Frequently Asked Questions

What is Forex?
FOREX (Foreign Exchange Market) is a global currency market that exchanges a certain sum of currency from one country to the currency of another at a changing rate, subject to the date of exchange.

Where is Forex?
FOREX is a virtual network of currency dealers connected among themselves by means of telecommunications. FOREX currency dealers are connected to leading world financial centres, and round the clock workers. As a result, FOREX forms a united and very efficient system.

In what currency are calculations made?
All calculations are conducted in one of four currencies: US dollars; Euro; British pound; Japanese yen. All transactions for transfer of money resources on the trading account into other currencies will be converted to US dollars at an internal rate of the bank of the addressee on the day of transfer.

How can I make a profit in the Forex market?
We shall assume that you are a client of our company, and that you have an account with 1000 USD, which allows you to strike a bargain on a market lot of 100 000 USD. Having analyzed the change of the USD/JPY rate by means of a method of convergence - divergence of the sliding averages MACD (the fast line has crossed the slow from top to down) - you make a decision to buy 100 000 USD against the Japanese yen at the price of 121.00.Within a few hours of a day when the USD/JPY rate has grown on 200 points, and becomes 123.00, you decide to close a position; therefore, you will have sold your dollars at a higher rate than what you bought them at, and made a profit.
The profit (loss) = [(the price of closing - the price of opening) lot's weight] /price of closing Profit = [(123.00-121.00) *100000]/123.00=1626.02 USD
Notice that the fluctuation of the JPY on 200 points in a day is not an unusual occurrence.

Who are the participants of the market?
The main participants of the currency market are: the central and commercial banks, currency stock exchanges, the companies carrying out foreign trade operations, investment funds, broker companies, and individuals.

What advantage can Forex bring to the private investor?
A trader with small means can operate on the market with sums amounting to one hundred thousand dollars. For example, for a trader to make a transaction of 100 000 dollars at a mortgage rate of 1 % only 1000 dollars is needed as a marginal deposit.

What currencies are the most liquid?
The most liquid currencies are US dollar (USD), British pound (GBP), Euro (EUR), Swiss franc (CHF), Japanese yen (JPY) which make the main volume of all operation on the FOREX market.

Why is Forex so popular?
FOREX is popular, because it speaks for today's market. It is characterized by the greatest volume of tenders, the lowest cost of spent transactions, and the fastest movement of money resources. It is a unique world market operating 24 hours a day.

How can I conclude my transactions?
To make a bargain the trader should request the quotation from the active participant of the market (market-maker), as follows:
- specify the tool (currency pair) on which the trader wishes to make the transaction;
- specify the sum of the contract;
- receive the bilateral quotation on the requested tool from the market maker;
- as a trader make the decision to buy, sell, or refuse the transaction.

Is it possible to limit losses?
In case the market turns against the open position of a trader there are protective stop-orders, known as "stop-losses" to limit losses under transaction.
We shall assume that we have an open position on GBP: BUY 100 000 GBP/USD at the rate of 1.4010 dollars for GBP. A level 1.4000 for pound is very strong. We think that the pound will make a start from it and will grow in price. We decide to place a "stop-loss" order at 20 points below 1.4000, i.e. at a level 1.3980. It is possible that the pound could fall to a 100 pips below 1.4000, thus reaching a level of 1.3900. Recent events have shown the pound falling by 300 points, because of the link with the Euro zone. Should this happen we reserve the right to close the transaction at 30 points, thus limiting the potential loss.

What is the difference between a "demo" account and "real" account?
The demo-account is ideal for study purposes. Operating conditions on demo-accounts are identical to operating conditions on real accounts: techniques for fulfillment of transactions, the order of inquiry for quotations, parameters for conducting the open position are the same. The basic difference of a demo-account from the real is that making the transaction through a demo-account you receive the quotation which an automatic device has chosen from a current stream of quotations, some of which come with a certain time delay. With the real account you receive the market quotation from the dealer of the company. Accordingly, with real account you receive the price in 1-2 seconds, and in the demo account in 10-15 seconds (time of reception of the answer can increase - it depends on the quality of your liaison channel). Otherwise, the two systems are identical.

What must I do if the trading terminal gives an "Invalid Login" signal?
When this happens it is most likely that more than 60 days has passed since the demo account was opened, so your demo-account has been removed by a server. In this case open the new educational account.

What do the position names "long" (LONG) and "short" (SHORT) mean?
In slang of traders "to open a long position" means to buy the base currency and "to open a short position" means to sell the base currency.
For example, the trader has bought Euro 100,000 for Dollars, i.e. has opened a long position on euro.
BUY 100,000 EUR/USD - a long position on euro.
SELL 100,000 EUR/USD - a short position on euro.

What is a credit shoulder and who gives it? What is the principle of margin trading?
Margin trading means that for the trader it is not obligatory to have the whole sum of the contract. It is enough to bring the mortgage (margin), which usually makes 1-2 % of the necessary sum. The missing amount will be given to you by bank through which you will make transactions in the Forex market. In slang of currency traders it is referred to as "granting of a leverage" So, to purchase a 100,000 dollars for Japanese yens at a leverage 1:100 it is necessary to bring only 1 000 dollars as a marginal deposit.

What is "trailing-stop"? How does it differ from the "stop-order"? Does it work when my computer is switched off?
When you implement trailing-stop (for example on X points) the following occurs:
Stop Loss order is intend to minimize losses in case the chart of the financial instrument price has started moving in the unprofitable direction. When an opened position becomes profitable, Stop Loss can be moved manually at the certain distance from the current price. Trailing Stop is used to automate this process and maximize the profit. This tool is especially useful by the strong unit-directional motion of the price (by the pronounced trend without a deep back off) and also in case there is no possibility to watch closely the changes of the markets.
To set Trailing Stop it is necessary to run the context menu command in the window "Terminal - Trade - Trailing Stop". After that one customize the desired value of distance between the order level and the current price.
After this by each tick-quotation incoming the terminal starts proving checking for position profitability. If an open position is profitable and Stop Loss Order is missing and the predicted level of Trailing Stop is in the loss zone, this mechanism is idle. The terminal traces the boundary in price levels and as soon as the jump into the profitable zone occurs (profit at the points is equal or is more than the parameter Trailing Stop), the command for Stop Loss placement is being executed automatically. The order level is set at the distance indicated from the current price. Later in case the price moves to large profitability of the position, Trailing Stop automatically moves Stop Loss behind the price. If each incoming tick-quotation decreases profitability of position then no order modification occurs. Thus, there happens limitation of losses of the opened position without the participation of the trader. By each automatic modification of the Stop Loss Order there is a record being made in journal. By the considerable current trend correction there can occur Stop Loss execution. At that Trailing Stop stops being executed.
The execution of the Trailing Stop Order can be stopped if one shows the parameter "None" in the order management menu. To cut off all Trailing Stops it is necessary to run the command "Delete All".
Attention: Trailing Stop woks on the client terminal and not on the server like Stop Loss or Take Profit. Therefore, by exit from terminal, in contrast to the specified above orders, Trailing Stop will not be worked. At the deactivated terminal there is only Stop Loss, placed by Trailing Stop that can be executed.

What is Margin Call?
It is a demand need for additional funds required by the clients to increase their margin level of their deposits in case of a sudden adverse change in the international market price. If the current condition of the trader's account in view of the open positions becomes less than the necessary margin needed for maintenance of the trader's positions in the market, the dealer has the right to close all or some positions of the trader. This condition also refers to Margin Call. Usually for the open position in 100 000 USD Margin Call comes, if the current condition of the account of the trader makes less than 50 USD, i.e. less than 5 % from the mortgage of 1000 USD.

What is the cost of one point in the Forex market?
Let's say that you have bought USD/JPY - 1.0 lot at the price of 109.59. Then you have closed the position at the price of 109.99. What's your profit? Opening the transaction, you have bought 100000 USD and have sold: 109.59 * 100000 = 10959000 JPY. Closing the transaction, you have sold 100000 USD and have bought: 109.99 * 100000 = 10999000 JPY. Thus, (10999000-10959000) = + 40000 JPY, that makes (in US dollars) at the rate of closing the transaction: 40000 / 109.99 = 363.67 USD. It is also your profit. Accordingly, 1 point (1 pip) will be equal: 363.67 / (109.99-109.59) = 9.09 USD. It is similarly possible to lead calculation on other currency pairs.

Is there any commission on the trade?
No, our company does not charge commissions on FOREX.

What kinds of leverages do you give? How can I change them?
We give a leverage from 1:1 up to 1:500 (NorthFinance). You can choose your desirable level of leverage during the opening procedure, or you can change your leverage level at any time by sending us a written request letter.
An example: you have bought standard contract - 100 000 EUR/USD ({100 000 euro for 100 000 USD} * current quotation).
At a leverage - 1:50 spent the margin will make (100 000 USD* current quotation)/50.
At a shoulder 1:100 - (100 000* current quotation)/100;
At a shoulder of 1:200 - (100 000*current quotation)/200.
Required margin: at a leverage 1:50 - 2451,2 USD; at a leverage 1:100 - 1225,6 USD; at leverage 1:200 - 612,8.

How long is it possible to keep the position open?
You can keep a position open as long as you want. Every day at 00.00 server time, the charge of a swap will be executed on your account.

What is the price of carrying the position to the next day, and when is it carried out?
Carrying forward an open position in FOREX market to the next day is done in the form of market swaps which can be both negative, and positive, depending on the difference of interest rates in countries of the currencies.
We shall assume that in Europe the SWAP rate is 4.25 %, and in USA 3.5 %. Let's say you have 1.0 lot of EUR/USD, and you are open for sale. You decide to sell 100,000 EUR, which means you should borrow the lot for under 4.25 % annually. Having sold euro you buy dollars, which you put at a deposit for under 3.5 % annually. The total costs on your transactions will be: (4.25-3.5) % annually or the same at rate EUR/USD 0.9000. This sum makes 675 dollars per year or 1.85 dollars per day.
Carrying a position occurs at 00.00 (Server time).

Is it necessary to pay for carrying a position to the next day?
In our company, the prolongation of a position to the next day is carried out through a short operation called "Roll-over" (Roll-over or Swap Tom/Next).
Roll-over consists of; two opposite transactions in accordance with an identical sum, different dates of value (Volume - tomorrow and Spot - the other working day) and slightly differing rates.
Roll-over is an artificial closing of the available open positions fora certain value date and simultaneous opening of the same positions for the following value date under the prices reflecting a difference of interest rates between considered currencies. Depending on the kind of position (Buy or Sell) the client receives or pays a sum to carry a position (from the several tenth poitns up to several points). When the position is transferred since Wednesday on Thursday (value dates mean), this sum increases approximately three times.

Why does the client pay or receive funds for carrying a position?
This is because at the conclusion of the transaction he will have received the credit in the currency at which he/she has sold the position and should pay a percent of the sale. At the same time, he has placed his purchased currency in a deposit and should receive an interest. Interest rates on currencies differ; therefore there is a difference which is considered at the carrying of a position. If the client has sold the currency with a greater interest rate the profit will pay for the carrying of a position. If he has bought currency with a greater interest rate, the broker will pay for the carrying of his position. Usually roll-over is carried out automatically at the beginning of the day prior to the value date.

What are the conditions for setting "Stop-loss" or "Limit" orders?
Pleace refer to specification page for each broker.

What time MetaTrader shows?
GMT+2 for NorthFinance and GMT+1 for Neuimex

Why I can see in "Market Watch" (the Review of the market) only 4 currencies though it is written on your site, that you give cross-country-rates?
Press the right button of the mouse on any tool in a window "Market watch" and choose in the menu "Show all symbols" (To show all symbols); or choose "Show symbol" (To show a symbol) and then specify the tool interesting you.

Why I can't buy or sell on Sunday, some kind of a message "Trade is stopped" jumps out?
The Forex Market works round the clock from Monday till Friday. Accordingly, on Saturdays and Sundays the tenders are closed.

At my account I have got 1005 dollars. A credit shoulder is 1:100. I wish to open a position on EUR/USD (1 lot), but the terminal gives out the following message - "Not enough money" (Not enough means). Why?
For opening one lot on EUR/USD it is necessary to have 1000 EUR, i.e. 1000 * (current rate EUR/USD) =1000*1.2074=1207.4 dollars.