Trading features. Currency Options for Deposits, Features of currency trading.

1. FEATURES OF CURRENCY TRADING:
Currency is called money of the country and selling and buying is called currency trading. Almost
every
country has its own currency. Some of these are very popular like U.S dollar, British pound, the Euro
and
Japanese yen. Those currencies that are popular in the market, their volume and liquidity are higher
in the market. This higher volume attracts investors, traders, banks and governments. You can use
different ways for trading currency, even some people who are non traders, are also familiar with
some
of them. For example, when one person goes on a trip of one country, he needs currency of that
country
for different payments and that’s why he exchanges the currency. For the transaction like this, you
can
take help from the broker of that currency. But this type is not good for professional traders and
that’s
why they use two other types of currency trading.
The most popular way of trading currency is Foreign Exchange. In this type of market rate is
exchanged
between two currencies. You can exchange any currency but the most popular is Euro to US dollar.
Trading in these markets is done globally. You can do your job 24 hours. You can take start from
Monday
morning in New Zealand and Sunday night in U.S. The work of forex markets is different from other
day
trading markets. Two traders can access with each other with the help of broker. It means exchange
rate will be different in each country and of each broker. The amount used in forex exchange is called
a lot. Its size depends on forex broker and usually its lower limit is $25000. This amount is higher for
an
individual and that’s why they borrow from their brokers.
Future exchange rate of two currencies is called currency futures and the contract is called future
contract. The most popular future currency is Euro and it is exchanged against US dollar. These
markets
are available for 24 hours from Sunday to Friday and these are used globally. A contract is set
between
two parties with the help of broker in which all things are mentioned clearly. The financial basics of
both
forex markets and currency futures are the same but there are some differences of your own choice.
Large amount is needed in forex markets.
HOW TO CALCULATE SIZE OF THE CURRENCY TRADE MARKET?
Currency market is also called Forex market and it has different and fixed tick sizes. It is difficult to

2. calculate movement and trade value in a currency market but there are some ways to calculate it.
We
observe two movements in it, tick size and tick value. Smallest possible price change is called tick size
and smallest change of value in it is called tick value. The tick size in each currency is fixed while tick
value is different and it depends on the amount of currency being traded in the market. The tick size
will
be 0.0001 in each currency and tick value sometimes is decided by the brokerage. There are some
rules
and regulations of the currency trade market and risk involve in it and it should be 1% according to
risk
management calculation.
For example if you have $40000 then your maximum acceptable risk will be $400.
The amount of currency that you want to trade in the market is called trade size and it should be
minimum $1 or same in pound or Euro. Trade size can be calculated with the help of tick size,
maximum
acceptable risk and size of the stop loss. For example if you want to calculate trade size or amount of
money then calculations will be as under. The formula of the trade size will be
Account size/100/stop loss size/tick size=Trade size
If a person is trading Euro to US Dollars with the balance of $10000 and stop loss is 10 ticks then
$10000/100/10/0.0001=$100,000
Another example for the calculation of trade size will be
If a person is trading from Euro to US Dollars with a tick size of 0.0001 and stop loss is 10 ticks and
the
maximum acceptable risk is $700 then the trade size will be
Trade size=$700/10/0.0001=$700,000
In this way you can calculate amount of currency being traded in the market.
The process of calculating trade size is not difficult when trading will be in same currency but it is
difficult to calculate when it is traded in two different currencies then amount of capital will be
converted in the currency being used. Then formula will be as under
Trade size= Account size/100/stop loss size (in ticks)/tick size*exchange rate