The first Forex trading basics is that this is a large, and growing larger market for exchanging currencies. There is no specific location or central exchange for this market, like the New York Stock Exchange. The trading that is done through this market is exclusively done over the telephone or electronically. The Exchange has no set hours; you can trade currencies twenty-four hours a day.
The exchange rate is calculated from the differences between currencies. If the Euro were worth forty-two cents more than a United States dollar then one Euro would cost one dollar and forty-two cents. When you buy a Euro you sell the same amount in dollars.
Your base currency is the type of money you use in your country. The counter currency is the money you are buying; these are called the currency pairs. Just like other markets currency codes or abbreviations are used. A list can be found online.
A dealing desk is a forum where liquidity, trades are executed and pricing is posted. The market maker is the person, who provides the pricing and buys and sells the currency, to be traded. He can offer the same trade to other participants creating an offset.
A no-dealing desk is brokers who perform the trades for you through other peoples dealing desks and doesn’t have a dealing desk of their own. Forex is an example of this type of no-dealing desk. Forex is an Electronics Communications Network that makes available a marketplace where multiple market makers, traders and banks can compete with bids, giving them more options for trades.
When you go into the ECN you will see the sell quotes or price on the left. The offer or buy quote is on the right, which is the price the market maker is asking. The spread is the difference between the buy and sell prices. The pip is the least amount you can make and can be fixed or variable. 코인마진거래
The lot is the standard amount of currency from the base. Standard is usually one hundred thousand units, mini lot is ten thousand and a micro is one thousand. The margin is a deposit that is required to open an account or a position. The position can be bought or sold.
Leverage is when you buy a position that exceeds your margin. If your margin is one thousand and you open a one hundred thousand position, your leverage would be one hundred to one. By leveraging you have the opportunity to make more money on the deals.
A dealer can intervene and execute and order manually. This is called a manual execution. If an order is executed with out the dealer being involved it is called an automatic execution. Sometimes when a manual execution occurs there is a difference between the executed price and the order price and is called slippage. The draw down is a term used to depict the decline in the balance of your account from the top or peak to the bottom or valley.