| Opening an account and remitting Margin money |
| As a retail investor, you need to become client of some registered broking entity offering Spot Forex Trading. Majority of the entities offering Forex trading facilities to their clients are either re |
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| Trading Mechanism |
| On successful opening of Forex Account, a client can place trades either through a Trading Platform or through a “Call and Trade center” set up by the service provider.
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| Understanding Margin and leverage |
| Margin can be understood as collateral against an open position. It is the amount that is blocked from your existing trading equity when you place a trade.
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| Understanding Inherent Risk in Margin Trading |
| Margin trading enables a client to leverage his position and trade considerably higher values than they would have done without leverage. But this is not without inherent risks. |
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| Understanding Margin Calls |
| In case of running losses in their open positions, client’s Account Equity may fall below the Margin Requirement for the said positions. In such a case, the trading system generates Margin Calls to b |
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| Understanding Position Liquidation |
| Liquidation is the next step to margin call if the account is not topped-up or the position(s) don’t start moving in the favour of the client. |
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| Understanding Value-date |
| All Spot Forex contracts are essentially a customized Forward Contract with set value dates, i.e. date on which Delivery of the contracted item has to take place in exchange for the agreed upon price. |
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| Roll-over of Open Positions/Avoidance of Delivery |
| As brought out in the concept of value-date, a client needs to settle his open positions on a T+2 basis, unless there is a system to roll-over the open positions to the next business day continually. |
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| Pricing of Open Positions |
| To enable rolling over and hence, allowing the clients to keep their positions open till whatever date they wish to, all open positions are marked-to market with the latest price for the instrument du |
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| Financing of Open Positions/ Rollover Charges and Credits |
| Rolling over of a position results into a charge against the client or a credit into the client’s account. Rollover charges / credits are generally shown in the ledger activities column. A negative nu |
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| Placing Orders on the Trading Platform |
| Imagine a situation, wherein you have an open long position in EURUSD at 1.2735/38 and you are stuck in a meeting. There is a possibility that over the course of your meeting, the currency-pair would |
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