With Equivolume, you can plot price and volume activity on a single graph, instead of having volume added as an indicator on the side. This tool draws the bars following their traded volume at a precise point in time (the wider the bar, the bigger the volume). That creates a clear visualization of the volume increase or decrease of an asset’s diagram. A very handy feature for those strategies whose key factor is volume. How to change your table into Equivolume
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The use of leverage basically exacerbates any sort of market movements. As easily as it increases profits, it can just as quickly cause large losses. However, these losses can be capped through the use of stops. Furthermore, almost all forex brokers offer the protection of a margin watcher – a piece of software that watches your position 24 hours a day, five days per week and automatically liquidates it once margin requirements are breached. This process ensures that your account will never post a negative balance and your risk will be limited to the amount of money in your account.
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Finally, it is important to note that in leveraged forex trading, margin privileges are extended to traders in good faith as a way to facilitate more efficient trading of currencies. As such, it is essential that traders maintain at least the minimum margin requirements for all open positions at all times in order to avoid any unexpected liquidation of trading positions.
Charts are the keys that allow us to unlock the secrets of forex trading. The subject covers a vast ground, and only by continuous practice can we expect to acquire the necessity fluency and expertise in evaluating them. The language of forex charts is really the language of currency trading. It will take some time to learn it, but when you are a native speaker, so to speak, your imagination and creativity are the only limits to your potential.
400:1: Four-hundred-to-one leverage means that for every $1 you have in your account, you can place a trade worth $400. Some brokers offer 400:1 on mini lot accounts but beware any broker who offers this type of leverage for a small account. Anyone making a $300 deposit into a forex account and trying to trade with 400:1 leverage could be wiped out in a matter of minutes.
Charts are categorized according to the way price action is depicted as well as the time frame of the period being examined. Imagine that we have a 4-hourly candlestick chart of the EURUSD pair. This means that each candlestick on the graph presents the price data of a four-hour long period in a compact form. What happens inside that time period is irrelevant. If we had chosen an hourly chart, each candlestick on the chart above would be replaced by four different candlesticks.
Clearly, leverage should be used judiciously, but even with relatively conservative 10:1 leverage, the 7.5% yield on NZD/JPY pair would translate into a 75% return on an annual basis. So, if you were to hold a 100,000 unit position in NZD/JPY using $5,000 worth of equity, you would earn $9.40 in interest every day. That’s $94 dollars in interest after only 10 days, $940 worth of interest after three months, or $3,760 annually. Not too shabby given the fact that the same amount of money would only earn you $250 in a bank savings account (with a rate of 5% interest) after a whole year. The only real edge the bank account provides is that the $250 return would be risk-free.
To trade $100,000 of currency, with a margin of 1%, an investor will only have to deposit $1,000 into her or his margin account. The leverage provided on a trade like this is 100:1. Leverage of this size is significantly larger than the 2:1 leverage commonly provided on equities and the 15:1 leverage provided in the futures market. Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% during intraday trading (trading within one day). If currencies fluctuated as much as equities, brokers would not be able to provide as much leverage.
If you are a rookie trader, you may find yourself asking questions such as 'what is leverage in Forex trading?' and 'how can it be useful?' This article will provide you with answers to these types of questions, together with, a detailed overview of Forex leveraging, its advantages and disadvantages, and a list of possible applications and restrictions.
The forex market is the most liquid and active market in the world. At every single second an enormous amount of transactions gets executed, with the total daily turnover being regularly estimated to reach trillions of dollars. If we did not make use of an analytical tool such as a forex chart to place the data into a more compact form where it can be visually examined and analyzed, we would be in possession of a vast sea of difficult to interpret numbers. The forex trading chart, then, is a visual aid that makes the recognition of trends, and patterns in general easier, and makes the application of technical tools of analysis at all possible.
For retail clients, leverages of up to 1:30 for currency pairs and 1:20 for indices are available. For professional clients, a maximum leverage of up to 1:500 is available for currency pairs, indices, energies and precious metals. Both retail and professional status come with their own unique benefits and trade-offs, so it's a good idea to investigate them fully before trading. Find out today if you're eligible for professional terms, so you can maximise your trading potential, and keep your leverage where you want it to be!