Frequently Asked Questions

Online forex trading has become very popular in the past decade because it offers traders several advantages. Forex never sleeps: Trading goes on all around the world during different countries' business hours. You can, therefore, trade major currencies any time, 24 hours per day, 5 days a week. Since there are no set exchange hours, it means that there is also something happening at almost any time of the day or night. Go long or short: Unlike many other financial markets, where it can be difficult to sell short, there are no limitations on shorting currencies. If you think a currency will go up, buy it. If you think it will fall, sell it. This means there is no such thing as a "bear market" in forex–you can make (or lose) money any time. Low Spread cost: Most forex accounts trade without a commission and there are no expensive exchange fees or data licenses. The cost of entering a trade is the spread between the buy price and the sell price, which is always displayed on your trading screen. Unmatched liquidity: Because forex is a $4 trillion a day market, with most trading concentrated in only a few currencies, there are always a lot of people trading. This makes it easier to get in to and out of trades at any time, even in large sizes. Available leverage: Because of the deep liquidity available in the forex market, you can trade forex with considerable leverage (up to 1000:1). This can allow you to take advantage of even the smallest moves in the market. Leverage is a double-edged sword, of course, as it can significantly increase your losses as well as your gains. International exposure: As the world becomes more and more global, investors hunt for opportunities anywhere they can. If you want to take a broad opinion and invest in another country (or sell it short!), forex is an easy way to gain exposure while avoiding vagaries such as foreign securities laws and financial statements in other languages.

A pip is the unit you count profit or loss in. Most currency pairs, except Japanese yen pairs, are quoted to four decimal places. This fourth spot after the decimal point (at one 100th of a cent) is typically what one watches to count "pips". Every point that place in the quote moves is 1 pip of movement. For example, if the EUR/USD rises from 1.4022 to 1.4027, the EUR/USD has risen 5 pips. Stock indices have 'points', futures have 'ticks', forex has 'pips'. The monetary value of a pip can vary according to the size of your trade and the currency you are trading. FXCM demo accounts typically trade in increments or "lots" of 10,000. A pip in a standard demo account in EUR/USD is worth $1.00 per lot. If you were trading 3 lots, you would have 3 pips of profit or loss per pip the EUR/USD moves, and, therefore, $3.00 of profit or loss. FOR EXAMPLE: The EUR/JPY pips are valued in Japanese yen. USD/CAD pips are in Canadian dollars, and so on. Once again, your trading station makes it all easier by doing the math for you.

A “pip” is the smallest increment, or movement in any currency pair. In USD/JPY, a pip = 0.01, or a movement, for, example from 102.55 to 102.56 In GBP/USD, a pip = 0.0001, or a movement, for example from 1.6755 to 1.6756

A “pip” is the smallest increment, or movement in any currency pair. In USD/JPY, a pip = 0.01, or a movement, for, example from 102.55 to 102.56 In GBP/USD, a pip = 0.0001, or a movement, for example from 1.6755 to 1.6756

A “pip” is the smallest increment, or movement in any currency pair. In USD/JPY, a pip = 0.01, or a movement, for, example from 102.55 to 102.56 In GBP/USD, a pip = 0.0001, or a movement, for example from 1.6755 to 1.6756

A “pip” is the smallest increment, or movement in any currency pair. In USD/JPY, a pip = 0.01, or a movement, for, example from 102.55 to 102.56 In GBP/USD, a pip = 0.0001, or a movement, for example from 1.6755 to 1.6756

As mentioned before, all trades are executed using borrowed money. This allows you to take advantage of leverage. Leverage of 200:1 allows you to trade with $10,000 in the market by setting aside only $50 as a security deposit. This means that you can take advantage of even the smallest movements in currencies by controlling more money in the market than you have in your account. While leverage can be advantageous in increasing your profits, it can also significantly increase your losses when trading, so it should be used with caution. Start trading in small sizes so that you don't take on too much risk. Leverage is a double-edged sword.

A “pip” is the smallest increment, or movement in any currency pair. In USD/JPY, a pip = 0.01, or a movement, for, example from 102.55 to 102.56 In GBP/USD, a pip = 0.0001, or a movement, for example from 1.6755 to 1.6756

A rebate is the term used for any payment back to a referrer, such as PipRebate.com. This is what we receive from our partner brokers, and it is this rebate that we pass on to you on a monthly basis.

A Round Turn is one completed trade, a buy and sell, enter and exit, or the opening and closing of any position.