- You need to know at what price of purchase and sale for some
- What is the profit of the broker or dealing center
- You must be aware of exactly how you control the volume of each specific transaction
- You need to know whether you can get a loss greater than your deposit
The purchase price and the sale (Bid and Ask)
You will remember that before the money-changer to have profit always set the difference between the purchase and sale. This practice has been preserved to this day.
Therefore, in the forex market prices exist bid - price buy currency at the trader and the price ask - sale price currency trader.
The difference between the prices bid and ask is called the spread (spred). That spread is the main profit broker.
Margin trading
-Brokers are not charities, so when making a trader deals they take a pledge - to freeze the funds on deposit. This deposit is called margin.
Financial markets are arranged so that the trader in the transaction receives a management amount greater than is actually invested. That is, the trader receives a credit.
The relationship between collateral and the amount received by him is called leverage.
For example, at 1:100 leverage, buying 100 units of any currency you get in control of 10,000 units of the currency (100x100 = 10 000).
Some dealing cents provide the opportunity to trade with large leverage. Unfortunately, by agreeing to these terms, the beginning trader thinks only of large profits in positive transactions, forgetting that at low transaction losses grow in the same proportion. This usually leads to a rapid "plum" deposit.
Margin call
Dealing Center is closely monitoring trade trader. He has no desire to sue the trader if suddenly his losses
will be greater than the existing deposit.
Control mechanism current losses trader is very simple:
- When the loss of current transactions than the current deposit (margin) in the course are free money deposit
- If the balance on the account is a percentage of the mortgage, all transactions are automatically closed
- Further trade opportunities or small amounts (if sufficient funds in the account to support them), or only after the completion of the deposit.
Thus, the margin call - a requirement of the financial support of the current mortgage.
Read more:
- CURRENCY - Main goods MARKET FOREX
- What is a currency pair
if you are familiar with these concepts - boldly go to the first class technical analysis when rates fall, and when growing
