Forex Specs

Forex specifications incorporate the individual contract details and the conditions under which they can be traded.

Margins – the amount of your equity required to open a trading position.

Spreads – the difference between the bid and ask price for a currency pair.

Swaps – the interest rate calculation representing the cost or reward of holding open positions overnight.

Pip Values

A pip is the smallest incremental movement of a currency pair. The table shows the value of a pip when quoted in the normal 4 decimal place configuration.

Majors, Minors and Exotics

Majors are the primary traded currency pairs in the Forex market. Often they will be quoted against the USD as is market convention, in these terms the USD is the base currency. Liquidity is deep and spreads are tight giving excellent short, medium and long term trading opportunity. Trading in majors accounts for over two thirds of the total estimated volume in Forex.

Minors are lesser traded or secondary currency pairs, generally these instruments have less liquidity but are still traded heavily in the financial markets. They will also include crosses, a term for currency pairs that include major traded currencies against each other but without the USD as the base.

Exotics are currency pairs not widely traded, or derive from emerging markets. Exotics still provide trading opportunity but spreads are often wider and so less attractive to high frequency intraday traders. Interest rate differentials can be greater and will often attract trading based around favourable swaps.

Calculating Profit and Loss

MetaTrader will calculate your profit or loss and display it for each open and closed trade reflected in the currency in which you hold your account. It is important to be able to work out your own projected profit and loss which can be relatively easy to do, even without a calculator using the table on this page.

Buy 1 Lot EURUSD at 1.4723
Buy (+) €100,000 Sell (-) $147,230
Sell 1 Lot EURUSD at 1.4796
Sell (-) €100,000 Buy (+) $147,960Sell (-) €100,000 Buy (+) $147,960
= +$730

In this case the trade was profitable $730, the same calculation can be made in pip terms.

1 Lot EURUSD pip value = $10
Buy at rate 1.4723
Sell at rate 1.4796
73 pips profit at $10 per pip
= + $730

Please note:

1. All our transactions are structured like a CFD; therefore they are cash settled and do not result in the delivery of the underlying currencies or commodities.
2. Trading hours are non stop from Sunday 23:00 CET until Friday 23:00 CET.
3. The minimum transaction size is 0.01 contract (micro-lot). By mini- and micro-lot trading, all conditions remain the same, including spreads.
4. To utilise trailing stops you must be logged in to your MT4 platform.