UNDERSTANDING

THE BASICS OF TRADING

UNDERSTANDING THE BASICS OF TRADING
What is Forex?

Forex (or FX) is short for Foreign On Forex markets, you do not actually
Exchange market. The fundamental idea purchase the currency. You simply make a
prediction: X currency will gain value over Y
is to exchange one currency for another currency in a given time.
to gain profit.
Traders make educated guesses by
If you exchanged currencies before, you analyzing the economy, past trends and
know that as a result of the exchange major expected events. This process is
you either gain or lose money. It called ‘trading forex’.
depends on how one currency gained The more technical term is trading
more value than the other since your Contracts for Difference (CFDs). We will
purchase. learn more about CFDs other than FX later.

BASIC FX TERMS
Currency Pair : Quotation of one currency against another. The most common pair is the
Euro and US Dollar: EURUSD. The first one is called the Base Currency., while the second
is called the Quote Currency.
CFD : Contract for Difference

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 Forex Trading How to Trade FX
Trading Forex is all about observing the currency pairs and Traders sign up with online trading brokers such as
their respective values over one another. If you can predict the FairMarkets to trade in FX market. Brokers provide
direction of the market, you make profit. It’s simple as that. avccess to trading platforms.
The most commonly traded pair is Euro and U.S. Dollars. They Traders start live accounts, deposit investments and
are shortened as EUR and USD. Let’s use it as an example: then open positions. Since trading with margin is
possible in FX markets, brokers offer leverage to their
Judging by the current economic developments, an FX trader
clients. This means you can trade up to 400 times more
believes EUR will gain value over USD today. So, they take a than your actual investment.
position in the forex market and invest. If the market moves in
the expected direction, they will profit. If not, they will lose. In other words, you use margin to create leverage
when trading.

BASIC FX TERMS
PIP: Point In Bid Price: For Ask Price: For Spread: The Margin: Minimum Leverage: Ability
Percentage. how much how much difference in amount of funds to trade larger
It’s the smallest you can sell a you can buy a buying and you need to positions than
amount of currency pair. currency pair. selling prices. trade. your actual
change in a account balance.
currency pair.

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HOW TO START AN FX ACCOUNT
Before starting to trade, it is advised to practice your skills with a free demo
account. Once you grasp the basics, you can start trading with your live
account immediately.
Demo Account
A demo account has virtual currency Start by filling out our quick form on
and poses no risk to your actual the registration page.
capital. You don’t have to deposit to Select “Open Your Account” and
start practicing. proceed to the secure client area.
Click here to sign up for an account Once you decide if you want to
and practice or start trading right away,
follow the steps below: follow the process and finish your
application. Either way, you will
receive your login details for trading
platform via e-mail shortly.

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 How to Install Trading Platforms
Start by downloading the trading Feel like trading on-the-
platform you chose while signing up. go? Download the apps to
You have a wide range of options mobile devices instantly!
your
here: Either download the desktop Once the software is ready on
version or use your browser as the your device, login with the details
user interface. you received from us via e-mail.

METATRADER
MetaTrader (MT) is a common, efficient and easy-to-use trading platform.
FairMarkets provides you access to both MT4 and MT5 platforms.

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Hold on to this information as you Your trade transaction log is seen
will need it if you ever login on a new below the chart. Notice that your
device. account balance reflects the
Once logged in to your demo account, selected amount for this demo
account. Your orders and free
you will see currency pairs on the margin – the percentage of deposit
left-hand side with live quotes. On the you need available to trade – will
right panel, you will see a chart. be visible here.
Right clicking (or long tapping on
You are all set for practice trading
mobile) will give you options to tweak with FairMarkets!
this dashboard.

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 Trade example
This is your trading page. Go ahead and If you clicked SELL and the price kept
familiarize yourself with the menus and buttons. going down, you will notice that you are
To learn more about using the platform, please profiting. In the opposite case, you would
visit our Videos section for tutorials. see a negative value. Either way, you can
For the purpose of this demo, we will simulate close your position anytime you want.
trading EURUSD, one of the most traded FX pair. Alternatively, you could place a new order
Notice that there is a downwards trend for the with certain conditions. Click the icon in red
square or long-tap the graph and you will
past hour. This means the market is currently
see a more detailed order menu.
bearish and the traders are mostly selling rather
than buying. Notice that you can set certain conditions
Top left corner of the graph shows you current for your order. Thinking the price will
increase? Place a buy order with a target
buying and selling prices for positions. The 0.01
is the lot, your trading volume. price using Take Profit. To minimize
possible losses, set a Stop Loss function.
If you were to click either SELL or BUY here, the
system will first ask permission for ‘One-click When you’re ready to close your position,
Trading’. right-click or long-tap the order and ¬select
‘Close Position’.
After your confirmation, you will start trading
immediately. You will open a position based on Congratulations! You have just traded
the current market price, joining the millions of Forex!
other traders in the market.

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Crunching the numbers
Example for Buying (Going Long) Example for Selling (Going Short) When should you buy/sell?
Let’s say you deposited 5000$ You have 4,000 USD in your CFD markets such as Forex are
in your account. You entered the account. You opened a sell always volatile and unpredictable.
market when the price for EURUSD position with one lot (100,000 There is no clear ‘winning formula’.
is 1.11000. You buy one lot (100,000 units) at 1% margin (100:1 leverage). Experienced traders develop
units) with Euro at 1% margin (100:1 Currently EURUSD is at 1.2000. So, their own systems over time by
leverage). We set aside 1,100 USD in we set aside 1,200 USD in your studying the market and using
your account to open this position. account to open this position. With analytics tools. FairMarkets
With leverage, your lot is now leverage, your lot is now worth customers enjoy a wide variety of
worth 110,000 USD while trading. 120,000 USD. As you predicted, assistance tools to make informed
Meanwhile, you have 3,900$ free the price decreased and EURUSD decisions.Check our selection of
margin left in your account. As you is now 1.18000. You close the tools, analytics and newsletters to
predicted, the price increased and position and make 2000$ profit. gather more information about the
EURUSD is now 1.12000. You close Your profit is immediately reflected market.
the position and make 1000 $ profit. to your balance. You get back Alternatively, you can check
Your profit is immediately reflected to your initial deposit of 1,200 USD. our PAMM platform where
your account balance. You get back Now you have 6,000$. If you kept experienced traders securely
your initial deposit as well. You now the position open overnight, you share their strategy with investors
have 6,000$. If you kept the position will pay and earn interest for both while sharing their profits. This is a
open overnight, you will pay and currencies as a result. smart solution for traders who lack
earn interest for both currencies as a experience or time to trade Forex
result. Because you borrowed EUR regularly.
and lent USD.

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 How to deposit
To trade in the Forex markets, you need to Once the process is complete, your
provide a certain amount of margin. You can balance will reflect the change. Also, you will
deposit the amount you want to trade into receive a confirmation mail from us shortly.
your Fairmarkets account easily. Got comfortable trading on a demo account
Login to your Secure Client Area (SCA) by by now? Then it’s time for a live run!
clicking “MyFairMarkets” on our home page. Login to your trading platform with your live
Deposit page greets you with several account details and join the millions of FX
traders. The process is exactly the same as
options for topping up your account. demo trading.
Choose your method and proceed with the
payment. The quickest method is using a Got questions? Contact our experts via Live
Bank/Credit Card. Chat, phone or e-mail 24 hours!

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TRADING WITH FAIRMARKETS
We value your business and do our best to become your innovative, long-term
trading partner. We provide bonuses, advanced trading and analytics tools to
equip you for the challenges of the market.
Top reasons why you should start your trading journey with us:

Ultra-tight Wide Range of Innovative BVI Regulated Lightning-fast Customer

Spreads Products Technology Broker Execution Support 24/5

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WHAT ELSE IS OUT THERE?
While Forex is the most popular form of CFDs, we offer numerous other products to our clients. Producsts
such as Equities, Indices and Commodities are great ways to diversify your portfolio and minimize your
investment risks.
Equities
Indices Commodities
Also called Shares or Stocks, An index is a group of company Traders looking for less
they represent a percentage shares traded together. volatile products enjoy trading
of a publicly listed company. Grouped shares gain and lose commodities such as gold, oil,
Similar to Forex, you can value together as shares of big gas or cotton.
trade Equities as Contracts companies usually set the pace Global events, weather
for Difference (CFDs) on our and value.
platforms. conditions and major economic
Fairmarkets offers you a top developments determine
You do not actually buy the selection of over 20 baskets prices of these products which
shares of these companies. You such as DAX30, NAS100 and tend to keep their trends more
simply take a position in the SP500, either spot or in futures straightforward compared to
market, saying “These shares contracts form. unpredictable markets such as
will increase/decrease in value Forex. We offer a wide range of
in a given time period.” This commodities from oil and silver
way, you can make profit even to cocoa and coffee! To see
if the shares are actually losing the full list of our products and
value. benchmark prices, please check
our Market Information Sheets.

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