|1||How can I learn to trade forex?|
The bare bones of foreign currency exchange trading are simple. You make money off exchanging one country’s money for another. However, exploiting those fluctuations or price movements requires both strategy and savvy. Signing up for online tutorials or in-person conferences will help you lay a base layer of knowledge on the forex market, but traders agree that true expertise is built on the job. Jump into a demo or a real (small sum) account and start hitting buttons, pulling from vast online resources whenever you hit a snag or just a big, fat question mark.
|2||Is forex worth it?|
Experts say that forex is a zero-sum game. That means that someone always loses commensurate to someone else’s win — that’s how the game is played. When you add in costs and fees associated with running a forex account and making trades, you enter the negative-sum territory. That said, shrewd trading moves can pay out. Substantially. If you have the time and interest required to learn to identify patterns in price fluctuations and execute far-sighted trades, you will make wins on the forex market. That said, the most thoughtful strategy is also liable to bring about loss. Don’t trade more than you can afford to lose.
|3||Should I be concerned about forex scams?|
Forex trading scams are a concern for even the savviest investor. Foreign exchange fraud has been on a rise for the best couple of decades, leading the Commodities Futures Trading Commission and other agencies to deploy task forces analyzing and curtailing schemes. The ingenuity of fraudulent schemes, whether they’re based on phoney software or creating fake accounts, increases, but their telltale signs remain largely the same. Steer clear of forex brokerages promising sure wins, fast results, or secret formulas for success. The market has proved time and again that there are no shortcuts. Scammers bank on the human propensity to believe otherwise.
|4||How to become a Forex trader?|
To become a Forex trader, start with learning the basics of the Forex trading – the main definitions and concepts. Then work out the theoretical knowledge on demo accounts. Using these accounts you will learn the material, gain the trading experience and sharpen your trading strategy without risks. One more step towards becoming a Forex trader is writing a trading plan. The trading plan helps to avoid mistakes and minimize the risks arising in the trading process. The trading plan is based on a comprehensive market analysis using statistical data of the fundamental and technical analysis. Read more here.
|5||How to start Forex trading?|
To start Forex trading with Just Forex, you need to register the Back Office and open the trading account. After you can deposit your account and start trading on Forex. The trading process implies orders executing. An order is the unit of the commodity-market relations. There are 2 types of forex orders – market and pending. The market order is executed at the market price, the price that you see in the terminal. The pending order is executed when the price reaches the indicated level. You can read more about placing orders here.
|6||In order to become a successful trader I just need luck, isn’t it?|
Do not treat trading on Forex as if it is casino. There is nothing in common between casino and Forex. It is necessary to work hard, learn all the features and aspects of the Forex market. Forex Articles may help you to fulfil this. To become a successful trader, patience and hard work are in much bigger need than good luck. Everything depends on you.
|7||How much money is required to start Forex trading?|
Just Forex has no deposit requirements for the Cent and Mini accounts. You can start trading with $1. To open the Standard account, you need at least $100. A minimum deposit for the ECN Zero account is $500. You can see how much money do you need to trade on Forex? Click here.
|8||Who can become Just Forex client?|
Individuals, as well as legal entities, can become Just Forex clients.
|9||How to read the Forex charts?|
The ability to read and analyze charts is the main skill of Forex traders. You can learn how to read Forex charts in this article. You can find chart patterns and trade according to them or you can just read about them on our site since Just Forex analysts have already done it for you.
|10||How to set Stop Loss on Forex?|
Stop-Loss is an order that limits losses if the price goes in an unprofitable direction. It automatically closes the position when the price reaches a certain price level. To protect the deposit from negative market fluctuations and unexpected events, traders determine the amount they can afford to lose and set Stop Loss at a level they considered to be acceptable for possible losses. According to professional traders, the maximum risk level for each transaction should be 2-3% of the trading capital. How to set Stop Loss, read here.
|11||How to calculate profit in Forex trading?|
The method of calculating profit on Forex depends on the currency pair quote. If the base currency of the pair is USD, it is called the direct quote (e.g.USD/JPY, USD/CAD, USD/CHF). If USD is the counter currency, this is a currency pair with the indirect quote (e.g. EUR/USD, GBP/USD, AUD/USD).
If the currency pair does not include USD, you deal with the cross-rate (e.g. GBP/AUD, GPB/JPY).
• You can calculate profit for the direct currency pairs by the formula:
(closing price – open price) / closing price × contract volume × lot size
• Here is the formula for currencies with the indirect quotation:
(open price – closing price) × contract volume × lot size
• Here is a calculation for the cross-rate currency pairs:
(open price – closing price) × base currency rate × closing price × contract volume × lot size
You can read more about currency quotations in the article of Basics of Forex Market.
|12||What does leverage mean?|
Leverage is a tool which lets trade bigger sums, having only part of the sum at the disposal. For example, with 1:100 leverage you can conduct a trade of the USD 100 000 volume, having only USD 1 000 of own funds.
|13||What does the free margin mean?|
Free margin means funds on the trading account, which may be used to open new position.
|14||What are the risks?|
While trading on margin maximises the potential return on your investment capital, it similarly maximises your risk. The forex market can be volatile and the value of your positions can thus change rapidly, and your loss can be greater than your initial margin deposit.
|15||What is the Margin?|
The margin on any spread betting or CFD trading position is the deposit you put down in order to open the position. It represents a fraction of the full contract value of the position, intended to cover potential losses. You should note, however, that you may lose more than your initial deposit, for example, if the market ‘gaps’ through your stop level.
|16||What is a Forex Pair?|
The foreign exchange market is grouped into pairs of currencies, showing the exchange rate for trading one currency for another. Some popular forex pairs include GBP/USD, EUR/USD and USD/JPY.
|17||What risks are involved in spread betting?|
Though spread betting can offer investors with diverse trading styles the opportunity to benefit from their market research and chart analysis, you must remember that spread betting also involves risks. When trading on margin, losses can be enhanced just as much as gains. If, however, you implement proper money management techniques and limit margin to reasonable levels, most of these risks can be contained and longer-term gains can be generated using stable and consistent investment strategies.
|18||How CFD is different from spread betting trades?|
The most obvious difference between a spread bet and a CFD (Contract For Difference) is the way each is viewed in terms of tax liability. When trading CFDs, traders are held accountable for taxes after capital gains are realised. This liability might lead many to believe that spread betting is always the preferable method but this is not always the case. One benefit of CFD trading is that losses can actually be written-off on your tax liabilities. This is not the case for spread bets because these trades have no tax liability. Some traders, therefore, prefer CFDs because they offer a higher level of liability protection.
|19||How are forex prices calculated?|
Forex prices are sent via data feeds, which show the best available bid (purchase) and offer (sell) prices currently available from a network of large foreign exchange banks. These prices are quoted in each forex pair (the relative value of one currency against another). In some cases, the bid price will be derived from one bank and the offer price from another, it all depends on which bank is offering the best price for each value. The difference between the bid and offer price is referred to as the ‘spread’ and this includes the amount that is charged by your spread betting provider to complete the transaction.
|20||What are Profit Targets?|
A profit target is a level where a trader chooses to close a trade once a certain amount of profit has been accrued. Targets can be set to close at areas where trends would be considered overextended, and prices are likely to start reversing (which would erode some of the accumulated gains). Like stop-losses, profit targets can also be set in terms of point values or percentage movements.
|21||How to do scalping on Forex?|
Scalping is a trading strategy when a trader executes a big amount of orders during a short period of time. The trading position is held open for a few seconds or minutes. A trader executes hundreds of transactions per day and receives profit from minor fluctuations in prices.
|22||What is the price movement?|
Price improvement, also known as ‘positive slippage’, occurs in fast-moving markets when the price changes between the time you place your trade, or your order is triggered, and the time your trade or order is executed. In this case, we won’t reject your trade or order, we will simply execute it at a better price.
|23||What is fractional pip pricing?|
For greater accuracy when trading forex, and to reflect the interbank market, we quote many forex pairs to an extra digit (i.e. tenths of a pip). You will see this as a smaller digit to the right of the price in the trading ticket.
Your unit risk (i.e. stake per point for spread betting) is still based on the pip, but the extra digit allows you to sharpen your profit in fractions of a pip.
|24||Will a stop loss order reduce my margin requirement?|
As a stop-loss order places a (non-guaranteed) limit on your potential losses, attaching a stop to a new position can reduce your margin requirement.
When a stop is attached to a position your margin requirement will be 50% of the standard requirement, plus your risk per point multiplied by your stop distance (so long as this is less than the standard margin).
So in the above example, if you attach a stop 10 points from your opening level, your margin requirement will be 50% x £340 + (£10 x 10) = £270.
For more details about margin calculations please see our Market Info tables.
|25||What is dealing spread?|
The spread is the difference between the bid price (the price at which you can sell a market) and the asking price (the price at which you can buy a market). This difference is effectively your cost of trading a market. This will typically include both the spread of the underlying market and our own dealing spread, although in the case of forex CFDs on the MT4 platform we will quote just the underlying market spread and take our dealing charge in the form of a commission per trade.
|26||What are trade enteries?|
Trade entry is the price area where a position is initially established. You should remember that trade entries can be taken in different directions, either buying or selling. When, for example, you believe that an asset’s price has fallen too far and that a downtrend is ready to reverse, it is probably a good time to place a long (buy) trade entry. Alternatively, if you believe that an asset’s price has risen too much and become excessively expensive, short (sell) trade entries should be considered.
|27||What type of markets can I trade?|
Spread betting providers can provide traders with tens of thousands of different trading instruments, in a variety of different asset classes. These markets fall into the following categories:
Some of the spread betting terms you will encounter include: trade entries, stop-losses and profit targets.
|28||What is the difference between the trading platforms?|
Each trading platform offers different features that cater to various types of traders.
Whether you are a beginner or expert, you can find the right platform at Ava Trade.
Learn which trading platform best suits you here.
|29||What can I trade with Ava Trade?|
Ava Trade is dedicated to providing a variety of instruments across all major markets. Please click here for the list of available instruments and their information.
|30||Can I change the base currency of my account?|
An existing account cannot be updated with a new currency base once it’s already created. If you wish to use a different currency, simply open a new account with the base currency of your choice. In order to do so, you will need to login to your existing account on the Ava Trade website and then click on “Add an Account”. Please make sure that the “Currency” and “Chosen Platform” fields match your new base currency choice.