Trading Basics - FXCM Support

Trading Basics

What leverage do you recommend?

As a general rule of thumb, we recommend limiting total account leverage to a maximum of 20:1. For example, if you have an account balance of $10,000, you…

What is rollover?

Rollover is the interest paid or earned for holding a position overnight. Each currency has an interest rate associated with it, and because Forex is…

How do I calculate the lot size?

When choosing the lot size for your trade, you may want to consider a few factors: The price levels (or number of pips) you want to set your Stop/LimitThe…

What is hedging?

To hedge, the trader is long (BUY) and short (SELL) the same currency pair at the same time. …

How do I know how much margin is required for a trade?

To see the margin requirement for a specific trade, it is best to use Trading Station. Click “Entry” at the top of the platform and adjust the…

Where can I view FXCM's up-to-date margin requirements?

You can view up-to-date margin requirements listed by currency pair in the MMR column of the "Simple Dealing Rates" window within the Trading…

What is usable margin?

Usable Margin: is the amount of account equity that is currently not being used to maintain open positions. Usable Margin should be thought of as two…

What is Margin?

Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of…

How do I calculate my margin required for a trade?

To calculate the required margin for your trade, you need to determine a few things: The value of the tradeYour account leverageHere is an example: Let'…

Does FXCM offer nano Lots?

No. The smallest trade size offered by FXCM will be Micro (1K) lots through our No-Dealing Desk Execution.…

What is fixed margin?

When trading Forex on margin, there can be a few ways to determine the required margin for a trade.  Fixed margin means that there is a fixed amount…

How can I find or calculate the pip value on my trade?

The pip value on your trade depends on a number of variables: The lot size of your trade (1K/micro, 10K, 6K, etc.)The denomination of your account (Is…

What are the differences between Moving Averages?

MVA – “Simple Moving Average” This moving average gives you the average price for the last N periods. This can show the distance that…

Why does FXCM encourage lower leverage?

When you use excessive leverage, a few losing trades can quickly offset many winning trades. To clearly see how this can happen, consider the following…

What is my effective leverage?

Effective Leverage relates to the amount of leverage that your account is using to control the total value of the positions you have open.  Here is…

What is slippage and why does it happen?

Slippage is a factor when trading any financial market. Slippage occurs when the market gaps over prices or because available liquidity, at a given price,…

What is the relationship between margin and leverage?

Margin is a good faith deposit required to keep a trade open.  Leverage is a byproduct of margin and allows an individual to control larger…

Do rollover rates and policies vary from broker to broker?

Yes. In addition to our policy of transparency in reporting rollover, due to the average notional trading volume that FXCM generates to the liquidity…

How does Forex Trading work?

To better understand the basics of Forex trading and transactions, please view the video provided for you below. VIDEO Forex Transaction Basics (2:07)…

What is Used Margin?

Used Margin is the amount of account equity currently committed to maintain open positions. Used Margin can be thought as the trader's 'good…

What is a Margin Call?

Margin calls often occur due to over leveraging. Using more leverage can increase your gains, but it can also increase losses, which will quickly deplete…

What is Forex?

Forex is a commonly used abbreviation for "foreign exchange," and it is typically used to describe trading in the foreign exchange market by…

What is P/L?

P/L is your Profit or Loss in Pips. Gross P/L is your Profit or Loss in your base currency. Net P/L is your Gross P/L with commissions and interest. Day P/…

Why trade on margin?

Trading on Margin (Trading with Leverage) is a common attraction of the forex market. It allows you to open trades that are larger than the capital…

Why did my trade open/close, I do not see my price level was reached?

With any financial product, there is a price to Buy and a price to Sell. When verifying if a trade should have triggered it is important to…

Where can I monitor my available margin in Trading Station?

The usable margin column, in the accounts window of the Trading Station, shows the amount of funds you have remaining in your account to open new…

How do orders execute over the weekend?

If the requested price of a stop or stop entry order is reached at the open of the market on Sunday, the order will be filled at the next available price…

How do I avoid a margin call?

Margins calls often occur due to over leverage. Using more leverage can magnify your gains, but it can also magnify losses which will quickly deplete your…

Which currencies are the best to trade?

The "majors" and the "commodity pairs" are the most liquid and most widely traded currency pairs in the Forex market. These pairs and…

Which indicators show Support and Resistance?

Support and Resistance indicators include: Pivot – “Pivot Levels”The indicator shows pivot point and the last period levels. This can…

What are the differences between the oscillators?

RSI – “Relative Strength Index” This shows the price strength by comparing upward and downward close-to-close movements. RSI will…

Which indicators can show me the trend?

HA – “Heikin-Ashi”This indicator helps to identify trends and trend changes more easily. Heiken-Ashi modifies the traditional Japanese…

What is an example of rollover on a Forex pair?

When you buy the EUR/USD pair, you are buying the euro, and selling the U.S. dollar to pay for it. If the euro interest rate is 4.00%, and the U.S. rate…

What happens when I BUY a currency pair?

Take the idea of buying. What if you bought something (it could literally be almost anything...a house, a piece of jewelry or a stock) and it went up in…

What strategies can I use when trading?

Traders may employ many strategies when trading with FXCM. Some of these strategies include: Scalping,News trading,EA's (automated Trading)API trading.…

How to calculate PIP value?  

The example below shows how to calculate the value of 1 Pip for one 10K lot of EUR/USD where the base currency of the account is USD: Start with 10,000.…

Why did my trade close?

To see how a trade closed, it is best to run an account statement.  Log onto MyFXCM with your account details. Hover your cursor over 'My…

What is automated trading?

Automated trading is the use of a computer program that executes based on a set of rules on when to buy or sell.  …

What is the required internet speed for trading?

We recommend having the strongest internet connection possible. At a minimum, a 56K or dial up internet connection is supported but not recommended. …

Why are some prices/candles/bars red or blue?

By default in the Trading Station, a price is highlighted with a blue background when it moves up, and red when it moves down. On the charts, if the…

What indicators can I use to see the trend strength?

ADX – “Average Directional Index”This indicator determines the strength of a prevailing trend. It is important to note it provides a…

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