Margin is essentially the amount of your trading account balance that must be secured as collateral in order to guarantee your open positions. Margin is usually presented as a percentage and is related to leverage in that the more leverage you employ, the less money you need to post as margin. For instance a 2% margin requirement is the equivalent of using 1:50 leverage, a 1% margin requirement is the equivalent of using 1:100 leverage, and so on.
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Market depth is a term used to describe how large an asset’s order book is. In other words, how many buy and sell limit orders are available for execution as well as how much volume these orders represent. A deep market is one that can handle a great influx of either buy or sell market orders without the price moving substantially in any direction
A market maker is simply any kind of brokerage business that brings buyers and sellers together, facilitating the execution of transactions between them. The term has been done a disservice in recent years by online FX brokers who have sought to convince their clients that all their trades are sent on to the interbank market and that none are internalized.
A market order is simply an order that is executed at the current market price, the moment you decide to buy or sell.
A micro-lot is one hundredth of a lot, which in FX trading equals to 1000 units of the base currency in question. Micro-lots have been introduced to make the trading of CFDs more accessible, especially for those who prefer to trade smaller volumes.
A mini lot is one tenth of a lot, which in FX trading equals to 10,000 units of the base currency in question.
Momentum is the rate at which an underlying asset’s price changes, either in an upward or downward direction. Once an asset begins to gather momentum it is considered increasingly likely that it will continue to move in the same direction. In technical analysis, indicators of momentum are called oscillators and are used to indicate emerging trends.
Minimum bid rate is the main refinancing rate set by European Central Bank (ECB). The Minimum Bid Rate is important to currency traders because interest rates are central to currency valuation. For this reason, Minimum bid rate announcements tend to be highly anticipated by the market as well as the ECB press conference which occur 45 minutes later. These events generate a great deal of market volatility.
A Micro lot is a hundredth of a lot and represents 1,000 units of the base currency in a pair.
In MT4’s order execution window you can choose to set a maximum deviation pip-range for your orders. Maximum deviation allows you to specify a pip-range that is acceptable to you in the event that your order cannot be filled at the requested price. In other words, checking the maximum deviation box and setting it to two pips indicates that you are willing to accept a price that deviates 2 pips above or below the requested price. In this way you can reduce the number of rejected orders, which is especially helpful at times of high market volatility. When the maximum deviation box is left unchecked, your order will only be executed if it is available at the exact price you requested. Otherwise, the order will be rejected.
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Leveraged trading in forex, derivatives, precious metals, CFDs or other off-exchange products on margin carries a high level of risk to your capital. You do not own, or have any rights to, the underlying assets. Trading is not suitable for everyone and may result in losses greater than your deposits. You should only trade with money you can afford to lose. Past performance is no guarantee of future performance and tax laws may be subject to change. 31FX is not a financial advisor and all services are provided on an execution only basis. Please consider our Risk Disclosure Statement and legal documentation to ensure that you fully understand the risks involved in light of your personal circumstances before you decide whether to acquire our services. We encourage you to seek independent advice if necessary. 31FX is a registered brand name of JRV Market Ltd with registered address, 3rd Floor J&C Building, PO BOX 362, Road Town, Tortola, BVI VG1110