Forex is short for foreign exchange. The forex market is a place where
currencies are traded. It is the largest and most liquid financial market in the world with an
average daily turnover of 6.6 trillion U.S. dollars as of 2019. The basis of the forex market is the
fluctuations of exchange rates. Forex traders speculate on the price fluctuations of currency pairs,
making money on the difference between buying and selling prices.
What is Margin?
Margin is the amount of a trader’s funds required to open a new position.
Margin is estimated based on the size of your trade, which is measured in lots. A standard lot is
100,000 units. We also provide mini lots (10,000 units), micro lots (1,000 units) and nano lots (100
units). The greater the lot, the bigger the margin amount. Margin allows you to trade with leverage,
which, in turn, allows you to place trades larger than the amount of your trading capital. Leverage
influences the margin amount too.
What is leverage?
Leverage is the ability to trade positions larger than the amount of capital
you possess. This mechanism allows traders to use extra funds from a broker in order to increase the
size of their trades. For example, 1:100 leverage means that a trader who has deposited $1,000 into
his or her account can trade with $100,000. Although leverage lets traders increase their trade size
and, consequently, potential gains, it magnifies their potential losses putting their capital at
risk.
When is the forex market open?
Due to different time zones, the international forex market is open 24 hours a
day — from 5 p.m. Eastern Standard Time (EST) on Sunday to 4 p.m. EST on Friday, except holidays.
Markets first open in Australasia, then in Europe and afterwards in North America. So, when the
market closes in Australia, traders can have access to markets in other regions. The 24-hour
availability of the forex market is what makes it so attractive to millions of traders.
