In terms of trading, leverage is borrowed capital that allows you to increase your potential profits or losses. In Forex a common leverage amount offered is 100:1, meaning that for every $1 you have you can control $100 in equity.
Margin is the collateral you must keep in your account to maintain a leveraged position.
Open A Forex Trading Account
Opening a trading account with an Australian Forex Broker is an easy process that can typically be completed within a matter of minutes. To open an account with a forex broker there are three main steps:
To open an account, you will need to provide your full name, nationality, email and phone number. Once you’ve completed these and set up a password you will typically be asked to choose the type of account and the trading platform, as well as your base currency. You will also be asked for your country of tax residence and tax details (TFN for Australians). Typically, providing specific tax information such as TFN is not compulsory. Brokers will also ask if you are a politically exposed person. The final personal information you must provide is your contact information, including your full address and how you would prefer to be contacted
The next section is financial information. Here you must provide your employment status information, annual income bracket and liquid net worth. Once you are through this section, the broker will ask your about your trading experience (Years) on securities, options, commodities, futures, CFD’s and OTC Forex Exchange, and if you understand the risk of margined transactions.
The client questionnaire assesses whether your knowledge of CFD’s is suitable for opening an account.
A margin call is a demand from the broker for the client to deposit funds to meet margin requirements for open/closed positions.
A short sell is a position where the trader anticipates the price of an instrument to decrease, and sells a borrowed asset to buy it back in the future.
A long position is a buy position, where the trader anticipates the price of an instrument to increase.
This is a test, all systems go!
An indicator is something that assists traders finding where to enter and exit trades. An indicator could be calculated like a moving average or RSI or a drawn support/resistance level.