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Forex Trading - Hours of Operation |
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Forex Trading - Hours of Operation Aaron’s forex trading desk is open 24 hours daily from 6:00pm EST Sundays through 4:30pm EST on Fridays. Forex Trading - Dealing Spread AaronFX offers clients 'Interbank' forex dealing spreads, which are normally 5 pips or less on all major currencies, including EUR/USD, GBP/USD, USD/JPY and USD/CHF. However, Aaron’s forex dealing spreads may vary depending on market conditions. Aaron's forex trading spreads are dictated by overall market liquidity. Of the major forex currency pairs, EUR/USD, USD/JPY and GBP/USD are the most liquid, and therefore Aaron's forex trading spreads for these currency pairs are rarely wider than 5 pips. In fact, EUR/USD forex trading spreads are usually 4 pips during the trading day. USD/CHF is slightly less liquid than the other major currency pairs, especially during non-European trading hours. Therefore, Aaron's forex dealing spreads for this currency pair may be slightly wider than 5 pips during these hours or briefly when volatility is high is USD/CHF. AaronFX considers the ability to deal directly from live quotes more important than a consistent 5 pip or less dealing spread. Keep in mind that ALL online Forex trading providers must source liquidity from the Interbank market, and forex trading spreads should always reflect available Interbank liquidity. Forex trading firms that always offer 5 pip or less forex dealing spreads are likely compensating the disparity between their forex spreads and the current available Interbank spreads through requotes. In a worse case scenario, another forex dealer may not be offsetting client trades with liquidity sources, and instead holding your forex trades and speculating directly against you. Forex Trading - Top of Forex Trading Handbook Page Forex Trading - Lot Size Minimums AaronFX's minimum forex transaction size is US $100,000 (or the equivalent), or $10,000 on the forex mini platform, with a minimum margin deposit of $1,000. All forex transactions are normally traded in round amounts. Forex Trading - Top of Forex Trading Handbook Page Aaron’s forex clients have the ability to deal directly from live quotes. Forex prices are updated automatically as market conditions dictate, on average every few seconds. The US Dollar is the centerpiece of forex trading and is normally considered the 'base' currency for quotes. This means that most quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. For example, the forex exchange rate between US Dollars and Japanese Yen is expressed as USD/JPY 102.69. This means that there are 102.69 Yen to $1 USD. This applies to all currencies except the British pound, the Euro and the Australian dollar. These currencies are quoted as dollars per foreign currency as opposed to foreign currencies per dollar. For example, the normal method of quoting Sterling against USD is GBP/USD 1.6500. Sterling is the base of the quote; the US Dollar is the currency of the quote so at the above rate, 1.6500 USD (the currency) can be changed for ?1 (base). All forex dealing prices include a bid (buy) and ask (sell) rate. The 'bid' is the price at which a forex dealer is willing to buy (and investors can sell) the base currency for the counter currency. The 'ask' is the price at which forex dealers will sell (and investors can buy) the base currency for the counter currency. For example, using a USD base currency, if the quote reads USD/JPY 102.69 - 102.74, the 'bid' (102.69) is the rate at which you will sell Dollars and buy Japanese Yen. The 'ask' (102.74) is the rate at what you will buy Dollars and sell Yen. To illustrate a typical forex trade, consider the following example. Suppose you decide that the US Dollar (USD) is undervalued against Swiss Francs (CHF), and want to buy Dollars and sell Francs. If AaronFX's current bid/ask price for USD/CHF is 1.5622/1.5627, this means that you can sell 1.5627 Francs for $1 US. Since you are buying $100,000 and selling 156,270 CHF, your initial margin requirement would be 2% of $100,000, or $2,000. Profit and Loss (P&L) is calculated in the following manner: Suppose the bid/ask price of USD/CHF rises to 1.5835/1.5840, meaning you can buy Francs at 1.5835 and sell them at 1.5840. Since you hold Dollars, you must sell them to realize any profit. If you sell $100,000 at the current exchange rate of 1.5835, you will receive 158,350 CHF. Since you originally sold 156,270 CHF, your profit is 2080 CHF. If you wish to express profit in USD, simply divide 2080 by 1.5840 = US $1313.13 However, had the market moved in the opposite direction in the same amount, the above example would have resulted in a loss of US $1313.13. Forex Trading - Top of Forex Trading Handbook Page Forex Trading - Via the Internet Executing a forex trade with AaronFX via the Internet is a two-step process. Simply enter the number of lots and then click on the bid (buy) or ask (sell) for the currency pair you wish to trade - your deal is automatically executed. The forex trading software automatically calculates the initial margin requirement based upon the notional amount of the deal, and if sufficient funds are available in your account, will accept the forex transaction. A forex deal confirmation is immediately returned, and the system instantaneously updates both your open position and calculates your current P&L. Forex Trading - Top of Forex Trading Handbook Page Forex Trading - Via the Telephone When trading forex via phone, our forex dealers will quote the same prices available to Internet forex dealers. All telephone calls are recorded for the safety of both parties. Forex Trading - Top of Forex Trading Handbook Page AaronFX supports the following buy/sell forex orders types:
Forex Trading - Top of Forex Trading Handbook Page Aaron’s initial forex margin requirement is US $1,000 on our minimum trade size of US $100,000, or $100 on mini contracts. AaronFX will only execute forex trades on margin if the client has sufficient funds in his or her forex account. Forex margin calls may be made when a client's initial margin drops in value by fifty percent based on the value of any open positions. AaronFX reserves the right to liquidate any open forex positions should a client's initial margin drop by 95 percent. Forex Trading - Top of Forex Trading Handbook Page A rollover is the simultaneous closing of an open forex position for today's value date, (normally at the end of the trading day) and the opening of the same position for the next day's value date at a price reflecting the interest rate differential between the two currencies. Unless specific settlement instructions are provided, AaronFX will automatically roll forward all open forex positions to the next day's value date at the end of each business day, 5:00pm EST. All rolls will be done at competitive rollover rates, and depending on the currency pairs involved, forex trades will be executed where the trader will either earn or pay away points, depending on the interest rate differential between the two currencies. Forex Trading - Top of Forex Trading Handbook Page Forex Trading - Confirmations/Back Office A forex trading confirmation is sent electronically after every trade, which provides all transaction details, including date, rate, notional amount bought and sold, and reference number. Forex clients may view their current open position, real-time profit and loss statements, and all historical transaction details in the forex dealing software. Forex account statements are sent at the beginning of each month, and list all forex trading transactions for the previous month by currency and value date, a summary of all current open forex positions, and account balance as calculated at the close of business on the last business day of the month. Forex Trading - Top of Forex Trading Handbook Page |
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