Frequently Asked Questions About Forex Trading
In this section, you can find the answers to the most frequently asked questions. We hope that the information below will be useful and save you time. If you don’t find what you are looking for here get in touch!
Take a look at our list of the Forex Trading Terminology associated with trading and the markets.
The demo account in FOREX359 is for a period of 30 calendar days. You yourself can choose the account currency, the virtual amount from 5000 to 5 million (EUR or USD) and leverage from 1:1 to 1:100.
Once you sign up for the demo account of FOREX359, you can trade with virtual sums from 5000 to 5 million (EUR or USD) within 30 calendar days.
There is no required minimum deposit in order for you to open a real trading account in FOREX359.
ELANA Trading is one of the oldest Bulgarian licensed brokers on the international financial markets, having over 20 years experience in providing quality and fair services to their clients. Its activity is regulated by the Financial Supervision Commission and the company complies with all legal and regulated practices in financial services. By law, the deposits of our customers are held in a segregated accounts for which ELANA Trading cares, but it has no right to dispose of the funds without the decision of their clients. The company is a member of Investor Compensation Fund Bulgaria and its customers receive the protection provided by this fund.
ELANA Trading is a licensed administrator of personal data under Bulgarian law. All data and copies of documents that you provide, including a copy of your ID card is kept as a confidential information and is used only for identification in accordance with Regulation 38 of FIMA.
Trading related questions
FOREX market is open 24 hours a day without break from Monday 00:00 until Friday 00:00.
In currency trading the cost is indirect and it is considered to be the spread. The spread is the difference between the prices the market maker is prepared to pay you for buying the currency. The spread vary for different currency pairs
Yes, using the so-called leverage. This way you can take advantage to trade with larger positions, depositing a considerably smaller amounts which serve as a guarantee.
Leverage is the ratio of personal funds to borrowed funds used for trading. The higher the number (e.g., 1: 500, 1: 1000, etc.), the higher the leverage used. In other words, you will need smaller amounts of your personal funds, in order for you to trade with larger volumes. For example, with leverage 1: 500 for every dollar your own you can buy currency or CFD worth $ 500.
Pros and cons of using leverage
The high leverage brings greater benefits as well as higher risks. When you are using only one dollar to invest in an asset worth $ 500, you increase your potential profit significantly. However, this automatically means that you carry a higher risk. By increasing the potential profit you increase the potential loss as well. For example, with $ 500 you can buy five barrels of oil. Even if you bet only one dollar of your own funds the decrease of oil price will lead to a loss of $ 5 form your investment portfolio for every dollar that the oil price falls.
No, we are a Non Dealing Desk (NDD) broker. This means that all transactions are instantly and automatically executed without being reviewed or approved by the dealer.
For FOREX, the minimum volume is 0.01 lot (1000 currency units) and for CFD it is 0.1 lot.
Swap rate for CFD spot oil is based on difference between mid-price of far month future contract and mid-price of near month future contract plus a fixed mark up.
Why is swap in MT4 platform contract specification different for some instruments than the one posted on the website in Trading Conditions section
Example 1: EUR/USD – contract size 100 000, minimum tick 0.00001, Point size = 100 000*0.00001=1.
Example 2: USD/JPY – contract size 100 000, minimum tick 0.001, Point size = 100 000*0.001=100.
Forex359 offers oil trading as a spot instrument, which has many advantages for investors who are only interested in price speculation. The Spot Oil pricing is based on the first and second nearby months of the underlying Commodity Futures Contract, calculated as follows:
Spot Price = (1-D/NumDays)*Relevant Price of First Nearby Month + D/NumDays*Relevant Price of Second Nearby Month
|D||The number of Commodity Business Days from, and including, the Previous Expiration Date to, but excluding, the Roll Date.|
|NumDays||The number of Commodity Business Days from, and including, the Previous Expiration Date to, but excluding, the Next Expiration Date.|
|Business Day||New York|
|Next Expiration Date||The date of expiration of the First Nearby Month|
|Previous Expiration Date||The date of expiration of the Previous Nearby Month that expired Immediately prior to the Roll Date.|
|Roll Date||The second Commodity Business Day after the Pricing Date|
|Commodity Reference Price||Where “USO” is specified as the “Product” in the Transaction, the Commodity Reference Price shall be OIL-WTI-NYMEX (West Texas Intermediate light sweet crude oil). Where “UKO” is specified as the “Product” in the Transaction, the Commodity Reference Price shall be OIL-BRENT-IPE (Brent blend crude oil).|
|Specified Price||The settlement price|
Example of Spot Oil Price
The figure below shows the timeline for the 1st Nearby Month and illustrates how the Spot price is derived from the Futures Contract of the 1st and 2nd Nearby months.
D = 6
NumDays = 20
Relevant price of First Nearby Month = 88.25
Relevant price of Second Nearby Month = 88.55
Spot Price = (1-6/20)*88.25 + 6/20*88.55
Spot Price = 0.7*88.25 + 0.3*88.55
Spot Price = 88.46