New to Forex

For those of you that are new to the foreign exchange (forex) market, it is important to familiarize yourselves with this market’s characteristics and unique attributes. The forex market allows traders to buy and sell distinct currency pairs. No commission is charged per trade, the broker is compensated through the buy and sell price differential – commonly known as the “spread”. Below are a few guidelines to start trading with Advanced Currency Markets – your gateway to the largest and most liquid market on earth.

Rollover of positions (swap)

For the sake of transparency and unlike any other online broker we actually have a complete explanation of applied cost of carry on behalf of the market or the customer on open positions held overnight. This overnight cost of carry is presented as a simple flat fee either paid or charged on a customer's account. This process makes for extremely simple statements and greatly increased executional transparency since we do not modify the original price of the position entered into by the customer.

Forex trading margins

A margin deposit is not, as many traditional traders suggest, the payment in cash for purchasing market shares. A margin is in fact a guarantee or a trust deposit, providing protection from losses during a deal? It allows traders to open positions on amounts that greatly exceed their account limits and so increase their buying power. ACM offers a 1% margin (or 1:100 leverage), which means you can control 100 times your deposit in the real market.
If the funds in the account, in the course of trading, fall below the prescribed margin, your positions will be closed automatically without prior notice. Using this system, the client’s account cannot go overdrawn even under volatile, fast-changing market conditions.
The formula for calculating margins is as follows: (account balance + profit/loss) : open position = the margin

Forex market working hours

The forex market, based on ‘spot’ transactions, is unique in comparison with all other global markets.This is because trading takes place 24 hours a day, 5 days a week (ACM platform works from Sunday 22:00 to Friday 23:00 CET). Financial centers are open for work, and banks and other organizations exchange currencies in different parts of the world for different purposes.

Forex currencies quotation system

Currencies are quoted in pairs, for example – EUR/USD or USD/JPY.
The first currency in the pair is called the base currency and the second is called the counter currency.
The base currency is the ‘basis’ for purchases and sales. For example, if you buy EUR/USD, then you acquire Euros and sell Dollars. You do this if you expect the Euro to grow against the Dollar.
It is also possible for a currency pair to be quoted as USD/EUR, but this method is used extremely rarely.
Each transaction must have 2 sides – a buy and a sell (or a sell and a buy).By this we mean that it is impossible to buy 100.000 EUR/USD and then exchange it for another currency pair (i.e.: EUR/JPY) without closing the first position.
Also please note that no physical currency delivery will be made. For these purposes banks and exchange companies, which specialize in low-rate currency conversions are available.

How does the B/S system work?

As with any market, for each currency pair, there are 2 prices. The difference between them is called the spread.
The spread is measured in points or pips – lowest decimal figure in a currency rate.
For a EURUSD a pip equals 0.0001 (or 10 dollars on 100.000), for EURJPY a pip equals 0.01 (or 1000 yen on 100.000). More information on P/L calculation on the following page: profit and loss.

Buying/Selling - B/S

you want to open a position (i.e.: place an order to sell – to make a profit if the exchange rate falls) you have to choose the amount (i.e.: 100.000 EURUSD) from the drop down menu on the platform and then click the mouse on the sell currency button: SELL (if you want to place an order to buy, you should act in reverse).
This will open a position in the market and you will receive an immediate notification of it on your trading station.
To close an open position, you have to do the opposite of the initial operation – in our case buy the 100.000 EURUSD back.
Different order types also exist to open or close a position under a certain condition.

How does the foreign exchange market work?

The forex market allows you to buy and sell currencies against each other and speculate on the differences in exchange rates.
Making a transaction on the forex market is simple: the procedures are identical to that of any other market so switching to trading currencies is straightforward for most traders.

What is Forex (Foreign Exchange, FX) ?

ACM offers online forex trading services for traders wanting to make speculative transactions on the exchange rate between two currencies.
These rates may be influenced by world economic and political events, currency rate differentials, as well as many other factors including extreme weather conditions (hurricanes), acts of terror etc.
Forex is the largest marketplace in the world with more than 3.2 trillion dollars changing hands daily and so making it one of the most attractive and lucrative markets.

[edit] Exchange Traded Fund

Exchange-traded funds (or ETFs) are open ended investment companies that can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the S&P 500 (e.g., SPY), but recently they are now replicating investments in the currency markets with the ETF increasing in value when the US Dollar weakens versus a specific currency, such as the Euro. Certain of these funds track the price movements of world currencies versus the US Dollar, and increase in value directly counter to the US Dollar, allowing for speculation in the US Dollar for US and US Dollar denominated investors and speculators.

[edit] Option

A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world.

Retail foreign exchange brokers

There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTC and NFA might be subject to foreign exchan scams. At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members

Investment management firms

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Central banks

National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low

Commercial companies

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are ...not widely known by other market participants.

Banks

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.
Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.

Can I send wire transfers in foreign currency?

For USD denominated accounts, GFM accepts funds in multiple currencies. If you send foreign currency to our USD Account, the bank will automatically convert it to US Dollars at an exchange rate specified by them, which will not necessarily be favorable. If you would like to wire funds in euros or Great Britain pounds to fund a USD denominated account, or would like GFM to convert USD to fund a Non-USD denominated account, please contact GFM's operations department at at

To whom should the wire be sent?

Wire transfers in USD should be sent to Global Forex Markets.The wire instructions for domestic and international wires are different. In order to expedite receipt of your wire transfer, please use the appropriate wire instructions.for more information

Back Office Services

Extensive back office services can be provided including: automated trade allocation and reporting, end of month statements, pip and dollar commission reporting, etc.For more information, or for an online demonstration of our trading platform and reporting tool, please contact us through the link below.

Lower Transaction Costs

Last but not least, no commissions or transaction fees are charged; a feature that is particularly appealing to high volume traders. And while you enjoy commission-free trading, we make it easy for you to establish your own cash- or pip-based fee structure for your clients. These fees can be customized on a per client basis as well as by trade definition, and are easily edited at any time.

Consistent Liquidity

Our forex broker's relationships with over a half dozen of the world's top FX banks ensure that we are able to offer consistent liquidity and highly competitive dealing spreads. For traders accustomed to dealing over the phone, a 24-hour market making desk is always available to accept phone orders, up to 100 million or more per trade.

Price Transparency and Fast Execution

In the front office, our forex trading system offers the highest possible level of price transparency via real time streaming forex quotes, and a speed of execution that's unmatched in the marketplace. Professional traders love the consistency of our prices and our fills. When trading with us, the price you see is the price you get - no more worries about slippage or re-quoting.

Experienced Management and Trading Teams

Global Forex Market’s experienced trading team includes experienced stock investors and traders, money managers, investment consultants, trading system designers, and analysts. To maintain our high standard of service for our customers, we use one of the largest, most respected forex brokers in the industry as our clearing firm; the first online forex firm to allow clients to deal currencies directly using real-time, streaming quotes.

RISK DISCLOSURE STATEMENT.

The risk of loss in trading foreign exchange can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. Global Forex Market (GFM) does not control, and cannot endorse or vouch for the accuracy or completeness of any information or advice you may have received or may receive in the future from any other person not employed by GFM regarding foreign currency or exchange. The content herein is provided in good faith and believed to be up-to-date and accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by GFM or its affiliates. Accordingly, we accept no responsibility for any use made of the information provided.

Trading Strategy without Focusing on P/L

For example, a 20-pip profit on a 100,000 Euro trade is $200. For a $5000 account, this is equivalent to 4% of the account equity, compelling the average trader to take their profit, though the trade has a 100-pip profit potential. On the reverse side, no one wants to realize a $200 loss, so traders tend to hold a losing position until the loss is too much to bear. On the Mini account, this same example would translate to $20, which takes all the emotion out of the P/L, since $20 is insignificant to most traders. A Mini account allows traders to focus on the proper chart points, trade signals, and really learn currency trading without paying attention to their $P/L. In the long run, this will lead to more profits and less losses. Until clients are completely comfortable trading currencies on a highly leveraged basis, trading smaller amounts on The GFM Mini is highly recommended.

Develop a Disciplined

The Mini account can be a useful asset in assisting traders to cultivate a disciplined trading strategy without focusing on P/L. When trading larger volumes on the standard account, traders with smaller account balances tend to watch their equity fluctuate and base trading decisions on emotional reactions to these fluctuations. For example, traders tend to resist closing-out trades at a loss, using the rationale that the market will turn around. Traders also tend to immediately take their profits when the market is moving in their direction, rather than maximizing their gains by letting their profits run.

Why Trade a Mini Account?

The GFM Mini account is designed for those new to online currency trading and those with limited investment capital. There is a smaller deposit required to open a GFM Mini account and trading sizes are 1/10th the size of a regular account. The smaller trade size greatly reduces the risk associated with currency trading. Although the GFM Mini account provides as much leverage as a regular account, clients have the opportunity to take smaller size positions, taking on less total risk. The GFM Mini is intended to introduce traders to the excitement of currency trading while minimizing risk.

Accuracy of Information

The content on this website is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to make independent investment decisions. GFM has taken reasonable measures to ensure the accuracy of the information on the website, however, does not guarantee its accuracy, and will not accept liability for any loss or damage which may arise directly or indirectly from the content or your inability to access the website, for any delay in or failure of the transmission or the receipt of any instruction or notifications sent through this website.

Internet Trading Risks

Internet Trading RisksThere are risks associated with utilizing an Internet-based deal execution trading system including, but not limited to, the failure of hardware, software, and Internet connection. Since GFM does not control signal power, its reception or routing via Internet, configuration of your equipment or reliability of its connection, we cannot be responsible for communication failures, distortions or delays when trading via the Internet. GFM employs back up systems and contingency plans to minimize the possibility of system failure, and trading via telephone is always available.

High Risk Investment

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.