FAQ

Forex which stands for Foreign Exchange Trading is a global market for trading currencies. As there is no central marketplace, currencies can be bought and sold internationally. The Forex market is the largest and most liquid sector of the financial market currently yielding USD1.9 trillion per day.

The Forex consists of around 5000 trading bodies including reserve banks, large international banking institutions, commercial companies and brokers. Trading centres are located in London, New York, Tokyo, Hong Kong, Singapore and Paris.

As there is no central market location, Forex trading operates on a 24 hour basis. Trading takes place electronically between two parties via a dedicated internet platform or by telephone. Currency is usually traded in pairs, i.e. USD/Euro, USD/JPY, Euro/JPY, GBP/CHF, and CAD/USD. You get 'short' in one currency and 'long' in the other one.

The opportunity for profit is based on the constant fluctuations that occur between currencies. Even minimal changes can produce a substantial gain because of the high amounts of money invested in each trade. Individual investors can trade using ‘leverage’ capital. For example, a leverage ratio of 100:1 allows a trader to control USD100, 000. There are substantial risks involved, however, to protect both the dealer and the trader there are built in risk management tools available to help minimize losses.

The Forex trade starts at financial centres in Sydney and moves on to Tokyo, London, and then New York. Trading is available at any time.

Forex is a high risk market. Losses can be substantial, although risks can be minimised by applying responsible trading strategies. We recommend that traders new to Forex practice with a free demo account until they gain enough knowledge and confidence to open a live account.

Additional tools and indicators are available online including, streaming financial news, charts, graphs and pivot points which all help a trader to choose the optimum time to enter or exit the market. Forex traders can enjoy success if they learn to manage their risk effectively.

Generally, you should not risk capital that you cannot afford to lose.

Forex trade moves on a daily basis unlike conventional stocks which are often retained for years. The objective of Forex trading is to profit by predicting the short term movement in currency exchange values.

Major currencies that participate in the Forex market represent countries with low inflation, stable governments, and responsible central banks. These currencies include the Australian and Canadian Dollars, Euro, GBP, Japanese Yen, Swiss Franc and US Dollar.

No, there is no central Forex exchange. Since trading is transacted between two counterparts, the FX market is an inter-bank, or over the counter (OTC) market.

Traditionally, FX trading was conducted between central, commercial and investment banks only. Now, the Forex retail market is developing rapidly to include international money managers and brokers, multinational corporations, registered dealers, options and futures traders and private investors.

ACFX requires a minimum deposit of 50 USD to open an Individual account. You can choose to transact highly leveraged trades (as high as 500:1 leverage ratio).

You set up the degree of leverage that you wish to use. Generally, your leverage level is set at the most moderate level required by your account size.

Note: This degree of leverage helps you to maximise your profit potential, however, this is matched by an equal risk potential for loss.

The economic and political climate influences currency pricing. Interest rates, inflation rates and political stability all contribute. Governments can trade in the Forex market and influence the traded value of their currencies.

Also, very large orders can cause extreme volatile swings in currency prices.

Margin is a performance bond that insures against potential trading losses. Margin requirements in FX trading permit you to hold positions greater than the asset value of your account.

Prior to trading with ACFX a pre-trade check for margin availability is carried out. The trade is processed subject to the availability of sufficient margin funds in your account.

Our trading system calculates cash on hand needed to cover current positions and this information is available to you in real-time.

If funds in your account fall below margin requirements, the system will automatically close all open positions. This added protection effectively prevents your account from falling below your available equity.

The most frequently used risk management tools in Forex trading are stop-loss and limit orders. The stop-loss order automatically liquidates a position at a chosen price.

This prevents any possible movements against the position beyond the chosen level. A limit order sets the top price an investor wants to pay for a trade. Both these protective orders are easy to execute.

Traders should consider the prevailing economic conditions and take into account the various financial reports and analysis available. Technical traders rely on trends, support and resistance levels in conjunction with analytical data to identify trading opportunities.

Significant unexpected events can drive price movements such as a sudden change in interest rates or a major political crisis. Often it is the expectation of an event rather than the event itself that influences price movement.

Traders take short positions to sell currency which they anticipate will drop in price. In this way, the investor profits from the decline. Long positions are taken when a trader buys a currency at a low price with the intention of selling it later for a higher price.

These moves allow the investor to gain from changing market prices. As currencies are traded in pairs, every Forex position requires the investor to go short in one currency and long in the other.

Intraday positions refer to all positions opened at anytime during the 24 hour period before the close of our business trading hours at 22.00 GMT.

Overnight positions are positions that are still on after our usual trading hours. These are automatically rolled over by us.

Generally, trading is influenced by the prevailing market conditions. Some traders might trade several times in one day.

This decision is at the client's discretion and they should be familiar with our charges before trading actively.

This is generally determined when sufficient profit has been gained from the position, a stop/loss order is automatically implemented or the trader wants to liquidate the present position to take advantage of another opportunity.