Steps For Beginners
Trading with a Margin
People think that trading on a Margin in a Forex market is difficult but it is not as difficult as it seems to be. Read below to understand how to trade with a margin:
When any trader is trading on margin, he is essentially he is using the short term credit that he has received for free from the institution which is offering the margin. This short term credit allowance is used to purchase an amount of currency that exceeds the value of the amount available in the account. Margin here is used to cover the losses if incurred during the trading. Actually nothing is being sold or purchased for delivery, the only purpose for margin is to have sufficient funds in your account.
At Zara MT we provide margin services so that our client can take risks and trades with ease in the market. Although we never advise to trade on the highest margin as it involves a lot of risk. At last the choice is left on the trader as how he would like to deal and take risks for the trading.
Trading in Forex
Trading in Forex is not very tough as forex is the most liquid market in the world. Placing any order with Forex is simple: Choose your currency pair , your currency and the currency you want in exchange. You just need to click on an online platform to get going.
Though it seems easy but it is not very easy, the forex market has its own rules and regulations. Check with the following points that will help you with important tips and guidelines:
A market order is an order to buy or sell something at the market price. Our customers who are using our online platform to place an order can do so after they have specified their deals. The deals are clinched instantly. Orders can be placed via phone but its takes a few seconds more than that placed online. The process goes like:
The exact process goes like this:
- A customer specifies the currency pair and the size of the deal to the system.
- The system then provides a two-way price (bid price and ask price)
- The customer will accept one of the two prices.
- The system then confirms the trade under normal market conditions.
Whether you are dealing with Zara MT or any other firm, check if they are providing two prices for the deal. If any firm is not doing so then it might be taking advantage of its customer’s ignorance.
A limit order is an order placed for a certain price. There are two variable involved: price and duration. The trader has to provide the price at which he wishes to trade and also the duration for which he wants he deal to be opened.
Good Till Cancelled (GTC): A GTC order put forward by the trader remains active till the trader wants it to remain active in the market. No dealer in the market can touch the order and hence it is the responsibility of the trader to remember that his order is active.
Good For the day (GFD): The GFD order remain active in the market until the end of the day. As the Forex market is an ongoing market and it keeps going, the time of the end of day must be specified by the trader.
Stop Orders and limit orders are same and here too the trader has two variables to decide on; price and duration. The difference between the two is that the stop orders are used to limit the loss potential whereas the limit orders are used to enter the market. GTC and GFD are the same variations that are used to place stop orders.