TRADING INFO

Trading is an activity that, as mentioned, can hide risks. For this reason, FXORO's advice is to thoroughly understand the dynamics and tools before starting.

Once you have created your basic trading culture you need to choose one regulated trading platform. Here, depending on the trader's level of experience, you can open an operational account or a DEMO account. As we will see later this solution is ideal for learning the main concepts related to trading in the field.

After having opened an account and done the right practice with the DEMO account, it is possible to make the first deposit and start the actual trading phase, negotiating on CDFs on indices, actions, currencies, commodities and cryptocurrencies.

Trading is a fast-growing activity among finance enthusiasts. This is because many traders are attracted to the earning possibilities. However, we often forget how this activity hides very specific risks, which it is necessary to know and not underestimate to activate an informed trading action.

The first concept to start from is that online trading represents a high-yield speculative investment and, you know, where there is the possibility of a high yield, there are also higher risks.

The first risk to keep in mind is that related to scams. It is not uncommon to come across brokers who are unauthorized or offer easy-to-earn automatic trading. Our advice is to always turn to regulated brokers, such as FXORO, which complies with the regulations of the CySEC.

Another obvious risk is the market risk, which is the possibility of losing the money invested. This risk manifests itself above all when operating with financial leverage, a mechanism that on the one hand allows you to move large capital with a small investment of money, but on the other can cause large losses.

Many are wondering if it is possible to eliminate trading risks. If for the first risk, that linked to scams, it is sufficient to rely on a regulated broker, for the second, the market risk, it is a risk that persists. This is because, by nature, financial markets are unpredictable and cannot be controlled. The problem can only be circumvented with the experience, study and correct perception of the opportunity / risk ratio that is the basis of trading activity.

Trading platforms are tools that have allowed investors to be able to make investments online.

Thanks to these software it is possible to invest comfortably from home, through your PC and in full freedom of action, without intermediaries with whom to interface.

Obviously, as explained above, trading platforms are a tool that must be used in full awareness of the risks that can be hidden in investing on the market.

The most famous and well-known trading platform is MetaTrader 4. MetaTrader is downloaded from the Broker's website where you decide to open an account in the same way when you decide to open an account through FXORO.

Traders have an incredible tool at their disposal to start mastering financial instruments without losing money. This is the DEMO account, a type of account offered by all the most important brokers on the world scene that allows the investor to trade using a virtual currency.

Thanks to the DEMO account, a trader can adopt one of the main qualities to trade consciously: experience. The possibility of investing virtual currency, in fact, allows you not to play with the actual capital and, consequently, to eliminate the risks of its loss.

With DEMO accounts it is possible to operate on all financial instruments typical of trading, namely CFDs on Forex, commodities, cryptocurrencies, indices and shares.

However, anyone who thinks that the DEMO account is only an initiation dedicated to novice traders is wrong. There are also many professionals who use this type of account, especially when they have to test new investment strategies.

CFD trading is one of the most popular investment methods for traders all over the world. CFD is the acronym for Contract for Difference. The Contract for Difference is a derivative instrument that allows the trader to trade on a market without buying or selling the underlying asset. This means that the investment focuses only on hypothesizing the price trend of a financial market (which can increase or decrease).

CFD trading therefore focuses on the difference in price and can be performed on different markets, such as an index, currency, stock or commodity.

CFD trading assumes the issuance of a CFD contract by a broker. The trader can buy the CFD by paying the broker a spread, which is the difference between the Purchase Price and the Sale Price.

Like all investments, trading on CFDs also has its advantages and risks. Here they are in detail:

1. Financial leverage: also called leverage, this is a mechanism that allows the trader to increase his exposure to risk without the need for additional capital. In a nutshell, it is as if the trader asked the broker for a loan to open a position, with the possibility of maximizing both the income and, of course, the risks associated with the performance of the asset purchased.
2. Long and short: with CFDs it is possible to open both long (buy) and short (sell) positions, which means that the trader can bet on both an uptrend and a downtrend.
3. Breadth of investment: with CFDs it is possible to invest in all the main world markets and in all the main assets: shares, stocks, crypto, commodities.

1. Leverage: Just as leverage can lead to huge amounts of gain, at the same time it could cause heavy losses. Let's take an example: let's imagine investing € 10,000 and, thanks to leverage, control a capital of € 100,000. The leverage mechanism provides that any loss of 1% on € 100,000 corresponds to a loss of 10% on € 10,000 invested.
2. High Costs: CFD trading costs are typically higher than with classic stock trading. Among these stand out the so-called Overnight commissions, the commissions that are charged to the trader when he keeps a position open for several days.

What are the markets on which it is possible to trade? The most complete brokers, such as FXORO, offer their users the possibility to invest in the Forex, commodities, indices, ETFs and Cryptocurrencies markets (with CFDs). Let's analyze them in detail:

Every CFD that is based on Future contract has an expiration date, as per the following table. The Clients are able to close their CFD positions until the expiration date stipulated in the table above. All open future contract CFDs Positions which are not closed by the customer before reaching their value date, will be automatically rolled over by the Company to the next contract’s value date. Any existing pending orders placed on that instrument will be automatically removed.

Upon effectuating such rollover, the Position’s open P/L (Profit / Loss) will express the price difference between the expired and new contract prices, as well as include a mark-up spread. All the associated Limit Orders levels shall be automatically adjusted according to the new future contract price.

MARKET ORDERS. A Market Order allows the trader enter the market immediately but in the case the market becomes very volatile, there is no guarantee that the order will be executed.
FXORO re-quotes orders if they have not been filled, therefore in the case the order has not been filled at the required price, the order will be re-quoted.

LIMIT ORDERS. A Limit Order allows the trader to enter the market at some time in the future and is filled at the price requested or might even be better in some occasions than the one requested.

STOP ORDERS. Stop Orders guarantee execution, but not a particular price. Due to volatility, a stop order might get filled at a different price than the one requested and this is referred to as slippage.

SLIPPAGE. Slippage is usually seen during periods of extremely high volatility and generally occurs during key news releases or during off market hours and occurs both in the different markets. It may be impossible to execute an order at the requested price. In this event, FXORO has the right to execute the Stop Loss Order at the first available price (“Slippage”) based on the nearest possible price. This does no affect the “Negative Balance Protection” policy therefore ensuring the trader never to owe more than what has been invested.

This is a legally binding policy which guarantees that our customers’ accounts could not go into minus, so traders will never lose more than they’ve invested, even in cases of extraordinary volatility.

FXORO developed a cutting edge technology allowing their traders to get to an exposure coverage down to 0 and therefore be able to trade till they have enough equity in their account. If for any reason the customer is exposed to more than what he invested, FXORO should bear the loss from the execution done in the market to the Zero Value Margin level.

After three (3) consecutive months of non-use (“Inactivity Period”) of the trading account, an inactivity fee will be deducted from the Customer’s trading account, by the end of the inactivity period. The fee should be taken from customers without open positions who didn’t trade for 3 months (3 months from the time they closed their last position). For the first three consecutive inactivity periods, the Company shall deduct the fee of 25 EUR/GBP/USD/CHF (depending on the customer’s relevant currency based account), per inactivity period. For the fourth consecutive inactivity period, the Company shall deduct a yearly inactivity fee of 100EUR/GBP/USD/CHF (depending on the customer’s relevant currency based account).

Therefore, for every year that the account remains inactive, the Company shall deduct for the first three inactivity periods, the fee of 25 EUR/GBP/USD/CHF (depending on the customer’s relevant currency based account) per inactivity period and by the end of the fourth inactivity period, the Company shall deduct a yearly inactivity fee of 100EUR/GBP/USD/CHF (depending on the customer’s relevant currency based account).

The fee will be discontinued the moment the account is no longer deemed inactive, following new trade order for example. The deductions will be executed until the account balance is zero. There will be no charge if the free balance is zero. Accounts with a zero free balance may also be closed.