Forex Signals | Forex Trading Signals | Signals Service » Forex What Is http://forex.firepips.com Mon, 21 May 2012 08:10:14 +0000 en hourly 1 http://wordpress.org/?v=3.2 http://forex.firepips.com http://forex.firepips.com/wp-content/mbp-favicon/favicon.ico Forex Signals | Forex Trading Signals | Signals Service What is Forex Mini, Micro and Standard Lot? http://forex.firepips.com/what-is-forex-mini-micro-and-standard-lot.html http://forex.firepips.com/what-is-forex-mini-micro-and-standard-lot.html#comments Tue, 25 Nov 2008 05:15:38 +0000 FirePips http://forex.firepips.com/?p=209

Forex Lots

A Forex Lot is the amount of currency you buy or sell. Say for example you wish to buy 100,000 USD, 100,000 is basically your trade size.

Forex Lot is basically representation of Trade Size in a different format. A Standard Lot would represent 100,000 of any currency, whereas a Mini Lot represents 10,000 and a Micro Lot represents 1,000.

So essentially 10 Mini Lots make 1 Standard Lot and 10 Micro Lots make 1 Mini Lot.

100,000 of a currency represents one Standard Lot or ten Mini Lots or one hundred Micro Lots in Forex market.

100 Micro Lot = 10 Mini Lot = 1 Standard Lot

When you place orders online you should know what account you have and how your broker lets you trade. For example with MBT, you can have an Standard Forex Account and still place trades in Mini Lots. On the other hand with Dukascopy you can only trade Standard Lots.

You may also want to read about Different Type of Forex Accounts.

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]]> http://forex.firepips.com/what-is-forex-mini-micro-and-standard-lot.html/feed 9 What is a Forex Margin Call? http://forex.firepips.com/what-is-a-margin-call.html http://forex.firepips.com/what-is-a-margin-call.html#comments Mon, 03 Nov 2008 06:59:39 +0000 FirePips http://forex.firepips.com/?p=135
Forex Margin Call

Forex Margin Call

Forex Margin Call, the term Margin Call comes from Stock Market. It is essentially a phone call from the Stock broker asking you to put more funds in your account to sustain the losses from open positions. At this stage trader is required to put more money in the account usually with in 24hrs or else the position would be closed at a loss. This loss can very well exceed the total account balance and you may still need to pay Stock broker for the remaining losses. The situation is worsen when you use leverage to borrow money from the bank or stock broker.

Forex Margin Call works in a slightly different manner. First off all there is no phone call from the broker. Soon after the message all / some of your open positions will be closed to free up some of the margin that was put aside when you open the position.

The only good thing about Forex Margin Call is that you won’t lose more money than your total account balance. Most brokers would close out all your positions before you run out of balance in your account. However in some cases where price gaped after the weekend may result in loss beyond your account total balance. I would recommend to check with your broker to find out about their policies regarding Forex Margin Call.

You may also want to read about Forex Leverage.

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]]> http://forex.firepips.com/what-is-a-margin-call.html/feed 1 What is Forex Leverage? http://forex.firepips.com/what-is-forex-leverage.html http://forex.firepips.com/what-is-forex-leverage.html#comments Thu, 30 Oct 2008 06:44:02 +0000 FirePips http://forex.firepips.com/?p=106 Forex Leverage or Leverage simply means the % amount of money you are allowed to borrow from the broker when you open a position. Typically in Stock market when you buy 100 shares of a company trading at $10 per share, you are required $1000 to open the trade. Some stock brokers would let you borrow money from them, most cases it is 50-80% of the total stock value.  So instead of $1000 you are now only required to have $500. This helps traders to buy more shares with same amount of money. However stock broker would charge you interest on the money borrowed.  Forex Leverage is similar except on steroids.

Forex Leverage

A typical Forex Broker would let you borrow 99% of the total value required to open a trade and you only need to come up with the remaining 1%. So if you are about to trade $1000 then you only need to have $10. Big difference from normal stock trading. Also Forex broker won’t charge you interest on the borrowed amount.

Leverage In Forex Market

Note that in case of stock trading you will liable to pay up $500 (or more) you borrowed in case of a loss. In Forex, your broker will close out all open trades as soon as your account available balance reaches zero.

The above table is only a guide, when trading live the Required Margin will change based on currency pair. In my personal opinion one should not go beyond 100:1 leverage in Forex trading. However your opinion may differ so feel to add comment with your preferred Forex leverage and why.

You may also want to read about “Does higher Leverage in Forex Trading help?”

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]]> http://forex.firepips.com/what-is-forex-leverage.html/feed 9 What is Forex Pip? http://forex.firepips.com/what-is-forex-pip.html http://forex.firepips.com/what-is-forex-pip.html#comments Wed, 29 Oct 2008 11:46:38 +0000 FirePips http://forex.firepips.com/?p=103 Price Interest point (Pip) is the term used in Forex market to represent the smallest price increment in a currency. It is often referred to as ticks or points in the market.  The easiest way to understand Forex Pip is to look at that last number from the right of a currency pair.

Lets say EUR/USD moves from 1.2225 to 1.2226 then it said to have moved up by 1 Pip.  Note that there are 4 decimal places in EUR/USD, in case of crosses like USD/JPY there are only two decimal places ex. 93.10. In case of USD/JPY if it moves from 93.10 to 93.11 then it is considered as 1 pip move.

Most ECN brokers have an extra digit known as Fractional Pip. EURUSD price on their platform would look something like this “1.22251″.  A  move to 1.22266 takes place when price moves by 1.5 pips.

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