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 What is an Exchange Rate?
As in other markets, the interaction of sellers and buyers (supply and demand) establishes the market price of a currency. The market price of a currency is its exchange rate, the price of one currency expressed in terms of another currency.
Any foreign exchange transaction involves the purchase and sale of two currencies. An exchange rate is interpreted as the price of one currency in terms of another, as well as the reverse. When you buy currency A against currency B, you also sell currency B against currency A. Let’s say, for example, that the US dollar/euro exchange rate is at 1.05, that is, one dollar is worth 1.05 Euros. This means that for every dollar sold, you can buy 1.05 Euros. The reverse is also true: 1.05 Euros buys one dollar.
What are the Most Commonly Traded Currencies in the Forex Markets?
US DOLLAR (USD), EURO (EUR), POUND (GBP), YEN (JPY), SWISS FRANK (CHF), AUSTRALIAN DOLLAR (AUD), CANADIAN DOLLAR (CAD)
Who are the Participants in the Forex Market?
Banks – Central, commercial and investment Banks
Large Multinational Corporations
Global Money Managers
Registered Dealers
International Money Brokers,
Futures and Options Traders,
Private Speculators.
Where is the Central Location of the Forex Market?
Forex Trading is not centralized on an exchange, as with the stock and futures markets. The Forex market is considered an Over the Counter (OTC) market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.
When is the Forex Market Open for Trading?
The FOREX opens approximately 7:00 pm EST on Sunday evening and closes Friday at 4:00 pm EST
Every 24 Hours there are 3 trading sessions
- Asia opens at 7:00 pm-6:00 am EST
- Europe opens at 2:00 am-11:00 am EST
- US opens at 8:0 0 am-5:00 pm EST
What is a Margin System?
You can enjoy the benefits of leverage on contracts up to two hundred times your margin deposit. That is, with 2% of the absolute value of NTWO CAPITAL MARKET contracts, you can enter the largest marketplace in the world. As long as you are able to maintain your margin requirements on the full contract value, you can remain indefinitely in the market.
How can I learn how to trade or to be a trader in Forex?
In order to gain a practical understanding of foreign exchange trading, there is no better way than to open a demo account, where you can experience what it's like to trade the Forex market without risking any capital.
How can I open a free demo account?
By visiting our website http://www.n2markets.com, downloading and installing N2Trader software on your computer. You have to open a demo account by filling up details in opening account option and amount of capital you like to start; you will receive a computer generated account number with password.
How can I execute my trading (Open Position) in demo account after I have installed N2Trader software and opened Demo account?
Once you have opened account you are able to see charts and prices of all currencies in market watch column, where then you can double click on a particular currency, for example EUR/USD, an ORDER window will open, where you either Buy or sell in that particular time and select volume of your trade which is in Lots. 1 lot = $100,000 USD
Can I execute trade without using computer or any internet online connection?
Yes, you can trade without using computer or any other online connection, manual trading which is confirming or trading by telephone call to NTWO Capital Markets 24 hrs customer support center.
How can I close position once I have opened it?
For closing a position, go to the trade section in the Terminal, double click on the position you wish to close, a window will open, click on the CLOSE icon to close the position.
P.S: Do not click on SELL, for closing BUY positions, this will not close your position, in fact it will open another position for you, which is the opposite of the existing one.
Can I limit my loss and profit to some extent once I have opened a certain position?
Yes, you can limit loss by defining stop loss while opening a position and limit for profit order, When either the limit or stop order is executed, it will cancel the other order. In other words you can set it and forget it.
Why I can be a Seller first in Forex while in other businesses you have to be buyer first?
This is because daily average turnover of approximately US$1.9 Trillion is traded, which means unlimited buyers & sellers.
What is the difference between the FOREX and the Stock Market?
Stock Market
Traders buy and sell stocks
Over 40,000 stocks
Limited buyers and sellers
Some stocks are hard to get rid of
Only trade during day work hours
Forex Market
Traders buy and sell Currencies
6 major world Currencies (focus)
Unlimited buyers and sellers
Easy to get rid of cash, everyone wants it
You can trade 24 hours
What is the difference between opening an account in Currency trading and Stock trading?
Stock trading
Establish a relationship with a Broker and deposit money into a Trading Account
If you want leverage 2-1 or 4-1 you must be approved with credit
You must pay all margin calls
Currency trading
Establish a relationship with a FOREX Market Maker Broker and deposit money into a Margin Account
You do not need credit to trade on margin
What is a chart and how it helps us in forex?
Charts are graphs and interpret historical data used to find trends and predict future movements; Technical Traders use charts all the time.
How many types of charts are there?
There are only 5 types of charts, Line chart, Dot chart, Forest chart, Bar chart and Candle stick chart.
What is Time scale? What are the time periods?
Time scale is the period time in charts, the times are 1 Minute, 5 Minutes, 15 Minutes, 30 Minutes, 1 Hour, 4 Hour, 1 Day, 1 Week and Monthly.
What is a Margin?
Margin is essentially collateral for a position. If the market moves against a customer's position, NTWO CAPITAL MARKET will request additional funds through a "margin call." If there are insufficient available funds, NTWO CAPITAL MARKET will immediately close out the customer's open positions.
What is leverage?
Also called margin. The ratio of the amount used in a transaction to the required security deposit. The ability to use a small amount of money to control a large trading position.
How leverage is calculated in trade?
For example you would like to ‘BUY’ 1 Lot of EUR/USD at 1.2123, then 100,000 x 1.2123 / 200 = $606.15 is the money required in your account to execute 1 Lot of EUR/USD.
What is the minimum trade I can do?
The minimum executable trade is 0.01 Lot = $1,000 USD in a particular currency.
How much is the commission charged on every trade I do?
0% commission is charged on the trades you do.
What is a spread?
Spread is the value difference between Buy and Sell, For example EUR/USD Buy (BID) is 1.1958 and Sell (ASK) is 1.1962, the difference is 4 pips.
What is BID and ASK?
Buyers are buying and bidding at a lower price, the lower price is called the BID. Sellers are selling and asking for a high price, the higher price is called (ASK).
What is Pip and how it is accumulated?
The smallest unit of price for any foreign currency. Digits added to or subtracted from the fourth decimal place, i.e. 0.0001. Also called Points. Every Pip in every 1 lot = $100,000 USD trade is approximately $10 USD.
How can I be a successful trader?
The best way to be a successful trader is MENTORSHIP, working with a mentor and getting the proper education on how the market works you then will learn where to get in and why, where to get out and why.
What kind of Trading Strategy Should I Use?
Currency traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumor. 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.
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.
Is there any interest will be charged of any long term position opened?
No, this is because in Islam religion it is illegal to have interest charges, but other Forex market maker they do have Interest charges.
How can I withdraw the profit I have made from my trading account in NTWO Capital Market?
There is a request form provided by NTWO Capital market (available for download), which has to be filled out, within 48 hours the requested amount will be credited to your local bank account by wire transfer.
What are the charges for withdrawing from my account?
There are no charges for withdrawing account, only telegraphic transfer charges will be applicable and the currency exchange if your N2CM account and bank account currencies are not the same.
Do I need to maintain a minimum balance for keeping the account active?
No, you do not need to maintain any minimum balance for keeping your account active.
Is there any monthly service charge for trading and using N2CM software?
No, there is no monthly service charge at all.
How does NTWO Capital Market make profit, as there are no commissions charged?
NTWO Capital Market makes profit in the spread which is between 3-9 Pips, from which 2-3 pips is for the bank and the rest is NTWO Capital Market's profit.
What are Indicators?
Indicators are calculated by using mathematical algorithms and are used to represent different characteristics such as overbought/oversold, trending or underlying price direction.
How many Indicators are there? Are they accurate?
There are above 100 indicators ready to use on N2trader, No indicator is 100% accurate, but they are helpful as they give indications.
What is Oscillator?
An oscillator is a technical indicator for which the value ranges between zero to 100, -100 to 100, or vacillates around a central zero line. They are most often used to identify overbought and oversold price regions, but can assist in identifying the direction and strength of trends.
What is moving average?
Moving Average - A series of averaged price data plotted on a currency chart. This technical indicator makes it easier to see the general direction of a trend underlying market action. Moving Average Convergence Divergence - see MACD
What is MQL? What are the benefits?
MQL is a computer language similar to C++ language structure; used in N2trader.
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