Forex ideas

What is a pip?
Pip stands for "percentage in point" and it is the smallest increment by which a Forex cross price changes. Most currency pairs are quoted to four decimal places, meaning that a movement from 1.1850 to 1.1851 for a currency pair would constitute one pip. For a particular position, you can calculate the value of a single pip using the following formula. For instance, you know that the EURUSD is quoted with four decimals, so for a given position you can multiply the position amount by the value of one pip, or USD 0.0001. So, on a EURUSD 100,000 contract, one pip would equal USD 10. On a USDJPY 100,000 contract, one pip is equal to JPY 1,000 because USDJPY is quoted with only two decimals (meaning 1 pip = JPY 0.01).

What FX products can be traded?
Keytrade Pro supports the trading of Forex Spot, OTC Options and Forward Outrights, as well as a wide array of trade orders.

What is a currency pair?
A currency pair is a Forex instrument, also known as a cross, for example USDJPY. When you trade in Forex, you always trade currencies in pairs. Thus in the example of USDJPY, this pairing indicates that you trade U.S. dollars against Japanese yen. If you buy dollars, you pay in yen, and if you sell dollars you receive yen.

What is spot?
A direct trade on a market price with a standard settlement date (Value date) of 2 business days from the trade date.

What is the spread?
The difference between the Bid price (at which you can sell the trading instrument) and the Ask price (at which you can buy the trading instrument). For more information on the trading conditions at Keytrade Pro, go to your Keytrade Pro and click Account > Trading Conditions.

What does Value Date mean?
The date when the settlement of funds for a trade transaction will take place in your account. This is usually at spot (2 working days after the trade), but can be less or more days. This allows time for the necessary paperwork and cash transfers to be arranged.

What crosses can be traded?
Over 160 Forex currency crosses – more than any other online provider.

What is a Forward Outright?
An order to trade a Forex instrument at a fixed price on a fixed date. The price of the forward outright is the spot rate adjusted for the interest rate differential between the two currencies until maturity. Forex forward outrights enable you to take advantage of the interest rate differentials between two currencies and to hedge foreign exchange exposure risks. By purchasing a currency for a future date at a fixed price using a forward outright, you can avoid risky exposure to unpredictable foreign exchange fluctuations.

How are margins calculated on FX?
Keytrade Pro offers very low margin rates, enabling you to maximize your investing power. For detailed information visit: trading rates and trading conditions.

What is the cost of converting my Profit and Loss?
Currency conversions of profits and losses are done using the prevailing close rate as of 17:00 EST (New York Time) plus/minus 0.5%.

How can I use a Limit Order?
Limit orders are commonly used to enter a market and to take profit at predefined levels. Limit orders to buy are placed below the current market price and are executed when the Ask price hits or breaches the price level specified. (If placed above the current market price, the order is filled instantly at the best available price below or at the limit price.) Limit orders to sell are placed above the current market price and are executed when the Bid price breaches the price level specified. (If placed below the current market price, the order is filled instantly at the best available price above or at the limit price.) When a limit order is triggered, it is filled as soon as possible at the price obtainable on the market. Note that the price at which your order is filled may differ from the price you set for the order if the opening price of the market is better than your limit price.

How can I use a Stop Order?
Forex Stop orders are commonly used to exit positions and to protect investments in the event that the market moves against an open position. Stop orders to sell are placed below the current market level and are executed when the Bid price hits or breaches the price level specified. Stop orders to buy are placed above the current market level and are executed when the Ask price hits or breaches the price level specified.

Keytrade Pro supports a variety of stop orders, including Stop if Bid and Stop if Offered Orders.

Stop if Bid orders are commonly used to buy the applicable currency pair in a rising market. If the price level specified in the order is actually Bid on the market, the order will be filled at the price offered by the market maker. For example, if you sold GBPUSD at 1.4280, with a Stop Bid at 1.4330, the position would be closed (GBPUSD would be bought) if the Bid price hit or breached 1.4330. We recommend the use of Stop if Bid orders only to buy Forex positions. The use of Stop if Bid to sell Forex positions can result in positions being prematurely closed if a market event causes the Bid/Ask spread to temporarily widen.

Stop if Offered orders are commonly used to sell the applicable currency pair in a falling market. If the price level specified is actually offered in the market, the order will be filled at the price bid by market maker. For example, if you bought USDJPY at 132.00, with a Stop Offer at 131.50, the position would be closed (USDJPY would be sold) if the Offer price hit or breached 131.50 (in other words, if 131.50 is offered). We recommend the use of Stop if Offered orders only to sell Forex positions. The use of Stop if Offered orders to buy Forex positions can result in positions being prematurely closed if a market event causes the Bid/Ask spread to temporarily widen.

What are Related Trade Orders?
Related, or contingent, orders are trade orders linked together to create more complex trading strategies. There are several types of contingent orders, the most popular of which are If Done and O.C.O. orders. If Done orders (also known as slave orders) where a slave, or subordinate, order only becomes active if the first one is executed. For example, you might place a limit order to buy EURUSD and then, if this order is filled, a subsequent limit order to sell EURUSD if the spot price breaches a certain level. One Cancels the Other (O.C.O.) is an order sequence where the execution of one order cancels the other. O.C.O. orders are often used to place both a stop loss and a profit taking (limit) order around a position – the first of the orders to execute will automatically cancel the other.

What is Tom/Next?
"Tom" stands for tomorrow and means "the next working day after today" and "next" means "the next working day following". This term is used to describe the basis on which an open Forex position, if held at the end of the business day prior to its Value Date, is rolled over to a new value date.

What are the hours to trade FX?
Keytrade Pro is open for Forex trading whenever the market is open:

From Monday 05:00 Sydney local time (currently Sunday 19:00 GMT)
To Friday 17:00 New York local time (currently Friday 22:00 GMT)
What is a ticket fee threshold?
The minimum amount that a client can trade without incurring a ticket fee. For Forex trades below this threshold, a small ticket fee of USD 10 is added to the trade to cover administration costs.

What is FIFO?
FIFO = First In, First Out
If a client makes a trade that is the opposite of one or more existing open positions, e.g. buys EURUSD and already has two open short EURUSD positions, the system will use the FIFO principle and automatically close out the oldest of the open positions. In the example, that would mean closing out the oldest of the short EURUSD positions.