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.
