This was a profit from the Forex trade modern, because by capital smaller you could get the value of the transaction that bigger.

Many traders consider leverage dangerous because traders add bigger position sizes without actually owning them. Nevertheless, leverage is an exceptionally good tool that can be utilized to increase your buying power as long as trader has a risk management plan associated with it. Some seasoned currency trader harness leverage effectively in currency trading. They apply small leverage to test the market sentiment. Once the strategy works with small position size and leverage, they then multiply leverage quickly to maximize profit potentials.

The margin was the value of the guarantee when you will carry out a transaction, and the size was 1% from quantity contract size that was traded in by you.

This was significant when you want to transaction in an amount certain (quantity) then you must guarantee as big as 1% him (the example: you trading in quantity $10000, then your account would automatically guarantee as big as 1% him, that is $100 from your capital that $500 this), because to confirm and guarantee that you had the fund that was enough to transaction in this number, and when evidently was not enough the fund then your transaction would automatic was refused. But after your transaction was finished then the margin (the guarantee) you this will be returned again to you like originally

Why Margin Requirement Matters?

Leverage is a double-edged sword. With proper usage, it can enhance customers' funds to generate quick returns and increase the potential return of an investment. However, without proper risk management, it can lead to quick and large losses.

Most forex trading firms offer customizable leverage; traders can choose the leverage ratio they feel most comfortable with. Customers should be aware of how to guard against over trading an account and managing overall risk.

Before you start trading there is also should you know that forex market provides different kinds of orders for trading. A Trader must understand what each order is, what part it plays in capturing profit.

There are some major types of orders that forex trader can be found on forex trading station that all traders must use : Market Order, Limit Order, Stop Loss Orders, Take Profit Orders, and Good Until Cancelled.

The two primary orders use for entering and exiting the market are Limit Order and Stop Loss Order. Once and order is placed your order to enter the market, there are two critical procedures: One Cancels the Other (OCO) and Cancel and Replace. Properly executing orders and understanding these procedures are vital steps to profitable trading.

Market Orders

A Market Order is an order that is given to a broker to buy or sell a currency at whatever the market is trading for at that moment. It also can be an entry order into the market or an exit order to get out of the market, it also called At The Market.

Trader should be caution when using Market Orders in fast moving markets. During periods of rapid rallies or down reactions gain or lose of many points may occur due to slippage before receiving the fill.

Slippage is defined as : A trade is executed between a buyer and seller and the resulting buy or sell transaction is different than the price seen just prior to order execution. On average 1-6 pips will be lost with market orders, perhaps more due to slippage. Market orders are rarely filled at the exact anticipated price.

Trading is an auction where there are buyers (bidders) and seller (offerers). The Bid is the “Buy” and the “Ask” or Offer is the Sell. All Traders must be caution when entering or exiting with Market Order.

Limit Order

Limit Orders are orders given to broker to buy or sell currency lots at a certain price or better. Limit Orders are generally used to acquire a specific price , avoiding slippage and unwanted order fills (execution price) which can happen with Market Orders.

Stop Loss orders

An order placed to close a position when it reaches a specified price. It is designed to limit a trader's loss on a position. If the position is opened with buying a currency pair, the stop loss order would be a request to sell the position when the price fall to the specified level. And vice versa. Traders are strongly recommended to use stop loss orders to limit their losses. It is also important to use stop loss orders when investors may enter a situation where they are unable to monitor their portfolio for an extended period.

Take Profit Orders

An order placed to close a position when it reaches a predetermined profit exit price. It is designed to lock in a position's profit. Once the price surpasses the predefined profit-taking price, the take profit order becomes market order and closes the position.

Good Until Cancelled (GTC)

In online forex trading, most of the orders are GTC, meaning an order will be valid until it is cancelled, regardless of the trading session. The trader must specify that they wish a GTC order to be cancelled before it expires. Generally, the make orders, stop loss orders and take profit orders in online forex trading are all GTC orders.

One cancels the Other (OCO)

Whenever entering the market, exiting the market at some future time is required. An OCO orders is a procedure and means one cancels the other. Upon entering the market, place a protective Stop Loss Orders and establish a projected profit target. That projected profit target can be your limit order.

If you simultaneously place Limit and Stop loss Orders when you enter the market, you can OCO them and walk away from your computer. What does that mean? At some future point in time either you Stop Order or Limit Order will be executed, automatically cancelling your opposing order. If the trader is so sure about the trade, he/she can execute an OCO order and walk away from the trade and the trading software will then manage the trade.

How to count results of my transaction in FOREX?

Along with was his method: for FOREX that against USD this had 2 kind sorts currency main that the public was traded in that is the Direct kind and Indirect the Example: - Direct: GBP/USD, EUR/USD, AUD/USD, etc (no matter what/USD) Indirect : - USD/JPY, USD/CHF, etc. (USD/. )

And for his calculation: like us began trading Forex this by capital breakingprep early as big as US$5000 (the regular account), afterwards the calculation method of our transaction was:

For Direct currency: our example trading in the regular Forex account kind that afterwards we inputkan quantity contract size him = US$100,000 and we did Buy in EUR/USD in the position 1.2000 and afterwards in close Sell (take the profit) in the position 1.2010, then we would the profit as big as: (1.

2010 - 1.2000) x 100000 = $100 (the profit) or was the reverse if loss also was the same his calculation

For Indirect currency: our example trading in the regular Forex account kind that afterwards we inputkan quantity contract size him = US$100,000 and we did Sell in USD/JPY in the position 110.10 and afterwards in close Buy (take the profit) in the position 110.00, then we would the profit as big as: ((110.

10 - 110.00) x 100000)/the position liquid 110.00 = $90.91 (the profit) or was the reverse if loss also was the same his calculation.

In Foreign Currency Exchange (FOREX), earnings are expressed in "pips". Pip is short for Price Interest Point, also called points. Whereas the smallest denomination in USD is the penny ($.01), in Currency Exchange, funds can be traded in an even smaller denomination, $0.0001. This means that very small movements in currency prices can create large profits. So, a PIP is the smallest unit a currency can be traded in. The actual value of a pip is not a set price. If you are trading with a standard account, a pip is worth $10. If you are trading a mini account, a pip is only worth $1. The value of a pip changes based upon the size of your account, because the size of your account affects how much currency you can leverage. A standard full size trading account is 100,000 units of the base currency. If you are trading in USD, a standard account has a value of $100,000 USD. A mini lot is 10,000 units of base currency. If you are trading mini lots, you can leverage $10,000. This is why a pip in a mini account is worth less than a pip in a standard full sized account.

What is a spread?

In margin forex trading, there are two prices for each currency pair, a "bid" (or sell) price and an "ask" (or buy) price. The bid price is the rate at which traders can sell to the executing firm, while the ask price is the rate at which traders can buy from the executing firm.

Bid/Ask

For example, when you see the price quote of EUR/USD is 1.2881/1.2884 as in the above picture, the bid is 1.2881 whereas the ask is 1.2884. That means traders looking to sell must do so at 1.2881, those looking to buy must do so at 1.2884.

The difference between the bid and ask price is the spread, which constitutes the cost of the trade. In fact, all traded instruments - stocks, futures, currencies, bonds, etc. - have spread. If a trader buys at 1.2884 and then sells immediately, there is a 3-point loss incurred. The trader will need to wait for the market to move 3 points in favour of his/her position in order to break even. If the market moves 4 points in your favour, he/she starts to profit.

Many online trading firms like to promote margin forex trading as an almost cost-free instrument - commission free, no service charge, no hidden cost, etc. Traders should know that spread is the cost of trading, and in fact, it also represents the main source of revenue for the market maker, i.e. the forex trading company. The spread may appear to be a minuscule expense, but once you add up the cost of all of the trades, you will find it can eat away quite a portion of your account or your profit. If you check the price tag of a T-shirt before you buy it, do the same thing when you trade forex, look into the spread before you decide to trade. Your trade needs to surmount the spread (the cost) before it profits.

In the foreign exchange market, the spread can vary a lot depending on the executing firm and the parties involve. Inter-bank foreign exchange can have spread as tight as 1-2 pips, while the bank can widen the spread to 30-40 pips when dealing with individual customers. If you check out the spread of those small exchange shops nearby the tourists' sights, you may find the spread can go up to 400 to 600 pips.

It is important for a trader to find the tightest spread as possible, but anything that is far lower than the typical spread is skeptical. The spread is the main source of revenue of a forex trading firm, if the firm cannot earn enough from the spread, there maybe some other hidden cost in the transaction.

Another point to note is that many market makers often widen the spread when market conditions become more volatile, thus increasing the cost of trading. For instance, if an economic number comes out that is off expectations, thereby creating a flood of buyers or sellers, the market maker may often widen the spread to restore the balance between buyers and sellers. As a result, traders should inquire about the execution practices of their clearing firm; firms with poor execution of orders and a tendency to widen spreads will ultimately result in higher trading costs for the end user.

The movement of the Forex market proceeded beginning with the market of New Zealand & Australia that took place struck 05.00-14.00 WIB, went straight to the Asian market that is Japan, Singapore & Hong Kong that took place struck 07.0016.00 WIB, to the European market that is Germany & England that took place struck 13.00-22.00 WIB, arrived at the American market that took place struck 20.30-10.30 WIB. in the development of his history, the central bank belonging to countries with the reserve big foreign currency although could be overcome by the strength of the market forex that free.

According to the survey of the BUS (the Bank International for Settlement the world central bank), that was carried at the end of 2004 out, thought the market transaction forex reached more than USD$1,4 Trillion per his day.Therefore, the investment prospect in the trade forex was very good.

Considering the level of the liquidity and the acceleration of the movement of the expensive price this, FOREX also became alternative that most popular because of ROI (Return ounce Investment or the return the value of investment that was buried by us) as well as the profit that will be gotten could exceed in general the trade generally (usually in general return revolving more than 5% - 10% per his month, in fact could reach more than 100% per his month to professional trader).

Resulting from the fast movement this, then FOREX also involved a high risk if you did not have knowledge that was enough as well as the management regulation of finance well.

Then, what was currency that was traded in?

All currency the public world and had the power sold high.
The example: USDollar, Yen, Euro, Franc, sterling pound.
(EUR/USD, GBP/USD, USD/JPY, USD/CHF).Etc

Is FOREX "Two Ways Opportunities?" Yes! The transaction could be in FOREX carried out by means of 2 directions in taking his profit. BUY (offer) beforehand, then was closed with take the SELL profit (bid) or was the reverse did SELL beforehand, then was closed with take the BUY profit.

What the difference between traditional Forex and modern Forex?

For the market forex (foreign currency) traditional leverage that was worn was 1:1, or significant to trading with a value of $5000 you needed money $5000 also, or was significant in the traditional forex market needed big capital, and generally the trade traditional forex was done in an offline manner (usually in money changer or in the bank).

Whereas the market modern forex in his trade used leverage (the power pry into/contract size) yg generally 100:1, his trade then made use of the online media. So in modern forex you must only spend capital $50 to be able to trading in the number $5000.