Forex trading conditions.
the trading conditions of Forex brokers also play an important role in the increase
Trading conditions are a set of all types of commissions that a broker charges when conducting dealing; this also includes other important operating parameters.
When choosing a brokerage company, it is especially important that it matches your trading strategy; only in this case will trading be as comfortable as possible.
Now let's move on to what the “Trading Conditions” include.
• Initial deposit - the minimum amount that is required to be deposited into a trader's account to begin trading, ranges from 0 to $10,000 , depending on the dealing center .
• Minimum volume – or minimum Forex lot used when opening transactions. On standard accounts this is usually 0.1 or at best 0.01 lots (10,000 or 1,000 units of the base currency). Cent accounts allow you to trade mini lots, in this case the minimum volume is 0.001 (100 units), and sometimes even less - 0.0001 (10 units).
• Spread – the size of the commission per transaction; this is the first thing most traders pay attention to. The spread is calculated from one lot, for example, for the EURUSD currency pair the spread value is 1 point , or if we translate into specific numbers, then for the calculations we take the quoted currency and a simple formula - position volume * one point * dollar exchange rate, hence for a volume of 1 lot and a four-digit quote, we will pay 100,000*0.0001*1=$10.
The spread indicator can be fixed or floating; the size of the latter depends on the liquidity of the currency pair and is constantly changing.
• Swap – a fee for transferring a position to the next day; it is only important if you leave transactions overnight. Usually its size does not greatly affect the final result; this type of commission is described in more detail in the article “ Swap (swap or fee for transferring a position )”.
• Stop out - a limit upon reaching which your position will be automatically closed, usually 10 - 20 percent of the deposit.
• Execution of orders - market (at the market price, taking into account the deviation you set from the quote price) and accurate (if the prices do not match, a refusal is received).
Trading efficiency is influenced more by execution speed than by option. • Restrictions – a rather important point in trading conditions; usually brokers limit such indicators as – minimum and maximum transaction time (for example, no shorter than 5 minutes or no longer than 2 weeks), the number of orders per day, the use of automatic trading, restrictions on withdrawal of funds .
Moreover, you can get acquainted with the restrictions only in the service agreement, which most traders simply ignore. These are, perhaps, all the parameters that you should pay attention to when studying the conditions of Forex trading.