What is Forex?
An abbreviation of Foreign Exchange, Forex is the world's largest financial market. It is open 24 hours a day, 5 days a week. Assets such as stocks, indices, commodities, and derivatives, including different types of currencies, are bought and sold.
The average daily trading volume of the Forex market is about $5 to $6 trillion, where institutional and individual investors, as well as governments, central banks and intermediary institutions are trading.
Due to its enormous size, the forex market is proof of manipulation.
What is CFD?
CFD is an abbreviation of: "Contract For Difference", which is an agreement on which profit is derived from the difference between the selling and buying prices of an asset that is not physically owned.
For example, if you make 2 Lot Gold transactions through Forex, you will not have any physical underpayments, but you will get profit or loss according to the difference between your buying and selling price.
What is an Index?
The index is the total value obtained by mathematical calculations of the variability of various companies and stocks listed on each stock exchange.
For example, the S&P 500 is an index that consists of 500 American companies, but it only has 1 value, not 500.
What is Commodity?
A commodity is a good that has not additional value to it, beside the value of the good itself. Gold, silver, sugar, coffee - are all commodities since they do not produce interest rate, swap, dividends or any other value beside their own value.
Another thing to remember about commodities is that they are traded future contracts, which means that you buy a CFD of a deliverable goods, that is abide by a contract that will be delivered in the end of the month, so be careful to trade commodities when the month is about to end.
What are the Trading Hours of Forex Markets?
Forex markets can be traded 24 hours a day on weekdays.
The First country to trade on Sunday night is New Zealand, and the last one is New York on Friday afternoon.
Transactions are particularly active between 10:00 am and 11:00 pm on the Tokyo and London markets, between 15:00 and 19:00 am with the opening of the London and US markets, and reach the highest transaction volumes.
Forex Market Center Country Opening time Closing time Australia Sydney 00:00 08:00 Tokyo Japan 02:00 11:00 Frankfurt Germany 09:00 18:00 London England 10:00 19:00 New York USA 15:00 00:00
The operating hours of the markets may vary due to official holidays, natural disasters or liquidity conditions.
How to Invest in Forex?
Forex trading can be done anywhere on your computer or mobile device. The only thing you need is Internet connection. TradeOro allows you to enter the system with your username and password that were given to you when you opened the account.
If you are unfamiliar with Forex trading, we recommend you to experiment on a demo account first. That is a mirror of your real account.
Is there an Age Limit for Forex Trading?
Each country has an age limitation for allowing individuals to trade on Forex. Usually, this is 18 years old.
Can I edit my trading positions when the market is closed ?
No, you can not. If the market is closed than you won’t be able to open, close or edit any of your positions.
What is Leverage?
Leverage allows you to utilize a greater purchasing power. You can trade up to 400 times your capital. For example, if you have $ 1,000 USD capital, it is possible to trade $ 100,000 USD using 1: 100 leverage.
What is Spread?
Spread represents the differences between the buying and selling price of an asset. For example, in the EURUSD, the buy is 1.0571 and the sell 1.0573, which means that the Spread is 2 Pips. For more detailed information, you can review our Swap and Spread Rates page at TRADEORO.
What is Pip?
An abbreviation for the Percentage In Point expression.
Pip is the fourth digit after the decimal, but on some assets the pip is not the fourth points, since on some assets there are not enough digits, as an example, let’s look on usdjpy price-113.35.
As you can see, the pip on usdjpy is the last digit.
What is Swap?
Swap is the interest rate difference between one currency to another when you trade. Consider how a forex trade functions: you borrow one currency to buy another.
For instance, if you are selling USD/TRY, you are buying TRY/USD (you can’t short in forex), which means that you are borrowing USD and buying Turkish lira. In doing so, you are paying interest on the US dollars you borrow, but earning interest on the Turkish lira you bought. Let’s take one example, that you may see how to use it to your advantage:
Selling 100,000 units (1 lot) of USD/TRY, and holding it for one week (168 hours) will generate you a positive swap of $140*
* Depends of market conditions.
What Does “Long” and “Short” Mean?
Buying an asset by anticipating that the value of the investor will increase is "Long" , and "short" if selling an asset by anticipating the value to decrease.