Example of Trading Forex

Long Position in GBPUSD Let’s say the price of GBPUSD is currently 1.5100 – 1.5102. You want to buy, because you expect the price of to rise. When you buy a currency pair, you are buying the first currency and selling the equivalent amount of the second currency in the pair, (or vice-versa when you […]

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What is FX Trading?

FX or Forex Trading is the name given to trading one currency against another. When you go on holiday for example, you may sell your Sterling and buy Euros (if you are visiting Europe). For example you may find £500 will buy you EUR 600 at the bank or bureau de change on a given […]

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Example of Trading Index CFDs

Long Position in FTSE 100 Let’s say the price of the FTSE 100 is currently 6300 – 6302. You want to buy, because you expect the price of to rise. You buy 1 Lot of the FTSE at 6302. With an account on 100:1 leverage, your margin requirement will be (6302 x 10) / 100 […]

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What is CFD Trading?

What is CFD Trading? CFDs are traded on margin. The principles behind trading CFDs are very similar to those of forex When you start trading CFDs you will see that the price quoted is actually a two-way price. For example, taking the FTSE 100 as an example, you may see the price is 6300 – […]

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Trading Glossary

Active Management Active fund managers believe securities are mis-priced and can spot opportunities to outperform the market through asset allocation and/or stock selection. See also index tracking and passive management.   ADR American Depository Receipt    Arbitrage The simultaneous buying and selling of a security at two different prices in the same market, with the […]

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What is a CFD?

What is a CFD? CFD stands for ‘Contract for Difference’. A CFD is an agreement between two parties, typically called a ‘buyer’ and ‘seller’, where the buyer agrees to pay the seller the difference between the opening and closing price of a CFD contract at the time the CFD position is closed. A CFD is […]

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What are the FX Markets

What are the FX Markets? The foreign exchange market (also known as FX, Forex or currency market) is a global decentralised financial market for trading currencies. Financial centres around the world act as hubs for trading between a wide variety of buyers and sellers. The forex market is one of the largest financial markets in […]

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Sharpe Ratio

The Sharpe Ratio of reward-to-variability ratio measures excess return per unit of risk (standard deviation) in an investment asset vehicle or investment/trading strategy. The mathematical definition of the Sharpe ratio is:     where: = portfolio return = risk-free rate = standard deviation of portfolio returns The Sharpe ratio describes how well the return of […]

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