GuidetoOnlineForexTrading

StartTradingandMakingMoneyinForex

WinTraderandMetaTrader

IfthisisyourfirsttimecomingacrosstheonlineForexmarket,thenyouhavecometotherightplace!
ThisguidewillprovideyouwiththebasicknowledgeandtoolsandtechniquesanoviceForextrader
shouldhaveasyoutakeyourfirststepsinthefascinatingworldofForex
GuidetoOnlineForexTrading

Index
Usethefollowingindextonavigateyourwayaroundtheguide.
Introduction:WhyForex? 3
Profitability 4
CashinginonPriceMovements 5
TheTrendisYourFriend 7
UseofLeverage 10
AsimpleTradeExample 11
HedgingRisksandRewards 12
TheQuestforVolatility 13
MoneyManagement 14
GlossaryofTerms 17

GuidetoOnlineForexTrading

Introduction:WhyForex?
Ifyouarereadingthisguide,youhavemostlikelytakensomesortofinterestintheForexmarket.But
whatdoestheForexmarkethavetoofferyou?
AccessibilityItsnowonderthattheForexmarkethasthetradingvolumeof3trillionadayall
anyoneneedstotakepartintheactionisacomputerwithaninternetconnection.
24hourMarketTheForexmarketisopen24hoursaday,sothatyoucanberighttheretrading
wheneveryouhearafinancialscoop.Noneedtobiteyourfingernailswaitingfortheopeningbell.
NarrowFocusUnlikethestockmarket,asmallermarketwithtensofthousandsofstockstochoose
from,theForexmarketrevolvesaroundmoreorlesseightmajorcurrencies.Anarrowchoicemeansno
roomforconfusion,soeventhoughthemarketishuge,itsquiteeasytogetaclearpictureofwhats
happening.
LiquidityTheforeignexchangemarketisthelargestfinancialmarketintheworldwithadaily
turnoverofjustover$3trillion!Nowapartfrombeingareallycoolstatistic,thesheermassivescopeof
theForexmarketisalsooneofitsbiggestadvantages.Theenormousvolumeofdailytradesmakesit
themostliquidmarketintheworld,whichbasicallymeansthatundernormalmarketconditionsyou
canbuyandsellcurrencyasyouplease.Youcanneverbeinajamforcurrencytobuyorstuckwith
currencythatyoucannotunload.
TheMarketcannotbecorneredThecolossalsizeoftheForexmarketalsomakessurethatnoonecan
cornerthemarket.Evenbanksdonothaveenoughpulltoreallycontrolthemarketforalongperiodof
time,whichmakesitagreatplaceforthelittleguytomakeamove.
ClickheretoopenafreeICMpracticeaccountandjointheForexmarkettoday!

GuidetoOnlineForexTrading

Profitability
Itdoesnttakeafinancialgeniustofigureoutthatthebiggestattractionofanymarket,oranyfinancial
ventureforthatmatter,istheopportunityforprofit.IntheForexmarket,profitabilityisexpressedina
numberofways.
Firstofall,justtosettherecordstraight,youdonothavetobeamillionairetotradeForex.Unlikemost
financialmarkets,theForexmarketallowsyoutostarttradingwithrelativelylowinitialcapital.AtICM,
youcanstarttradingForexwithaslittleas$500!
Rightaboutnowyoureprobablyaskingyourself:whatchancedoIhaveofprofitingwithsuchalow
initialinvestment?TheForexmarketdoesnotrequirelargeinitialinvestmentsbecauseitallowsyouto
useleveragedtrading.Leveragedtradingletsyouopenpositionsfortensofthousandsofdollarswhile
investingsumsassmallas$500.ThismeansthatForextradinghastheprofit(andloss)potentialoftens
andevenhundredsofpercentaday!
WhatisalsouniqueabouttheForexmarketisthatanysortofmovementisanopportunitytotrade.
Whetheracurrencyiscrashingorsoaring,thereisalwaysroomforspeculation,sinceyoualwayshave
theoptionofbuyingorsellingthecurrencyofyourchoice.Unlikethestockmarket,youarenotlimited
tospeculatingonrisingstocks,andafallingmarketisjustasgoodforbusinessasarisingmarket.
Havingsaidallthat,itisimportanttorememberthatasprofitableastheForexmarketis,itstillcarries
alltherisksinvolvedwithfinancialtrading.Youshouldalwaysbeawareoftheriskandneverriskmoney
thatyoucannotaffordtolose.

GuidetoOnlineForexTrading

CashinginonPriceMovements
TradingForexisexcitingbusiness.Themarketisalwaysonthemove,andeverytinyshiftincurrency
ratescanmeanprofitsandlossesofhundredsandeventhousandsofdollars!
Letsdemonstratehowthatcanhappen:
Ingeneral,theeightmosttradedcurrenciesontheForexmarketare:
USD USDollar
EUR EuropeanEuro
GBP BritishPound
JPY JapaneseYen
CHF SwissFranc
CAD CanadianDollar
AUD AustralianDollar
NZD NewZealandDollar

Forextradingisalwaysdoneinpairs,sinceanytradeinvolvesthesimultaneousbuyingofacurrencyand
sellingofanothercurrency.Thetradingrevolvesaround14maincurrencypairs.Thesepairsare:
EUR/USD EUR/JPY
GBP/USD EUR/GBP
USD/JPY EUR/CHF
USD/CHF GBP/JPY
USD/CAD GBP/CHF
AUD/USD CHF/JPY
NZD/USD EUR/CAD

Whenbuyingorsellingacurrencypair,eachpairhasitsownBid/Askrate,forexample:

Thismeansyoucouldeither:
SellthepairattheBidrateof1.3961orBuythepairattheAskrateof1.3963

GuidetoOnlineForexTrading

OK,butwherestheopportunityforprofit?
Thecurrencypairratesarevolatileandconstantlychanging.
Onewaytoprofitisbybuyingapair,thensellingitatahigherrate.
Thesecondwayisbysellingthepair,thenbuyingitatalowerrate.
Asyourpositionsbecomeprofitable,youwillseeyouraccountEquityincreaseinrealtimeinboth
WinTraderandMetaTrader.Whenyoucloseaprofitableposition,thegainswillberealizedand
addedtoyouraccountBalanceaswell.

GuidetoOnlineForexTrading

TheTrendisYourFriend
Trendanalysisisbasedontheideathatwhathashappenedinthepastgivestradersanideaofwhatwill
happeninthefuture.Althoughthismayseemprettybasic,beingabletoidentifywhenapairisina
trendandwhenitisntwillhelpyoutoincreaseyourchancestoprofitconsistentlyintheForexmarket.
Whenyoucanidentifyatrend,youcanestimatewhatdirectiontherateofacurrencypairisgoingtogo
in.Youshouldexploitthedirectionofthetrendyouidentifybyplacingatradeinthatdirection.
Ifitisanuptrend,meaningthattherateisincreasing,buyingthecurrencypairwillgiveyouabetter
probabilityforprofit.Ifitisinadowntrend,meaningthattherateisdecreasing,sellingthecurrency
pairwillgiveyouabetterchanceofmakingmoney.
HowdoIidentifyatrend?Whatarethecharacteristicsofatrend?
Thesimplestwaytoidentifyatrendisthroughthedistinctpatternsthatthepriceforms.Thesecantell
youifthemarketismovinginanuptrendordowntrend.
IdentifyingaForexTrend
WhenatrendistakingplaceinaForexpair,thepricemovementsstarttoformpeaksandvalleysinthe
chartofthatpair,whichareeasilyidentified.
Inanuptrend,thepricemovementsformaseriesofhigherpeaksandhighervalleys(HigherHighsand
HigherLows.)Sinceapictureisworthathousandwords,letslookatthefollowingchart:

Thischartsuggeststhatthetradershouldbuythecurrencypair(andclosethetradebysellingataprofit
aftertheraterises).
GuidetoOnlineForexTrading

Inadowntrend,thepricemovementsformaseriesoflowerpeaksandlowervalleys(LowerHighsand
LowerLows):

Thischartsuggeststhatthetradershouldsellthecurrencypair(andclosethetradebybuyingatprofit
aftertheratedeclines)
Itisimportanttonotethatduringsometradingdaysthetrendishardtospot,sometradingdaysshow
notrend(thepricemovementsformaRange),andofcourseyoureboundtorunintotheoccasional
reversal,sothisisnotaperfectlyaccurateor100%reliableindicatorfortrading.
HereiswhatatradingRangelookslike:

GuidetoOnlineForexTrading

Itiseasiertomakepredictionswithatrendthanwithatradingrange.Whileyoucanstillprofitin
tradingranges,youhavetobemorenimbleonyourfeet,andreadytojumpinandoutofthemarketsat
alltimes.Needlesstosay,thismakesthetraderslifealottougherandtheriskforlossgreater.
Tradingrangescanbereallymessyandunpredictable,whichiswhyyoushouldalwayslookfortrading
trends.
Asageneralstrategy,itisbesttotradewiththetrendratherthanagainstit,meaningthatifthegeneral
trendofthemarketisup,youshouldbeverycautiousabouttakinganypositionsthatrelyonthetrend
goingintheoppositedirection.
Thetrendspottingstrategyassumesthatthepresentdirectionofthepriceratewillcontinueintothe
future.Itcanbeusedinthreemaintimeframes:short,intermediateandlongterm,withthetrends
beingdifferentforeach.
Forexample,hereisapossiblescenariointheForexmarket:
Overthelast12monthsthetrendforEUR/USDisanuptrend,overthelast30daysthetrendisa
downtrend,andoverthelast24Hours(intraday)thetrendisanuptrend.
Regardlessofthechosentimeframe,traderswillremainintheirpositionuntiltheybelievethetrend
hasreversed.
Sothegoalistospotatrendthatyoubelieveinandtradeaccordingtoit.Needlesstosay,youwillneed
tomonitorthetrade,incaseyouweremistakenandthetrendvanishesorreverses.Thenitistimeto
cutyourlossesbyclosingthelosingtradeorbyreversingclosingthetradeandopeningafollowing,
oppositetrade.

GuidetoOnlineForexTrading

10

UseofLeverage
IfyouhavebeenatallexposedtotheworldofForex,youhaveprobablyheardthewordLeverage
beingtossedaround.ButwhatexactlyisLeverage?
LeverageisaveryimportantpartofForextrading,anditiscriticalthatyouknowexactlyhowitworks
andhowtouseit.ItisthetermForextradersusetorefertotheratioofinvestedamountrelativetothe
tradesactualvalue.
Forexbrokersusuallyprovidetheircustomerswiththeoptiontotradeonborrowedcapital,sothat
tradersdonothavetoinvesttensofthousandsofdollarsforthechancetomakeanyrealprofit.When
youtradeataleverageof100:1(or100to1),itmeansthatforevery$1thatyouinvestinthemarket,
thebrokerinvests$100foryou.Asaresult,youcancontrolanamountof$50,000byinvesting$500.
ICMprovidestraderswiththeopportunityoftradingatupto400:1leverage.
Itprobablywillnotsurpriseyouwhenwesaythatwithgreateropportunityforprofitcomesgreaterrisk.
Justlikeslightfluctuationsincurrencyratescanmakeyousignificantamountsofmoney,itcanalso
causeyoutoloseyourmoneyveryquickly.Thehighertheleverage,thelargertheprofitthatyoustand
tomakeandthequickeryoumightloseyourinvestment.Aleverageof400:1canmakeyoumore
moneythanaleverageof100:1,butitalsoputsyourinitialinvestmentatmorerisk.
Ifyoutradewithaleverageof100:1,themarketwouldhavetomove100pipsagainstyouforyour
positiontobewipedout.Ontheotherhand,ifyoutradewithaleverageof400:1,themarketwould
onlyhavetomove25pointsagainstyouforyourpositiontobewipedout.
TheRatiobetweenLotSize,TradeSizeandLeverage
ThelotsizeforatradeonICMWinTraderis$10,000.TheadvantageoftradingwithLeverageisthat
yourprofitpotentialisvirtuallyinfinite.AtICM,anylossesarelimitedtotheamountofyourinitial
deposit.Oncetheratedropsbelowtheratecoveredbyyourinvestmentthatis,theUsableMargin
inWinTraderreacheszero,ortheFreeMargininMetaTraderreacheszerothetradeisautomatically
closed.
Remember,Leveragecanbeatradersbestfriendwhenusedcarefully,andhisworstenemywhenused
recklessly.Itisagreattoolforincreasingprofits,infactprivatetradersrarelytradewithoutit.Butyou
shouldalwayskeepinmindthatthehighertheleverageis,thehighertherisklevelis.
Nowthatyouareequippedwithmostofthebasictools,youcanmakeyourfirsttrade!

GuidetoOnlineForexTrading

11

ASimpleTradeExample
Areyouready?Itstimetotrade!
IfyoudonotalreadyhaveanICMWinTraderPracticeAccount,getonenowforfreeat
www.icmtrading.com/free_demo.
YouwillgetaUsernameandPasswordandbepromptedtodownloadthesoftware.Goaheadand
Login.Hereisatodolistofactionstobetakenasyouplaceatrade:
Identifythepairtobuyorsell
Decideontheinitialtradesize(inLots)
ConsiderapplyingStopsorLimits(coveredinthenextchapter)
Openthetrade
Letssaythatafterspendingsomequalitytimelookingatthechartsofseveralcurrencies,youve
concludedthatEUR/USDistrendingup.Nowwhatisthereasonabledecisionbasedonthisconclusion?
ClearlyyoucanprofitbybuyingEUR/USD(buyingEUR/sellingUSD)
ReminderbuyingisdoneattheAskprice,whilesellingisdoneattheBidprice.
Imaginethatyoubought1lotofEUR/USDonyourICMWinTraderaccount.Thedetailsofyourtrade
are:
Marginused:$25
Transactionsize:1lotor10,000Euros[1lotis100,000EurosinMetaTrader,butwelluse
WinTraders10,000lotsizeforthisexample]
Leverage:400:1(10,000/25=400)
EUR/USD(Ask):1.3956
InplainEnglish,whatyouhavejustdoneisbought10,000unitsofEUR/USD,whichatthatspecificrate
represents1.3956USDper1EUR.
Now,letsassumethatattheendoftheday,orpossiblyevenafewminuteslater,theEUR/USDratehas
risento1.4066.Yousellthose10,000Euro/USDUnitsatthenewrateof1.4066andget$110back.
Thismeansthatthisseeminglyinsignificantfluctuationintherateallowsyoutocashin$110onan
initialUsedMarginorinvestmentofonly$25.
Inotherwords,youjustmade708%profitonyourinvestment,thankstothemovementintheexchange
rateandtheuseofleverage.
GuidetoOnlineForexTrading

12

Ontheexampletradethatwehavejustseen,yourrewardwasunlimited,andtheriskwaslimitedto
yourdepositedfunds.
GuidetoOnlineForexTrading

13

HedgingRisksandRewards
Forextradingcanbeariskybusiness.ThischapterwillexplaintheusageofStopLoss(Stop)andLimit
(SometimescalledTakeProfit)orders.Theseareusedforhedgingyourrisksandrewards,realizing
yourprofitsandminimizingyourlosses.
ICMwillautomaticallycloseoutyourtradesatcertainlevelstopreventyoufromlosingmorethanyou
haveinvested(calledaMarginCallorMConyouraccountstatement).Iftherateonyouropen
positiondropsbelowwhatiscoveredbyyourUsedMargin(orinvestment),thepositionis
automaticallyclosedout.Thismeansthatthemaximumamountyoucanloseonatradeisalways
limitedtotheinitialinvestmentofthetrade.
Still,thereisnoreasonwhyyoushouldwaituntilyouloseyourentireinvestmenttoclosethetrade.By
settingaStoporderyoumakesurethatthevalueofyourpositiondoesnotdropbelowacertainlevel.
Thiswayyoucontrolthemaximumamountthatyouarewillingtoloseonatrade,withouthavingto
monitoreachtradearoundtheclock.
Havingsomelosingtradesisinevitableforanytrader.Oneofthemostcriticalkeystosuccessfultrading
istolimitlossesontheselosingtrades,usingStopsandcontrollingrisk.
Limitorders,sometimescalledTakeProfitorT/Paresimilartostoplossorders,onlyreferringto
profits.Limitordersensurethatonceyourtradereachesacertainlevelofprofit,itwillbeclosedand
theprofitlockedin.
Forinstance,imaginethatyouhaveopenedalong(thatis,youbought)EUR/USDtradeattherateof
1.3950.Afterafewhours,theraterisesto1.4050,butanhourlaterdropsto1.3900.WithoutaLimit
order,youmightmisstheriseintherate,andendupwithalossonyourhands.
IfyouhadsetaLimitorder,thepotentialprofitofthetradewouldhavebeenrealized,withoutyour
havingtomonitorthetradearoundtheclock.
Remember,StopandLimitordersareverysimpletoolsthatcanmakethedifferencebetweena
successfultradingcareerandabigholeinyourpocket.Considerusingtheseorderswitheverytrade
thatyoumake.

GuidetoOnlineForexTrading

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TheQuestforVolatility
TheForexmarketisopen24hoursaday,butwhatarethebesttimestomakeaprofit?
EventhoughtheForexmarketisopen24hoursadaywiththeexceptionofweekends,notallhoursare
asequallygoodfortrading.ThereasonthattheForexmarketisopen24hoursadayisthatitismade
upofdifferentsessionsaroundtheglobethatbetweenthemcover24hours.
Themoremarketsareactiveatthesametime,themoretradesarebeingexecuted,andthemoreaction
foryoutocashinon.
TradingSessions(GMTGlobalMarketTime):

SincetheLondonsessionisthebusiestoutofthefour,thebesttimesfortradingare8AM9AM(GMT)
and13PM17PM(GMT),becausethatiswhentheLondonsessionoverlapswithothersessions.
Remembereventhoughyouareabletotrade24hoursaday,itisbettertoplanyourtradingactivity
inordertocatchthebestactionforachancetomaximizeyourprofitsandminimizeyourlosses.

GuidetoOnlineForexTrading

15

MoneyManagement
Isthereasecrettobecomingasuccessfultrader?
Thereisamethodthatallsuccessfultradersuse,anditisnotsecret.Itiscalledmoneymanagement.
Moneymanagementisnotsomevagueindustrylingoitsimplymeanstheknowledgeandskillof
managingyourForextradingaccount.Assimpleasthatmayseem,itisthekeytoalongandsuccessful
tradingcareer.Andyetitisoftenforgottenorneglectedinthethrillofthetrade.Wewouldliketotake
thisopportunitytolayoutsomegroundrulesbywhichyoucaneffectivelymanageyouraccount.
DonotgolookingfortheBigWin;itwillmostlikelyresultinabigloss.Successfultradingmeans
consistenttrading,wheresmallwinsamounttolargelongtermprofits.Neverassumethatallyour
tradeswillbeprofitable,andplanonlosses.
Youshouldonlyriskasmallpercentageofyourtotalaccountbalanceoneachtrade.Thissimply
minimizesyourrisk,sothatevenifyouenduplosingyourentireinvestmentonatrade,itdoesnothave
acriticaleffectonyouraccountbalance.Therecommendedamountis2$ofyouraccountbalanceper
trade.Moreaggressivetradersgoashighas5%,butneverhigherthanthat.Itisaveryimportantrule
tokeep,sincetheloweryouraccountbalancedrops,theharderitistorebuildit.
UsingLimitOrders
LearntousetheStopandLimitorderseffectively.Theseordersprotectyourinvestmentandrealize
yourprofits.Theyareverysimpletoolsthatcanmakeallthedifferencetoyouraccountbalance.
SizeofTrades
Youareadvisedtoopensmalltrades,becauseinthecaseofalosingtrade,youcanthenopenthe
oppositetradewithabiggerinvestmentorhigherleverage,thuscompensatingforlosses.
PracticetradingwithafreeICMpracticeaccount
Useafreepracticeaccounttopracticetrading.ICMoffersafullfeatureddemonstrationversionofa
livetradingaccountwithastartingbalanceofvirtualmoney.Everythingworksexactlythesameasina
Liveaccount,butnorealfundsareatrisk.Werecommendusingthepracticeaccounttogettoknow
theplatformandgainForextradingexperience.
AndevenafteryouhavebeguntradingonaLiveaccount,aPracticeAccountistheperfectplacetotry
outnewtradingstrategies.Thereisnopointinriskingyourmoneytotestoutapossibletheory,when
youcandosowiththesamesuccessminustherisk.Afterseeingthatyourstrategyisconsistently
successfulinaPracticeAccount,youcantryitoutonaLiveaccount.
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Remembermoneymanagementisverysimpletomaster,butnotassimpletokeepup.Onceyouhave
developedthemoneymanagementsystemthatworksforyou,makesuretostickwithitanddonotlet
youremotionsgetinthewayoflongtermprofit,evenifitmeansabsorbingshorttermlosses.
Nowthatyouareequippedfortrading,takeyourtimepracticingyourtradingskills.Whenyouare
readyforrealtrading,gotowww.icmtrading.com/applytoopenaLiveaccountandstartprofitingfrom
theForexmarket!

GuidetoOnlineForexTrading

17

Glossary
Ask:Priceatwhichbroker/dealeriswillingtosell.Sameas"Offer".
Balance:Thevalueofyouraccountnotincludingunrealizedgainsorlossesonopenpositions.
Bid:Priceatwhichbroker/dealeriswillingtobuy.
Bid/AskSpread(or"Spread"):Thedistance,usuallyinpips,betweentheBidandAskprice.Atighter
spreadisbetterforthetrader.
CostofCarry(also"Interest"or"Premium"):Thecost,oftenquotedintermsofdollarsorpipsperday,
ofholdinganopenposition.
CurrencyFutures:Futurescontractstradedonanexchange,mosttypicallytheChicagoMercantile
Exchange("CME").AlwaysquotedintermsofthecurrencyvaluewithrespecttotheUSDollar.
Parametersofthefuturescontractarestandardizedbytheexchange.
Drawdown:Themagnitudeofadeclineinaccountvalue,eitherinpercentageordollarterms,as
measuredfrompeaktosubsequenttrough.Forexample,ifatrader'saccountincreasedinvaluefrom
$10,000to$20,000,thendroppedto$15,000,thenincreasedagainto$25,000,thattraderwouldhave
hadamaximumdrawdownof$5,000(incurredwhentheaccountdeclinedfrom$20,000to$15,000)
eventhoughthattrader'saccountwasneverinalosspositionfrominception.
Equity:Thisrepresentsthecurrentmarketvalueofyouraccount.Equity=Balance+(unrealized
profit/lossonopenpositions).
Forex:Shortfor"ForeignExchange".RefersgenerallytotheForeignExchangetradingindustryand/or
tothecurrenciesthemselves.
FundamentalAnalysis:Macroorstrategicassessmentsofwhereacurrencyshouldbetradingbasedon
anycriteriabutthepriceactionitself.Thesecriteriaoftenincludetheeconomicconditionofthecountry
thatthecurrencyrepresents,monetarypolicy,andother"fundamental"elements.
Leverage:Theamount,expressedasamultiple,bywhichthenotionalamounttradedexceedsthe
marginrequiredtotrade.Forexample,ifthenotionalamounttraded(alsoreferredtoas"lotsize"or
"contractvalue")is$100,000dollarsandtherequiredmarginis$2,000,thetradercantradewith50
timesleverage($100,000/$2,000).
Limit:AlsocalledTakeProfitorT/P.Anordertobuyataspecifiedpricewhenthemarketmoves
downtothatprice,ortosellataspecifiedpricewhenthemarketmovesuptothatprice.
Liquidity:Afunctionofvolumeandactivityinamarket.Itistheefficiencyandcosteffectivenesswith
whichpositionscanbetradedandordersexecuted.Amoreliquidmarketwillprovidemorefrequent
pricequotesatasmallerbid/askspread.
Margin:Theamountoffundsrequiredinaclientsaccountinordertoopenapositionortomaintainan
openposition.Forexample,1%marginmeansthat$1,000offundsondepositarerequiredfora
$100,000position.
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MarginCall:Arequirementbythebrokertodepositmorefundsinordertomaintainanopenposition.
Sometimesa"margincall"meansthatthepositionwhichdoesnothavesufficientfundsondepositwill
simplybeclosedoutbythebroker.Thisprocedureallowstheclienttoavoidfurtherlossesoradebit
accountbalance.
MarketOrder:AnordertobuyatthecurrentAskprice.
Offer:Priceatwhichbroker/dealeriswillingtosell.Sameas"Ask".
Pip:Thesmallestpriceincrementinacurrency.Oftenreferredtoas"ticks"inthefuturesmarkets.For
example,inEURUSD,amovefrom.9015to.9016isonepip.InUSDJPY,amovefrom128.51to128.52is
onepip.
Premium(also"Swap"or"CostofCarry"):Thecost,oftenquotedintermsofdollarsorpipsperday,of
holdinganopenposition.
Rollover:Isthechangingoffutureswhentheyexpiretothenewcontract.
SpotForeignExchange:Oftenreferredtoasthe"interbank"market.Referstocurrenciestraded
betweentwocounterparties,oftenmajorbanks.SpotForeignExchangeisgenerallytradedonmargin
andistheprimarymarketthatthiswebsiteisfocusedon.Generallymoreliquidandwidelytradedthan
currencyfutures,particularlybyinstitutionsandprofessionalmoneymanagers.
Stop:AlsocalledStopLossorS/L.Anordertobuyatthemarketonlywhenthemarketmovesup
toaspecificprice,ortosellatthemarketonlywhenthemarketmovesdowntoaspecificprice.
TechnicalAnalysis:Analysisappliedtothepriceactionofthemarkettodeveloptradingdecisions,
irrespectiveoffundamentalfactors.
Tick:ThesmallestpriceincrementinafuturesorCFDprice.Oftenreferredtoasa"pip"inthecurrency
markets.Forexample,inDownJonesIndustrials,amovefrom8845to8846isonetick.InS&P500,a
movefrom902.50to902.51isonetick.
UsableMargin:Theamountinyouraccountavailableasmarginfornewpositions.UsableMargin=
EquityUsedMargin

UsedMargin:Theamountthatisneededinyouraccountasmarginforopenpositions.Margin
requirementsonICMWinTraderare$25perlot.Forexample,ifyouhave3lotsofopenpositions,your
UsedMarginis3x$25=$75.Notethatmarginisnota"charge"andisnotdeductedfromyouraccount
inanyway.

CURRENCYPAIRS:
Symbol CurrencyPair TradingTerminology
GBPUSD BritishPound/USDollar "Cable"
EURUSD Euro/USDollar "Euro"
USDJPY USDollar/JapaneseYen "DollarYen"
USDCHF USDollar/SwissFranc "DollarSwiss",or"Swissy"
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USDCAD USDollar/CanadianDollar "DollarCanada"

AUDUSD AustralianDollar/USDollar "AussieDollar"
EURGBP Euro/BritishPound "EuroSterling"
EURJPY Euro/JapaneseYen "EuroYen"
EURCHF Euro/SwissFranc "EuroSwiss"
GBPCHF BritishPound/SwissFranc "SterlingSwiss"
GBPJPY BritishPound/JapaneseYen "SterlingYen"
CHFJPY SwissFranc/JapaneseYen "SwissYen"
NZDUZD NewZealandDollar/USDollar "NewZealandDollar"or"Kiwi"
USDZAR USDollar/SouthAfricanRand "DollarZar"or"SouthAfricanRand"
Gold SpotGold(XAU) "Gold"
Silver SpotSilver(XAG) "Silver

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