Independently Administered Segregated Client Accounts... STP-Straight Thru Processing... And More...
You can sleep well when you trade with FXPRIMUS... 
 

Luke 6:38 - give, and it shall be given unto you...

Inspiring Videos

What is FOREX?

Welcome to the fascinating world of Foreign Exchange trading. If you have been involved in the investment world, you have probably heard the term Forex thrown around, but what exactly is Forex?
 
Forex

Forex is a term which stands for foreign exchange, also referred to as “Spot FX”, “Retail FX”, “FX” or “4X”. In the simplest of definitions, it is buying and selling two nations currencies at the same time. Hence the term currency trading, it is a continuous physical occurrence taking place in the global economic system. With the daily average turnover of approximately US$4.0 Trillion, it is the largest financial market in the world. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you will easily realize how enormous the Foreign Exchange really is. It actually equates to more than 3 times the total amount of the New York Stock Exchange and the NASDAQ combined!  
Interbank Market / Over-The-Counter

Unlike stock and futures markets, FX trading is not centralized on any one exchange. It is considered to be an Over-the-Counter (OTC), or 'Inter-bank,' market. This is because transactions are conducted between two counterparts over the telephone, or via an electronic network.
Participants in Forex trading

Inter-bank market means that it was dominated by banks up until recently – i.e., central banks, commercial banks, investment banks, etc. However, thanks to market makers brokers, other market players then entered the market in record numbers. They include international money brokers, large multinational corporations, registered dealers, global money managers, private speculators, and futures and options traders.
A 24-Hours Market

There is no waiting for the opening bell daily. It is 24-hours market from Monday morning to Saturday morning SST (Singapore Standard Time). The Forex market never sleeps except weekend. That is why recently many part time individual traders involve in Forex trading in their own base.
The Factors that affect the currency price

Currency prices are affected by a variety of economic and political conditions – most importantly inflation, interest rates, large market orders, and political climate. Furthermore, one nation governments sometimes enter the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency to lower its price, or conversely by buying it to give it a boost. This is commonly called “central bank intervention.” Any of these factors can cause volatile currency prices. However, the sheer size and volume of the Forex market makes it virtually impossible for any one entity to "influence" the market for any length of time.

The Majors Currencies

The most commonly traded are those that are 'liquid' – i.e., those of countries with stable governments, low inflation, and respected central banks. Over 85% of all trading activity revolves around the major currencies – i.e., the U.S. Dollar, Euro, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar, the Australian Dollar and the New Zealand Dollar. Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency. The most popular currencies along with their symbols are shown below:

The Exchange Rate

The base currency is the term for the first currency in the pair. The counter currency is the term for the second currency in the pair. The exchange rate represents the number of units of the counter currency that one unit of the base currency can purchase. In a foreign exchange trade, clients are speculating on the exchange rate between two currencies. The exchange rate measures the relative value of a currency-- meaning it measures how much one currency is worth in terms of another currency.
Price Interest Points (P.I.P.)

A pip is the unit of measurement for exchange rate movement. The number of pips a currency pair moves determines how much a trader will earn or lose on the position. A pip is the fourth significant digit after decimal point in an exchange rate, and is the term used to define the unit of measurement for exchange rate movements. The number of pips that the exchange rate moves dictates how much a trader has gained or lost through an FX trade.
Spreads

You will notice that there are always 2 prices for each currency pair. In Forex, there is a BID and ASK price
The “Bid” is the price at which a dealer is willing to buy and clients can sell the base currency in exchange for the counter currency.
The “Ask” is the price at which a dealer is willing to sell and a client can buy.

BID = the price at which the trader (You) Can sell
ASK = the price at which the trader (You) Can buy
Margins

In Forex, only a small percentage of the actual position value needs to be deposited prior to entering the trade. This small deposit, known as the margin, is not a down payment, but rather a performance bond or good faith deposit to ensure against trading losses. The margin requirement allows traders to hold positions much larger than their account value. Margin requirements are as low as 1%.
Leverage

In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on.
Long Position and Short Position

A long position is one in which a trader buys a currency at one price and aims to sell it later at a higher price. In this scenario, the investor benefits from a rising market.
A short position is one in which the trader sells a currency in anticipation that it will depreciate. In this scenario, the investor benefits from a declining market.

However, it is important to remember that every Forex position requires an investor to go long in one currency and short the other.
An Intraday Position and Overnight Position

Intraday positions are all positions opened anytime during the 24 hour period after the close of normal trading hours at 4:30a.m. SST. Overnight positions are positions that are still on at the end of normal trading hours (4:30a.m. SST). Which are automatically rolled at competitive rates (based on the currencies interest rate differentials) to the next day's price.

FXPrimus Order Types:

What is a market order?

A market order is a commitment to the brokerage company to buy or sell a security at the current price. Execution of this order results in opening of a trade position. Securities are bought at ASK price and sold at BID price.

For example, if EUR/USD is priced at [BID]1.3000/1.3003[ASK]. It means in order to buy 1 unit of euro, you need to pay 1.3003 US dollar. 1.3003 is also the known as the ask price. It's the price that dealer willing to sell. Conversely, if you would like to sell euro against US dollar, you would sell at 1.3000. It's also known as the bid price, meaning it is the price that dealer willing to buy from you.

As you see in the example above, there's a difference between the bid and ask price. This difference is known as spread and varies depending on the currency pair being quoted. For our fixed and variable spreads, FXPRIMUS does not charge a commission, as we are compensated on a percentage of the bid and ask spreads. In this case, if you enter a buy euro position, you are instantly down 3 pips. Therefore, you must wait for the price to come up to [BID] 1.3003/1.3006[ASK] in order to break even.

Stop Loss and Take Profit orders (described below) can be attached to a market order. Execution mode of market orders depends on the security traded.

What is a Stop Loss order?

A Stop Loss order is used for minimizing losses if the security price has started to move in an unprofitable direction. If the security price reaches this level, the position will be closed automatically. Such orders are always connected to an open position or a pending order. The brokerage company can place them only together with a market or a pending order. The client’s terminal checks long positions with BID price to meet this order provision, and the terminal uses ASK price for short positions.

For example, EUR/USD is trading at 1.3000/1.3003. You enter a market order to buy the Euro at 1.3000. To assist in risk management, you can preset a close price (Stop Loss order) where your position is automatically closed at that price. If you set your Stop Loss at 1.1950, when the EUR/USD price reaches 1.2950/1.2953, you are taken out of the market will a loss of 53 pips. 1.3003 [entry price] -1.2950 [close price] = 0.0053. Please note: a Stop Loss price is not guaranteed, as no orders are. During volatile market times, your stop order may not be able to be honored at the exact price desired, and you will receive the next best executable price.

To automate a Stop Loss order so that it follows the price, you can use a Trailing Stop

What is a Trailing Stop?

As noted above, a Stop Loss is intended to minimize losses when the security price moves in an unprofitable direction. Conversely, if the position becomes profitable, a Stop Loss can be manually shifted to a break-even level. To automate this process, the Trailing Stop was created. This tool is especially useful when the price changes strongly in the same direction or when it is impossible to watch the market continuously.

A Trailing Stop is always attached to an open position and works in the client’s terminal, and not on the server like a Stop Loss. As soon as profit in points becomes equal to or greater than the specified level, the Trailing Stop automatically gives a command to place a Stop Loss order. The order level is set at the specified distance from the current price. Further, if price changes in a more profitable direction, the Trailing Stop will make the Stop Loss level follow the price automatically. However, if the profitability of the position falls, the order will not be modified any more. Thus, the profit of the trade position is fixed automatically.

How can I put Trailing Stops in my trades?

Trailing Stops work similarly to how Expert Advisors (EA) operate in that these features work locally on your MT4 platform on your PC. We do not have support capabilities to run these features on our servers because these tools are not attached to our server.

A Trailing Stop is a feature that allows a trader to minimize their risk and protect their profit. This feature is very useful when you want to modify your Stop Loss order in a rapid manner. However, please bear in mind that you must closely monitor your Trailing Stops because if for any reason your MT4 terminal loses its connection (i.e., update, Internet connectivity), the Trailing Stop feature will be disabled because it is not attached to our servers. Therefore we cannot assume responsibility for Trailing Stops that fail due to connectivity or platform issues.

What is a Limit order (Take Profit)?

A Take Profit order is intended for realizing a profit when the security price has reached a preset level. Execution of this order results in closing of the position. It is always connected to an open position or a pending order. The order can be requested only together with a market order or a pending order.

For example, EUR/USD is trading at 1.3000/1.3003. You enter a market order to buy the Euro at 1.3000. To assist in risk management, you can preset a limit order (Take Profit) where your position is automatically closed at that price. If you set your limit at 1.3050, when EUR/USD price reaches 1.3050/1.3053, you are taken out of the market with a profit of 50 pips. 1.3050 [close price] -1.3003 [entry price] = 0.0047.

What is a pending order?

A pending order is the client's commitment to the brokerage company to buy or sell a security at a pre-defined price in the future. These type of orders are used for opening of a trade position provided the future quotes reach the pre-defined level. There are four types of pending orders available:

Buy Limit (placed below the Market price) - buy provided the future "ASK" price is equal to the pre-defined value. The current price level is higher than the value of the placed order. Orders of this type are usually placed in anticipation of the security price, having fallen to a certain level, will increase;

Buy Stop (placed above the Market price) - buy provided the future "ASK" price is equal to the pre-defined value.
The current price level is lower than the value of the placed order. Orders of this type are usually placed in anticipation of the security price, having reached a certain level, will keep on increasing;

Sell Limit (placed above the Market price) - sell provided the future "BID" price is equal to the pre-defined value.
The current price level is lower than the value of the placed order. Orders of this type are usually placed in anticipation of the security price, having increased to a certain level, will fall;

Sell Stop (placed below the Market price) - sell provided the future "BID" price is equal to the pre-defined value.
The current price level is higher than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on falling.

Why FOREX?

Why Day Trade?

Sign up for your FREE Paypal account