Tuesday, December 4th, 2007
Understanding Margin and Leverage : Forex Trading Basics Part-5
Understanding Margin and Leverage
Being able to trade on margin is one of the greatest advantages of forex trading. You can purchase large quantities of currency while only putting up a small fraction of the full value.
You may hear some people refer to “leverage trading” and other to “trading on margin”. In forex trading, they refer to the same thing, just in different terms.
Leverage is usually quoted as a ratio such as 100:1.
This simply means that you can trade 100 units of currency while only putting up 1 unit. In other words you would only need to put up $1,000 in order to trade $100,000. (more…)
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Tuesday, December 4th, 2007
Types of Orders : Forex Trading Basics Part-3
When your broker buys or sells a currency for you, it is called ‘executing an order’.
Depending on your trading system, your objectives, and your analysis of where you think prices are going to go there are different types of orders that you can place with a broker.
Here are the most common types of orders that any broker should be able to make for you:
Market Orders. A market order is the simplest type of order, and the most common order used in day trading. It is simply an order to buy or sell a currency at the current market price. A trader places a market order by specifying the currency pair he wishes to trade, as well as the number of lots to trade. (more…)
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