1. What is the minimum trading amount for Forex?
The minimum trading amount for Forex is 1 unit of the base currency.
2. What is the cost of Forex trading?
The only cost will be the spread, and the rollover interests if positions are held overnight, please refer to here.
3. How many currency pairs do you have?
Currently we have around 60 currency pairs available for trading. The commonly traded currencies are US Dollar, European Euro, British Pound, Japanese Yen, Canadian Dollar, Australian Dollar and New Zealand Dollar.
4. What other “Non-major” currency pairs does ADSS provide?
We provide South African Rand, Turkish lira, Russian Ruble, Czech Koruna, Hungarian Forint, Mexican Peso, Norwegian Krone, Polish złoty, Swedish Krona, etc.
5. What is Direct Quotes?
A direct quote is a foreign exchange rate involving a quote in fixed units of foreign currency versus variable amounts of domestic currency. By domestic currency it refers to US Dollar. For example, if EUR/USD = 1.13. It means 1 Euro = 1.13 US Dollar.
6. What is Indirect Quotes?
An indirect quote refers to a foreign exchange rate quoting the amount of foreign currency needed to buy or sell one unit of the domestic currency. Note that an indirect quote is the reciprocal of a direct quote. To illustrate, 1 USD = 0.8850 EUR, which is equal to 1 divided by 1.13 (the direct quote).
7. What is Spread?
The spread is the gap between the bid and the ask prices of a security or asset. This is known as a bid-ask spread, which is influenced by a number of factors: Supply or "float", Demand or interest, Total trading activity.
In the above example, the offer/ask price (to buy) of EUR/USD is 1.13863 while the bid price (to sell) is 1.13855. Therefore, the spread is 1.13863 - 1.13855 = 0.00008 which also means 0.8 pips.
8. What is lot size?
A lot or a standard lot is equal to 100,000 units of base currency in a forex trade.
9. What is a Pip?
A pip (percentage in point) is a unit of change in an exchange rate of a currency pair. Currencies are usually quoted to four decimal places, and a pip is one unit of the fourth decimal place. For example, in US dollar, one pip equals to 1/100th of a cent.
10. What is leverage?
Leverage is the use of an initial deposit to open a position with borrowed funds. If you trade using leverage, you increase your buying power but also and concurrently increase the amount of capital at risk of loss should your trading activities result in a loss. You should also be aware of how much leverage you are trading on, and the margin (deposited funds) required to maintain your open positions.
11. What is the leverage ratio in OREX platform?
We offer a leverage of 20:1, which means you can trade with $1,000,000 with only $50,000 as a deposit. Obviously the pro is to allow you to multiply the effect of a small movement of a currency pair and take a higher return given the same amount of money. But by the same token it may also lead to an increased loss.
12. What is initial margin?
This is the minimum amount required to maintain all of your open positions and pending orders, which is 5% of total value of an open position. Any levels of net equity below 5% will result in failing to open new positions.
13. What is maintenance margin?
If your account equity falls below 3% of total value of an open position, you will receive a margin call at which you will no longer be able to place new trades. You will be informed with an alert via email. You can choose to add additional funds to your account, close existing positions to bring your account equity above the required margin level, or simply let your positions to keep on running so favorable market movements may bring your account equity to go above the margin level again. Should your equity continue to fall and touches the Liquidation Margin Level, your open positions will be automatically closed.
14. What is liquidation Margin?
If the account value touches this level, all open positions will be liquidated. Liquidation Margin is 1% of total value of all open positions.
15. What is Rollover rate?
Rollover rate is the interest rate difference between two currencies of a currency pair that is bought or sold. If an investor hold a trading position overnight through trading close (6:00 a.m. in Hong Kong /5:00 a.m. in New York for Summer Time, 7:00 a.m. in Hong Kong /6:00 a.m. in New York for Winter Time), he or she will receive or have to pay the difference in interest between the two currencies in the pair which is being traded. Rollover interest might look small, yet leveraging could make it significant.
16. Where to see the rollover interests?
17. What is Liquidity?
Liquidity means a currency pair's ability to be bought or sold without causing significant change in its exchange rate. In general, when the spread between the bid and offer/ask prices increases, the currency pair is said to be more illiquid.
18. What is Slippage?
Slippage means the difference between the price at which your order, often a limit order or a stop loss, is executed and the price offered at the time your order is submitted. Slippage may be favorable or unfavorable to you and is more likely to happen in a high volatility scenario. For instance, any news events resulting in an order became unfeasible to execute at the submitted price will cause a slippage. In most situation, dealers execute the trade at the next best price unless there is a limit order to cease the trade.
19. What is a market order?
Market orders are transactions meant to execute as quickly as possible at the present or market price. Whenever a market order is placed, there is always a chance of market fluctuations happening between the time the broker receives the order and the time the trade is actually executed.
20. What is a limit order?
A limit order is placed when you are only willing to enter a new position or to exit a current position at a specific price or better. The order will only be filled if the market trades at that price or better.
21. What is a stop order?
A stop order is an order that becomes a market order only once a specified price is reached. It can be used to enter a new position or to exit an existing one. A buy stop order is entered at a stop price above the current market price while a sell stop order is entered at a stop price below. Take the below case as an example:
An investor holds a long position of GBP/USD at 1.28686. However, the British pound is becoming weaker and going down. The investor then place a sell stop order with a stop price of 1.27686. Once the price of GBP/USD falls below the stop price, the stop order would become a market order. Note that the executed price may be worse or better than the stop price as the order had become a market order.
22. What is OCO?
OCO means “One-Cancels-the-Other Order”. This is a type of order in FX which contains both a stop order and a limit order. When either order executes, the other one is automatically canceled. Advanced traders use OCO orders to mitigate risk or/and enter a position. If an investor holds a long position of 10,000 units of XAU/USD which is trading at $1290.00, and expects the trading pair to trade in a higher volatility, the investor could place an OCO order which consists of a stop-loss order to sell at $1289.5 together with a simultaneous limit order to sell at $1290.50. The two orders could be either day orders or good-till-canceled (GTC) order.
Should the price of gold hits $1290.50, the limit order will be executed while the stop-loss order will be canceled. Or else if the price falls to $1289.50, the stop-loss order will be executed while the limit order will be canceled.
23. What is GTC?
Good-till-canceled (GTC) describes an order an investor may place to buy or sell that remains active until either the order is filled or the investor cancels it. If the market price hits the price of the GTC order before it expires, the trade will execute. Investors may also place GTC orders as stop orders, which set sell orders at prices below the market price and buy orders above the market price to limit losses.