What is a Margin Call?
Table of Contents Trading on margin allows you to borrow money via leverage to trade securities like stocks, commodities, forex and make larger investments. While trading on margin can potentially increase your returns, you also face more significant risks when investing with borrowed money. If your trading account’s capital is insufficient and not enough to […]
Candlesticks Charts
There are many ways that traders read and interpret their charts, some traders like to use trendlines and some others prefer to use candlesticks. In this topic, we will explore the in and outs of candlesticks. What is a candlestick? A candlestick chart is a popular visualization tool used by investors to analyze the price […]
What is overnight funding? How is it charged?
Table of Contents Financing charges such as overnight funding or sometimes also referred to as swap fees. It refers to the fees that you pay to hold the trade position overnight. This fee is essentially an interest payment to cover the cost of borrowed capital that you’re using. For the currency you buy, you may […]
Trading Account Status
Whenever you’re trading, you will encounter these terms and information about your trading performance. Net P&L: The profit and loss for all open positions. How to calculate: the total of P&L of all open trades + (daily Overnight Funding rate x number of days). Balance: The amount after last closed trade. How to calculate: Deposits […]
What is Margin?
Table of Contents We discussed in the earlier lessons about how Margin and Leverage goes hand-in-hand. In this chapter, we will understand more about margin, what is it, and the difference between initial margin and maintenance margin. So what exactly is initial margin? and how does it work? Margin is not a cost; however, Margin […]
What is Leverage?
Table of Contents We’ve discussed this previously. Leverage allow traders to use a smaller capital to trade larger amounts of money by utilizing margin. What exactly is Leverage and Margin? The textbook definition of Leverage; it refers to the the ability to control a large amount of money by the use of a significantly smaller […]
What is a Lot? Volume and Lot Sizing in Forex
Table of Contents Definition A “lot” is a unit for measuring trading amount. For example, 1 lot of London gold is 100 ounces, and 1 lot in FOREX trading represents 100,000 base currency instead of 100,000 dollars. If your base currency is the US dollar, 1 lot represents USD100,000; if your base currency is the […]
What is a Pip?
Table of Contents Definition of a Pip The unit of measurement to express the change in value between two currencies is called a “pip”, also referred to as price interest point. A pip is the smallest whole unit price move that an exchange rate can make, based on forex market convention. Most currency pairs are […]
What is Spread?
Table of Contents When traders trade through foreign exchange brokers, they will see two different prices displayed: buying price and selling price Buying price (ASK): The buying/ask price refers to the price that traders can BUY the base currency in exchange for the quote currency from the broker.Selling price (BID): The selling/bid price refers to […]