What is Forex?
Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world's currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion. All the world's combined stock markets don't even come close to this.
The foreign exchange market is the ""place"" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.
Ask Price
Ask price is the price that broker is willing to sell the first named (base) of a currency pair to the client.
Bid Price
Bid price is the price that broker is willing to Buy the first named (base) of a currency pair from the client.
Currency Pairs
The quotation and pricing structure of the currencies traded in the forex market: the value of a currency is determined by its comparison to another currency.
Spread
Spread is the difference between the current Bid and Ask prices of a particular trading instrument.
Stop Out
Stop out is a forced order closure issued if the margin level is less than certain percentage. The purpose is to avoid situations in which the client owes the company, otherwise their balance would be negative. Order(s) is closed by Stop out once Margin level hits certain percentage . Positions with more loss are closed first. If margin level goes above stop out level after that, no more positions will be closed.
• Stop out level is determined by the broker.
• Stop out level in Fxparamount Broker is depends on the account type.
Leverage
The ratio of equity to loan capital is known as leverage. The terms financial leverage and credit leverage are also widely used. The size of the leverage ranges up to 1:500 in fxparamount.
SWAP
Swap is an overnight (rollover) commission deducted or added (depending on the type of the order) to your balance for holding the position over night. It is added/deducted at 22:00 GMT+0. Swap rates differ from one currency pair to another and are based on the interest rates of the countries involved in each currency pair and whether the position is short or long.
• Swap long is swap value in points for buy positions.
• Swap short is swap value in points for sell positions.
•Swap is calculating based on quote currency
Margin
Margin is the amount of funds in account currency which is withheld by broker for order opening and keeping the order opened.
Equity
Equity is a key figure which counts results (profit/loss) of all the open orders, i.e. reflects amount of funds which is going to remain in the account if trader closes all the open orders at the moment.
Balance
Balance is the total financial result of all completed transactions and depositing/withdrawal operations on an account.