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Basic trading

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A shopkeeper takes profit by purchase of cheaper materials and sales of value added products. In the same way, the investment pursues to make money by the price difference between purchase and sales. Forex trading enables you to sell the relevant currency in advance if you are afraid that it will drop down.

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Limit order

The limit order is defined as a kind of orders regarding to condition. You have to specify the forex rates at which you want to sell or buy in case of adverse movement of your intention. Moreover, you have to specify the validity period, for example, "Let it be Day order" or "Watch it good till cancel". In all cases, don't forget to cancel the orders.

Market order

The market order is defined as a kind of orders regarding to condition. You can sell or buy the forex currencies at the present forex rates on the screen. Unlike you remain unknown the execution price till the product is actually dealt in the exchange, you can choose whether to trade or pass in the forex market if you don't feel like trading just at the quotation.

Two way quotation

The forex market is the representative OTC market and it is quite different from the exchange traded markets like stock market. If you want to trade forex, you have to require the price quotation to others. The player who is required to quote has to make a bid rate and an offered rate at the same time. This market practice is called as two way quotation, and the gap between the bid rate and offered is as spread. The central point of such a spread is not always correspondent to the market rate. The price quoter would often slide the price to some extent where he feels risky. Needless to say, the narrow spread benefits the player who want price quotation.

 

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