Foreign Currency Rate
Foreign currency rates fluctuate on a daily basis. Unlike other markets, the Forex [Foreign currency] markets remain open 24 hours per day, 6 days per week. By speculating about the movement of two currencies against one another, a trader is able to profit from the Forex market. If a trader correctly predicts how two foreign currency rates will change, significant returns can be made because of the high amount of leverage used.
FX Trading offers industry leading leverage, allowing our clients to more greatly profit from swings in foreign currency rates. Unlike our competitors that only offer 100:1 leverage, FX Trading provides our clients access to leverage as high as 400:1. There are no restrictions on who qualifies for the 400:1 leverage. Every client may choose the leverage that they would like.
With our 400:1 Leverage, it is possible to make a 400% return from a one penny movement in Foreign currency rates. A trader using 400:1 leverage only needs $250 of equity to open 1 standard lot. Hypothetically, let's presume that a trader chooses to buy one lot of the GBP [British Pound] against the USD [US Dollar]. If the foreign currency rate of the GBP increases 1 cent relative to the USD, the trader would have made $1,000. The trader only needed $250 of equity to open that position and therefore made a 400% return.
Foreign currency rates can regularly move one cent or more. The major currencies like the GBP can move several cents off of major economic announcements. The American Non-Farm Payroll or interest rate decisions can have tremendous impacts on foreign currency rates.
Traders should not only familiarize themselves with technical analysis, but should be aware of global news announcements. Regular occurring events such as the Non-Farm payroll or CPI numbers can significantly move the forex markets. As a trader, you must be aware of when these major announcements are being released. To view a constantly updated list, view FxQuote.com
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