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.