Discover a wide range of trading benefits and make your trading experience a more enjoyable and successful one. Forex trading 101 or the introduction to forex trading enable us to know how forex works and how to make money with currency trading on forex. Our free Forex Currency Converter gives you accurate and instant foreign currency conversions. Stay on top of the Forex market with our foreign currency converter. Use our free Forex Pivot Point Calculator to better understand Forex market trends and predict trends before they happen.
Use our free Forex Margin Calculator to help you make better decisions with the Forex market. Watch our step-by-step Flash tutorial of the ICTS trading platform. Currency trading is the act of buying and selling international currencies. Very often, banks and financial trading institutions engage in the act of currency trading. Individual investors can also engage in currency trading, attempting to benefit from variations in the exchange rate of the currencies. Its daily turnover is more than 2.
The exchange rate is a price – the number of units of one nation’s currency that must be surrendered in order to acquire one unit of another nation’s currency. Various terminologies in currency market: Spot price: The price at which a currency trades in the spot market. Futures price: The price at which the futures contract trades in the futures market. Contract cycle: The currency futures contracts on the SEBI recognized exchanges have one-month, two-month, and three-month up to twelve-month expiry cycles.
Hence, these exchanges will have 12 contracts outstanding at any given point in time. Final Settlement date of each contract. Expiry date: It is the date specified in the futures contract. The last day for the trading of the contract shall be two working days prior to the final settlement date or value date. Basis: Basis can be defined as the futures price minus the spot price. In a normal market, basis will be positive.
Futures prices normally exceed spot prices. Cost of carry: The relationship between futures prices and spot prices can be summarized in terms of what is known as the cost of carry. For currency derivatives carry cost is the rate of interest. Initial margin: The amount that must be deposited in the margin account at the time a futures contract is first entered into is known as initial margin. Marking-to-market: In the futures market, at the end of each trading day, the margin account is adjusted to reflect the investor’s gain or loss depending upon the futures closing price which is known as marking-to-market. Some of the liquid currencies in the world are USD, JPY, EURO, GBP, and CHF and some of the liquid currency contracts are on USD-JPY, USD-EURO, EURO-JPY, USD-GBP, and USD-CHF. News and information regarding a country’s economy can have a direct impact on the direction that the country’s currency is heading in much the same way that current events and financial news affect stock prices, hence the importance of economic factors.
Who can trade in Currency Futures markets in India? Any resident Indian or company including banks and financial institutions can participate in the futures market. Any currency can be traded on the international level. 4 major currencies are traded against the Indian Rupee.
Margin is a performance bond that insures against trading losses. Margin requirements in the FX marketplace allow you to hold positions much larger than the asset value of your account. Trading with Forex Capital Management includes a pre-trade check for margin availability, the trade is executed only if there are sufficient margin funds in your account. Short positions are taken when a trader sells currency in anticipation of a downturn in price. Making this move allows the investor to benefit from a decline. Long positions are taken when a trader buys a currency at a low price in anticipation of selling it later for more. Making these moves allows the investor to benefit from changing market prices.
One tick move on this contract will translate to Rs. 2525 depending on the direction of market movement. 2500 Price decreases by one tick: Rs. 2475 The value of one tick on each contract is Rupees 2. So if a trader buys 5 contracts and the price moves up by 4 ticks, she makes Rupees 50.