76% of retail accounts lose money when trading CFDs with this provider. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Margin calls are mechanisms put in place by your Forex broker in order to keep your used margin secure. Remember, your used margin is allocated by your broker as the collateral for funds borrowed from your broker. A margin call happens when your free margin falls to zero, and all you have left in your trading account is your used, or required margin. When this happens, your broker will automatically close all open positions at current market rates.
Note also that when we begin storing our trades in a relational database (as described above in the roadmap) we will need to make sure we once again use the correct data-type. PostgreSQL and MySQL support a decimal representation. It is vital that we utilise these data-types when we create our database schema, otherwise we will run into rounding errors that are extremely difficult to diagnose!
These articles, on the other hand, discuss currency trading as buying and selling currency on the foreign exchange (or "Forex") market with the intent to make money, often called "speculative forex trading". XE does not offer speculative forex trading, nor do we recommend any firms that offer this service. These articles are provided for general information only.
Trading on a margin can have varying consequences. It can influence your trading experience both positively and negatively, with both profits and losses potentially being seriously augmented. Your broker takes your margin deposit and then pools it with someone else's margin Forex deposits. Brokers do this in order to be able to place trades within the whole interbank network.
Now that we have discussed the longer term plan I want to present some of the changes I have made to the code since diary entry #2. In particular, I want to describe how I modified the code to handle the Decimal data-type instead of using floating point storage. This is an extremely important change as floating point representations are a substantial source of long-term error in portfolio and order management systems.
Retail or beginning traders often trade currency in micro lots, because one pip in a micro lot represents only a 10-cent move in the price. This makes losses easier to manage if a trade doesn't produce the intended results. In a mini lot, one pip equals $1 and that same one pip in a standard lot equals $10. Some currencies move as much as 100 pips or more in a single trading session making the potential losses to the small investor much more manageable by trading in micro or mini lots.
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.
As part of the Universal Account service, we are authorized to automatically transfer funds as necessary between your securities account and your futures account in order to satisfy margin requirements in either account. You can configure how you want us to handle the transfer of excess funds between accounts on the Excess Funds Sweep page in Account Management: you can choose to sweep funds to the securities account, to the futures account, or you can choose to not sweep excess funds at all.
In particular I would like to make the system a lot faster, since it will allow parameter searches to be carried out in a reasonable time. While Python is a great tool, it's one drawback is that it is relatively slow when compared to C/C++. Hence I will be carrying out a lot of profiling to try and improve the execution speed of both the backtest and the performance calculations.
GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.
Multiple Currency Pairs - Similarly we need to support the major currency pairs beyond "Cable" (GBP/USD). There are two aspects to this. The first is to correctly handle the calculations when neither the base or quote of a currency pair is equal to the account denomination currency. The second aspect is to support multiple positions so that we can trade a portfolio of currency pairs.
The script is currently hardcoded to generate forex data for the entire month of January 2014. It uses the Python calendar library in order to ascertain business days (although I haven't excluded holidays yet) and then generates a set of files of the form BBBQQQ_YYYYMMDD.csv, where BBBQQQ will be the specified currency pair (e.g. GBPUSD) and YYYYMMDD is the specified date (e.g. 20140112).
There is one unpleasant fact for you to take into consideration about the margin call Forex. You might not even receive the margin call before your positions are liquidated. If the money in your account falls under the margin requirements, your broker will close some or all positions, as we have specified earlier in this article. This can actually help prevent your account from falling into a negative balance.
Margin requirements for futures and futures options are established by each exchange through a calculation algorithm known as SPAN margining. SPAN (Standard Portfolio Analysis of Risk) evaluates overall portfolio risk by calculating the worst possible loss that a portfolio of derivative and physical instruments might reasonably incur over a specified time period (typically one trading day.) This is done by computing the gains and losses that the portfolio would incur under different market conditions. The most important part of the SPAN methodology is the SPAN risk array, a set of numeric values that indicate how a particular contract will gain or lose value under various conditions. Each condition is called a risk scenario. The numeric value for each risk scenario represents the gain or loss that that particular contract will experience for a particular combination of price (or underlying price) change, volatility change, and decrease in time to expiration.
For securities, the definition of margin includes three important concepts: the Margin Loan, the Margin Deposit and the Margin Requirement. The Margin Loan is the amount of money that an investor borrows from his broker to buy securities. The Margin Deposit is the amount of equity contributed by the investor toward the purchase of securities in a margin account. The Margin Requirement is the minimum amount that a customer must deposit and it is commonly expressed as a percent of the current market value. The Margin Deposit can be greater than or equal to the Margin Requirement. We can express this as an equation: