Forex Trading Cost of Carry & Spread

Rollover / Swap / Interest Policy

At 5:00 PM USA EST, funds are subtracted or added to accounts with open positions because of the automatic rollover. On MoneyForex Trader trading platform, the rollover interest is shown on the Dealing Rates window; represented with RlvS - Rollover for Sell position and RlvB - Rollover for Buy position.

Note: On Wednesdays, the amount added or subtracted to an account as a result of rolling over a position tends to be around three times the usual amount. This "3-day" rollover accounts for settlement of trades through the weekend period.

Why does Rollover take place?

In the spot forex market, trades must be settled in two business days. If a trader sells 10,000 euros on Tuesday, the trader must deliver 10,000 euros on Thursday, unless the position is rolled over. As a service to our traders, MoneyForex automatically rolls over all open positions to the next settlement date at 5:00 PM USA EST. Rollover involves exchanging the position being held for a position expiring the following settlement date. The positions being exchanged are usually not valued at the same price. The amount of the difference varies greatly based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day with the movement of prices.

Rollover interest can provide an added stream of profit or loss to a client. As an example, a trader that believes the Great Britain Pound's exchange rate will stay roughly equal to the Japanese Yen's for the next year, will buy the GBP/JPY pair since the Pound has a higher interest rate and will accrue rollover interest. An account would be credited around $10 a day* for a standard GBP/JPY lot. If this trader's prediction comes true and the exchange rate is the same a year later, with fluctuations in between**, they would earn a year's worth of interest on the position. Since there are around 365 interest bearing days in a year, that one standard lot of GPY/JPY could potentially earn $3650 (365 � $10).***

* This rollover rate for the GBP/JPY is indicative of the rate on January 8th, 2007. (The actual rate for long GBP/JPY on that date is $14.12)
** This example assumes the position does not receive a margin call during these fluctuations.
*** The amount here assumes that the interest rate differential between the British Pound and Japanese Yen did not change through the year.

Mini Forex Trading

The MONEYFOREX Mini account was designed for those who are new to the forex market. The Mini forex account trades in smaller contract sizes of 10,000 units, which is 1/10th the size of the standard account. The smaller trade size gives traders the opportunity to trade live with less overall risk or exposure to the market. In addition, the Mini account allows traders to become familiar with MONEYFOREX, more specifically the quality and reliability of MONEYFOREX dealing practices and the stability of the MoneyForex Trader Trading Platform.

important of Trading Strategy

Many traders will hold on to losses hoping it will reverse eventually, only to see the loss get progressively larger. The trading decisions are based on emotional reactions to fluctuating profits and losses, a common pitfall for new traders.

Because the pip value on the Mini Account is just $1 per pip, traders can focus on developing a disciplined trading strategy, basing decisions on pip movement and market conditions NOT P/L.

For Example: When trading a MONEYFOREX Mini account, a 50-pip floating loss is approximately $50. That same 50-pip move against you on the Standard Account now becomes a $500 floating loss. By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Generating larger losses on the Standard Account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss

Start Small with 10,000 units

There is NO MAXIMUM trade volume on the MONEYFOREX Mini forex account. The standard default trade size in the platform is 100,000 units which equivalent to one standard lot. Therefore, for mini lot you need to adjust it to 0.1 lot in order to place 10,000 units. For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more experienced and build up confidence you can slowly increase the size of your positions to maximize profits. In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade enables better risk and account management. To place trade for mini lot, please change the lot amount setting to 0.1.The current default setting is 1 standard lot. The default setting located in the Total Account(s) Equity Window under "DA".

Ideal for Beginners

MONEYFOREX recommends that all traders with account balances less than $10,000 trade a Mini account. This gives you more staying power in the market, and the ability to take advantage of multiple opportunities without over-leveraging your account. Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.

MoneyFOREX

MoneyForex is a unique commision free online forex trading system that allows you engage in trading on the world forex market. Using our forex trading system for foreign currency trading helps you keep up with the fast paced forex exchange.

As a premiere forex broker, MoneyForex offers global forex trading with all major currencies and cross rates. We also offer free real-time forex exchange rates, forex news, market forecasts and forex charts. We invite you to try our free online forex trading system demo. With our forex trading system, you can gain control over a desirable level of your risks and profits.

When you try online forex trading, using our forex charts with a demo-account, you'll see how MoneyForex is one of the world's leading online currency and forex broker, offering low pips and commission-free forex dealing.

Our dealing software which specialized in forex trading is rated second to none for it user friendly environment. Lightning speed and efficient execution is one of its many benefits.

A Short Introduction To FOREX - Currency Trading

FOREX is the world's largest and most liquid trading market. Many consider FOREX as the best home business you can ever venture in. Even though regular people have had the opportunity to take part in trading foreign currencies for profit (in the same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings. Even though it has been somewhat of a loosely guarded secret, every day more and more investors are turning to the all-electronic world of FOREX trading for income and profit because of its numerous benefits & advantages over traditional trading vehicles, like stocks, bonds and commodities. But, still, whenever something seems new or is just becoming a part of social conversation, news articles, and water cooler gossip, misconceptions have to be overcome, the mind has to be open and the slate has to be clear for starting out fresh with the CORRECT information.

TRADITIONAL ACCSESS

raditionally, access to the Forex market has been made available only to banks, funds and other large financial institutions. However, with advances in technology over the years along with the industry's high leverage options, the Forex market is now available to money managers and individual retail Forex traders.

With some initial capital (as low as $25 with M 5 Forex), and a computer with an internet connection or cell phone with web access, you can become a participant in this global and liquid financial market. The Forex market is truly the most developed market in the world.

You can test the market with a trading account that does not involve large amounts money (as little as $25).

FOREX BASICS

Whether or not you are aware of it, you already play a role in currency trading. The simple fact that you have money in your pocket makes you an investor in a nation's currency. By holding US Dollars, for example, you have elected not to hold the currencies of other nations. When a currency is traded, the transaction is carried out on the Foreign Exchange market (also referred to as the Forex or FX market). The Forex market is the largest, most developed financial market in the world, with over $2 trillion changing hands every day!
Unlike other financial markets that operate at a centralized location (i.e., the stock exchange), the worldwide Forex market does not have a central location. It is a global electronic network of banks, financial institutions and individual Forex traders, all involved in the buying and selling of national currencies. A major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

TIPS FOR FOREX

Like everyone else has said you need to take your time when deciding to trade the Forex market. That being said, if you are willing to learn how to trade it properly and are patient you can make money even with a small ($5000) account.

You will need to set strict money management rules, that is how much to place on each trade, how much you are willing to lose on each trade and how much profit you are happy to take on each trade.

Greed can do funny things and a winning trade can end up a loosing trade.

Follow these 10 steps

1. Get access to and read as much free information as possible

2. Download free Forex Charts

3. Take some Forex courses

4. Test and trial a couple of different forex strategies to determine which is best for your personality. Don’t rush this stage as you will really get to know yourself, how you react to loss, greed, fear and you will come to an understanding of how much time you really want to commit to your trading.

5. Open a demo account with an online forex broker, and start with a conservative amount in your account between $5000 and $10,000.

6. Simulator trade for between about 3 months

7. Open a Mini-Forex Account and fund with a conservative amount of money, between $300 - $2000.

8. Build your confidence by taking small amounts from the market consistently.

9. Throughout this whole process develop a trading plan that will consist of
a. What size your real trading account will be
b. How much you will trade each time
c. What timeframes you will trade
d. How much you will risk each trade

10. Trading for Real - Start trading a real account and continue to monitor and track your progress, recognising that you are a continual learner.

Currency Pairs

24-hour trading is available in 31 currency pairs: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY, AUD/JPY, CHF/JPY, EUR/AUD, GBP/CHF, NZD/USD, NZD/JPY, EUR/CAD, CAD/JPY, AUD/NZD, AUD/CAD, GBP/CAD, GBP/AUD, EUR/NZD, GBP/NZD, AUD/CHF, NZD/CHF, NZD/CAD, CAD/CHF, USD/HKD, USD/SGD, SGD/JPY.

Dealing Spread

At FOREX.com, you can trade on dealing spreads as low as 1-2 pips on the most widely traded currency pairs. And with our fractional pip pricing, you gain an extra digit of precision so that you can take advantage of smaller price movements.

For clients who trade news events, we also offer fixed spread pricing. With this option, bid/offer spreads remain fixed 100% of the time under all market conditions - which includes times of high market volatility, before and after major economic releases, and following other important news and events

Trading Minimums

• Mini Accounts:
  Minimum transaction size for mini accounts is 1/10th standard sized lot, or 10,000 of the base currency, with a minimum margin deposit of 0.5% (200:1 leverage). For example, a US$10,000 position would require an initial margin deposit of US$50.
  
  
• Standard Accounts:
  Minimum transaction size for standard accounts is 1 lot, or 100,000 of the base currency, with a minimum margin deposit of 1% (100:1 leverage). For example, a US$100,000 position would require an initial margin deposit of US$1,000.

Phone Trading

Live clients may trade over the telephone 24 hours a day, from Sunday at 5:00pm ET through Friday at 5:00pm ET. When trading via phone, our dealers will quote the same tight spreads available via the dealing platform. All trades executed via the phone are subject to a pre-deal margin availability check and will be manually entered into the customer's account for integrated P&L analysis and reporting. All telephone calls are recorded for the safety of both parties.

Trading over the Internet

Executing a deal with FOREX.com via the Internet is a simple two-step process. Simply enter the number of lots and then click on the bid (buy) or offer (sell) for the currency pair you wish to trade - your deal is automatically executed. The dealing software automatically calculates the initial margin requirement based upon the notional amount of the deal, and if sufficient funds are available in your account, will accept the transaction. Deals are confirmed online, normally within one second, and the system instantaneously updates both your open position and calculates your current P&L.

About Online Forex - Currency Trading

Q1: When you consider that the foreign exchange market has become the world's largest financial market, with over $1.5 trillion USD traded daily, where does it go from here? A1:The FX market is unique, in the UK there is no central exchange, we trade via the inter bank market. With more and more private individuals taking up margin trading and new forex brokers setting up, I can only see the market grow in the near future. Q2: Other than great liquidity, what are the principal benefits attached to the forex market? A2: There is less to consider when trading the forex markets, there are only a number of variables that affect the pricing. Main advantages include Forex Market allows 24 hour trading Greater leverage - with most brokers offering 100 - 1, Less starting capital required, More Liquidity - day trading has to have enough volume to make it worth our while. The currency market is more liquid than all the world stock markets put together. Currencies are always in action,

What are the Secrets of Super Traders?

And here they are? * Skilled traders find a strategy or market pattern that offers a high probability for success. They make money by exploiting this edge over and over again. * Skilled traders never deviate from their methodology or "wing it". * Skilled traders never enter a trade without a entry and exit strategy. They know exactly when and where to cut their losses as well as taking profits. * Skilled traders never ever let a winning trade turn into a losing one. The easiest way to ensure that this doesn't happen is to place a protective stop at or a few ticks in the money once your position is up several points. * Skilled traders never hope, pray or wish that their stock would go up. They understand that when they are wrong they are wrong and the best thing to do is cut their losses short. * Skilled traders never trade with their emotions. They don't allow themselves to get caught up in the latest and greatest investment hype. * Skilled traders always have one goal in mind: To preserve their capital at all costs. They do this by never taking on too large of a position. A good rule of thumb to adhere to is never use more than 5% of your funds on any one trade. This way in the worst-case scenario the stock could drop to zero and your account would not be severely affected. * Skilled traders never get too greedy. There is an old saying that "Pigs gets fed and hogs get slaughtered". These traders don't try to make one big trade that will turn them into instant millionaires. They don't try to hit home runs, instead they understand that it is better to keep hitting singles and making smaller consistent profits. * Skilled traders enter and exit trades swiftly and decisively. * Skilled traders listen to no one else's opinion concerning the market or particular trade they are in. * Skilled traders are often contrarians. They will be buying when others are too scared to and sell when the crowd starts buying. That's it, the secrets to making big money in the markets. Perhaps that is a bit of a let down as you were hoping for something a bit more esoteric and complicated. Let me assure you that if you follow the above principles that you will take your trading skills and profits to a level that you never thought possible!

What are the Secrets of Super Traders?

The first and perhaps most important "secret" is to realize that your methodology or approach (no matter how good) is only part of being a highly successful trader. This applies to any trading style including, day trading, swing trading or position trading. The simple fact is that a bad trader can screw up a fantastic trading system. Conversely a talented trader can take a mediocre strategy and make money with it. Why? Please read on and I will explain. Many traders/investors that I have talked with think that to be a "Super-Trader" that they must possess some type of highly advanced trading techniques or software along with nerves of steel and a highly developed intuitive feel for the markets. In addition they think that these elite group, have some "inside information" that they don't. You will be relieved to know that the above is not necessary. There are actually only a few things that separate traders who consistently make money and those who don't.