Trading FAQ’s
What Is the Goal in Currency trading?
Goal in trading is to buy at a lower price and sell at a higher price. You can buy a market instrument (quantity of 100,000) for 1.2349 and sell it later for 1.2458. You will make a profit of 1090 (in currency the instrument is denominated in).
What can I trade on the market?
Review market instruments provided by SpotFX. Here you can filter instruments by their type. The list of market instruments is a subject to change.
What is the easiest way to start trading?
The easiest way to start trading is to start SpotFX FREE $100,000 Demo Account. Whether you loose or gain, you can hone your skills in this safe trading environment until you feel comfortable and well-prepared to start trading for real profit.
When is the market open for trading?
You can trade from Sunday 17:00 to Friday 17:00 Standard Eastern Time (New York local time). Virtual trading is open at all times. Check New York local time @ http://www.timeanddate.com/library/abbreviations/timezones/na/est.html.
The following market schedule is based on New York local time: Japan markets open at 7:00 pm followed by Singapore and Hong Kong that open at 9:00 pm. European markets open in Frankfurt at 2:00 am, while London opens at 3:00 am. New York markets open 8:00 am (NYSE opens at 9:00 am). European markets close at noon, and the Australian markets start trading again at 6:00 pm.
What is a “long” and “short” position?
A long position (buy-and-sell) represents position in which a trader buys a market instrument at one price and aims to sell it later at a higher price. In this scenario, the trader benefits from a rising market.
A short position (sell-and-buy) represents position in which the trader sells a market instrument in anticipation that it will depreciate. In this scenario, the trader benefits from a declining market.
What is “Entry Limit” and “Stop Level”?
A limit order is an order to buy below the current price, or sell above the current price. If a market instrument is trading at a price you believe is too expensive, you can place a limit order to buy at a lower price you determined. If executed, this will give you a so called long position – a better position compared to the one if you had bought the instrument with a “market order”.
A stop order (also stop-loss order) is an order to sell or buy a security once the price of the security has climbed above (or dropped below) a stop price specified by you, the trader. When the specified stop price is reached, the stop order is entered as a market order (no limit). This means the trade will definitely be executed.
If a market instrument trades below, trader can place a stop buy order at a higher price. In case the market moves up to that price, your order will execute and open a long position. If market continues in the same direction (trend), the position will bring you profit.
What is Stop-Loss and Target Level?
A stop-loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses, in case the market move against the trader’s position. “Exit target level” is a price level at which you want to close your position, when you reach certain profit. You can set the exit target level when you open your position or at any time while the position is open.
What are GTC, GTD and IOC orders?
GTC (Good Till Cancelled) order will stay in the market until you cancel it and it is the default order duration type. GTD (Good Till Date) will stay in the market until a date you specify, and IOC (Immediate Or Cancel) order will be executed immediately (if other order conditions are met) or cancelled.
What is a point, and position point value?
Point is the smallest change in a market instrument’s price. If a price changed from 1.3000 to 1.3001 or from 302.21 to 302.22, it changed by 1 point. Point value depends on your position size.
Are there any restrictions on quantity?
SpotFX doesn’t have quantity specifications. You can specify any position size in our trading system. For example, you can specify: 1, 3, 7, 23, 154, 837, 3497, 10,000, 100,000 or any other quantity when sending an entry order.
Where can I see spread sizes?
Spreads between bid and ask prices are variable based on the market conditions. List of standard price spreads on the market instruments available for trading:
EUR/USD: 2, USD/JPY: 3, GBP/USD: 4, USD/CHF: 4, USD/CAD: 4, AUD/USD: 4, NZD/USD: 4, EUR/JPY: 4, EUR/GBP: 3, EUR/CHF: 4, GBP/JPY: 8, AUD/JPY: 5, CHF/JPY: 5, GBP/CHF: 8, EUR/CAD: 10, EUR/AUD: 10, AUD/CAD: 10, Constantine: 0.60%, Yangtze: 1.00%, Asiasset: 1.00%, Brasillion: 1.00%, Indiamond: 1.00%, Nippon: 1.00%, Columbus: 1.00%, Eastera: 1.00%, Dow Jones: 475 (950), Nasdaq 100: 90 (270), S&P 500: 50 (200), DAX: 275 (550), FTSE 100: 450 (900), CAC 40: 200 (400), Russell 3000: 35 (105), Gold: 80, Silver: 55, Platinum: 475 (2375), Palladium: 380 (1900).
Please note that price spreads often unexpectedly change and greatly increase during weekends, in after-hours trading, in case of market-related announcements or market turmoil.
Limit Order and Stop-Loss Order
The limit order and the stop-loss order represent the best risk management tools in trading. A limit order places restriction on the maximum price to be paid or the minimum price to be received. A stop-loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against a trader’s position.
What kind of strategy should I use?
Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities.
Fundamentalist traders predict price movements by interpreting a wide variety of economic information, including news, business reports, government-issued indicators and reports, and even rumors. The most dramatic price movements, however, occur when unexpected events happen. The event can range from a central bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.
How long are positions maintained?
As a general rule, a position is kept open until one of the following occurs:
1) realization of sufficient profits from a position; 2) the specified stop-loss is triggered; 3) another position that has a better potential appears and you need these funds.
Goal in trading is to buy at a lower price and sell at a higher price. You can buy a market instrument (quantity of 100,000) for 1.2349 and sell it later for 1.2458. You will make a profit of 1090 (in currency the instrument is denominated in).
What can I trade on the market?
Review market instruments provided by SpotFX. Here you can filter instruments by their type. The list of market instruments is a subject to change.
What is the easiest way to start trading?
The easiest way to start trading is to start SpotFX FREE $100,000 Demo Account. Whether you loose or gain, you can hone your skills in this safe trading environment until you feel comfortable and well-prepared to start trading for real profit.
When is the market open for trading?
You can trade from Sunday 17:00 to Friday 17:00 Standard Eastern Time (New York local time). Virtual trading is open at all times. Check New York local time @ http://www.timeanddate.com/library/abbreviations/timezones/na/est.html.
The following market schedule is based on New York local time: Japan markets open at 7:00 pm followed by Singapore and Hong Kong that open at 9:00 pm. European markets open in Frankfurt at 2:00 am, while London opens at 3:00 am. New York markets open 8:00 am (NYSE opens at 9:00 am). European markets close at noon, and the Australian markets start trading again at 6:00 pm.
Trading Fundamentals, Processes and Terminology
What is a “long” and “short” position?
A long position (buy-and-sell) represents position in which a trader buys a market instrument at one price and aims to sell it later at a higher price. In this scenario, the trader benefits from a rising market.
A short position (sell-and-buy) represents position in which the trader sells a market instrument in anticipation that it will depreciate. In this scenario, the trader benefits from a declining market.
What is “Entry Limit” and “Stop Level”?
A limit order is an order to buy below the current price, or sell above the current price. If a market instrument is trading at a price you believe is too expensive, you can place a limit order to buy at a lower price you determined. If executed, this will give you a so called long position – a better position compared to the one if you had bought the instrument with a “market order”.
A stop order (also stop-loss order) is an order to sell or buy a security once the price of the security has climbed above (or dropped below) a stop price specified by you, the trader. When the specified stop price is reached, the stop order is entered as a market order (no limit). This means the trade will definitely be executed.
If a market instrument trades below, trader can place a stop buy order at a higher price. In case the market moves up to that price, your order will execute and open a long position. If market continues in the same direction (trend), the position will bring you profit.
What is Stop-Loss and Target Level?
A stop-loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses, in case the market move against the trader’s position. “Exit target level” is a price level at which you want to close your position, when you reach certain profit. You can set the exit target level when you open your position or at any time while the position is open.
What are GTC, GTD and IOC orders?
GTC (Good Till Cancelled) order will stay in the market until you cancel it and it is the default order duration type. GTD (Good Till Date) will stay in the market until a date you specify, and IOC (Immediate Or Cancel) order will be executed immediately (if other order conditions are met) or cancelled.
Trading Facts and Specifics
What is a point, and position point value?
Point is the smallest change in a market instrument’s price. If a price changed from 1.3000 to 1.3001 or from 302.21 to 302.22, it changed by 1 point. Point value depends on your position size.
Are there any restrictions on quantity?
SpotFX doesn’t have quantity specifications. You can specify any position size in our trading system. For example, you can specify: 1, 3, 7, 23, 154, 837, 3497, 10,000, 100,000 or any other quantity when sending an entry order.
Where can I see spread sizes?
Spreads between bid and ask prices are variable based on the market conditions. List of standard price spreads on the market instruments available for trading:
EUR/USD: 2, USD/JPY: 3, GBP/USD: 4, USD/CHF: 4, USD/CAD: 4, AUD/USD: 4, NZD/USD: 4, EUR/JPY: 4, EUR/GBP: 3, EUR/CHF: 4, GBP/JPY: 8, AUD/JPY: 5, CHF/JPY: 5, GBP/CHF: 8, EUR/CAD: 10, EUR/AUD: 10, AUD/CAD: 10, Constantine: 0.60%, Yangtze: 1.00%, Asiasset: 1.00%, Brasillion: 1.00%, Indiamond: 1.00%, Nippon: 1.00%, Columbus: 1.00%, Eastera: 1.00%, Dow Jones: 475 (950), Nasdaq 100: 90 (270), S&P 500: 50 (200), DAX: 275 (550), FTSE 100: 450 (900), CAC 40: 200 (400), Russell 3000: 35 (105), Gold: 80, Silver: 55, Platinum: 475 (2375), Palladium: 380 (1900).
Please note that price spreads often unexpectedly change and greatly increase during weekends, in after-hours trading, in case of market-related announcements or market turmoil.
Strategies and Techniques
Limit Order and Stop-Loss Order
The limit order and the stop-loss order represent the best risk management tools in trading. A limit order places restriction on the maximum price to be paid or the minimum price to be received. A stop-loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against a trader’s position.
What kind of strategy should I use?
Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities.
Fundamentalist traders predict price movements by interpreting a wide variety of economic information, including news, business reports, government-issued indicators and reports, and even rumors. The most dramatic price movements, however, occur when unexpected events happen. The event can range from a central bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.
How long are positions maintained?
As a general rule, a position is kept open until one of the following occurs:
1) realization of sufficient profits from a position; 2) the specified stop-loss is triggered; 3) another position that has a better potential appears and you need these funds.
