(example, using the Easy-Forex platform
Step1: Deciding to perform a Forex deal
You have an intention to trade Forex, and you have your own reasoning for doing so - e.g. you feel that the USD will increase compared with the EUR. The EUR/USD exchange rate is, at the time, around 1.5000 (the common presentation of the Euro-US$ pair is EUR/USD, meaning 1.5000 US dollars for 1 Euro). Your feeling can be based on your experience, or on technical analysis, or fundamental analysis, etc. For whatever reason, you belive that the USD will rise to around 1.4850 (EUR willbe down, which means USD will go up. Or you will need less USD for 1 euro). You want to profit if your forecast is correct, and so choose to make a trade.
Step2: Determining the deal
Below is a screen-shot of a day-Trading deal in the making and an explanation of each step required to put the trade into effect:
Select currencies: Select the currency to buy and the currency to sell. This is your currency pair. There is no connection between your base working currency (or account base currency , the currency in which you handle your Forex account and make deposits and withdravals) and the currencies in the low in terms of Euro, and it will close the deal, and get more EUR for the USD you previosly 'bought' - hence, you make profit.
Select the Amount to trade: Since Forex trading is ''non-delivery'' trading (i.e.- no physical currencies are transacted), the Forex deal (contract) has a "volume" , or "size" , meaning the amount of the currencies in this contract. You determine the volume of the contract, but you do not have to purchase the whole amount. In general, you work in the most common leverage (see below), 1:100: therefore a deal of 10,000 Euro will require much less money to facilitate it.
Select the Amount (Margin) to risk: This is your investment. This is the amount you risk, meaning the MAXIMUM amount you can lose. On a 1:100 leverage, EUR 10,000 against USD thus requires only USD 100 (in fact, the actual leverage you are offered in this case is 1:150, since you "buy" EUR 10,000 with USD 15,000, according to the example rate of 1.5000, guaranteed using only USD 100 of your own money).
Stop-Loss rate: This is a currency exchange rate at which your deal would automatically close in the event the market ran counter to your forecast. In this event, you would lose your USD 100 investment. You can define another Stop-Lose rate, however, the "Margin to risk" will change accordingly. There is a direct relationship between the Stop-Loss rate and the "Margin" (i.e the amount risked) required for the deal.
Freeze Rate: This feature is unique to the Easy-Forex Trading Platform. You see the rate for the deal and are almost ready to accept it, but before you do, you need another couple of seconds to think. With the freeze rate feature you are allowed a small window of time to either decline or accept the deal.
Accept: When you are ready, click "Accept" and your deal is activated. You have enough money in your Forex account to make the deal, so it's in play. You are holding now an "Open Position" in Forex.
Set SMS Alert: If you have signed up to the SMS Alert service you can set an alert for this deal. You will be notified via text to your mobile phone when this deal closes (either because it reached it's Stop-Loss or Take-Profit rate).
Please note, "Renewal until...": The Day-Trading deal resembles a "spot" transaction (but is not identical). The rates in the deal are the updated current rates ("spot"), and the deal may be closed anytime during the trading day. However, the trader can extend the deal to the following day (paying a small renewal fee). Most platforms offer an automatic renewa of the deal, for a few days period. The trader may close the position at any time. If the trader closes the deal before the indicated closing time (usually it is 22:00 GMT), no renewal fee will be charged for that day.
Step3: Checking account status
Below is a screen-shot of a typical "My Position" report:
With online platforms ,traders have 24x7 access in order to monitor open positions, to close positions, or change parameters (definitions) in the deal.
You can check your positions for Day Trades, Limit Orders and Forwards (if this is offered in your region). You can also check the status of the SMS Alerts you have set.
To view the details of a specific deal, click on the + (plus) sign.
Visual Trading is unique to Easy-Forex and it allows you to easily view the significant details of your deal, in real time, as shown in the sliding graph on the right.
ID: The reference number of the deal, as recorded in the platform.
Buy: The volume of the currency "bought".
Sell: The volume of the currency "sold".
Open Rate: The exchange rate of the currency pair at the time the deal was oppened by the trader.
Current Rate: The exchange rate of this currency pair at the time the trader is viewing the screen.
Stop-Lose rate: The rate defined for automatic "stop-loss" of the deal. The deal will close if this rate accurs in the market during the time the deal is active.
Take-Profit rate: (Not defined in this example). This is the rate at which the deal will close automatically assuming the market moves in the direction forecast by the trader. When defined, this rate allows a trader to take profit automatically when a set rate is achieved, thus allowing the trader to focus on other tasks rather than watching the market closely.
Profit/Loss: The current status of the trader's position. This will be the profit (or the loss) from this deal, if it was closed at this very second.
Open date: The day the deal was oppened by the trader.
Rolling until: The last day to which the deal will be automatically renewed.
Amount (Margin) to risk: The amount invested by the trader for the deal. This is the maximum amount the trader can lose.
Step4: Modifying your deal
This is where you can change Stop-Loss and Take Profit rates. You can also test out profit and loss scenarios with the Trade Controller.
Change Stop-Loss: The trader is allowed to change their Stop-Loss, at any time while the deal is still active. As previously mentioned, doing so would affect the amount of margin needed for the deal. If the trader changes the Stop-Loss downward (in a case where the position is losing, and is now near the automatic closing), then additional funds will be required for margin. If the trader changes the Stop-Loss upward (in a case where the deal will already see a profit, and the trader wishes to define a higher Stop-Loss to decrease the original risk), then the difference will be credited.
Change Take-Profit: Similarly, the trader is allowed to define, or change, a Take-Profit rate. Note that unlike a Stop-Loss rate, the trader does not have to define any Take-Profit rate; it simply allows the trader to focus on tasks other than rate-watching.
Trade Controller: The trader can key in various hypothetical exchange rates to see their impacton their overall position (amount of profit or loss), if and when such rates accur in the market. You can do this manually on the trading ticket or to make it even easier use the Trade Controller.
Inside Viewer: This is a snapshot of all open Day Trades by traders on the Easy-Forex platform. You can view the Popularity of a specific currency pair. The Direction or percentage of buy or sell of a pair. And the Structure of open deals, the average Stop-Loss and Take-Profit rates set by other traders.
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