex deal is running (you hold an "open position"), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forex™ lets you determine a "take-profit" rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.