Brokers use margin levels in an attempt to detect whether FX traders can take any new positions or not. Different brokers have varying limits for the margin level, but most will set this limit at 100%. This limit is called a margin call level. Technically, a 100% margin call level means that when your account margin level reaches 100%, you can still close your positions, but you cannot take any new positions.
If you believe that a currency pair such as the Australian dollar will rise against the US Dollar you can place a buy trade on AUD/USD. If the prices rises, you will make a profit for every point that AUD appreciates against the USD. If the market falls, then you will make a loss for every point the price moves against you. Our trading platform tells you in real-time how much profit or loss you are making.
Robust Strategies - I have only demonstrated some simple random signal generating "toy" strategies to date. Now that we are beginning to create a reliable intraday forex trading system, we should start carrying out some more interesting strategies. Future diary entries will concentrate on strategies drawn from a mixture of "technical" indicators/filters as well as time series models and machine learning techniques.
If traders are positive on the prospects for the Yen, they would expect the number on the right to go down – i.e. the Yen would be getting stronger against the Dollar. Traders would be buying less Yen with a Dollar as the Yen got stronger. Similarly, if the Yen was expected to weaken, forex traders would expect the Yen number to go up, reflecting the fact that the dollar could buy more yen.