Forex FAQs

• What is margin?
• What is margin level?
• What is scalping?
• What time does Forex trading open and close?
• How does ADVANCED-FOREX handle overnight positions?
• What happens if, during the overnight/weekend period, there is a price gap, will a pending order still be executed at the specified price?
• Are there any situations when the spread will increase?
• What are conditions surrounding Gold and Silver Trading?
• What are the minimum dealing amounts for ADVANCED-FOREX accounts?
• On the internet, I keep seeing references to DD and NDD. What do these terms refer to?
• What is a Market Maker?
• Is ADVANCED-FOREX a market maker?
• Is ADVANCED-FOREX an ECN (Electronic Communication Network) broker?

RELATED QUESTIONS:

• What regulatory body is ADVANCED-FOREX supervised by?
• Where does market news come from?

ACCOUNT RELATED QUESTIONS:

• Do clients pay fees on a deposit when opening an account?
• How does one withdraw their funds?
• Is there a minimum amount of trades a customer must do?
• What is the procedure for switching from one account type to another?
• Is it possible to keep an account open with no funds?

TECHNICAL QUESTIONS:

• How do I troubleshoot problems with the Advanced Trader platform?
• How do I empty my Java cache?
• Why is there sometimes a difference between prices on ADVANCED-FOREX's charts and the prices provided in the Live Trading windows?
• Is the Mobile Trader Platform compatible with the Blackberry and iPhone?

Q: What is margin?

A: The word margin, in financial trading, essentially describes a deposit that is used as collateral for taking a position in the market. Thus, trading with margin allows traders to basically open one or more positions on credit – increasing the client's buying power. ADVANCED-FOREX allows clients to use 100:1 leverage, thus requiring a 1% margin requirement (for tickets up to $30M) See Spreads and Conditions for more details.

The maximum a client may buy on "credit" and the minimum he must maintain as collateral is referred to as the “amount of leverage”. Dividing 1 by 100, the minimum margin requirement is found to be 1% [converted to a percentage]. If a client were allotted 50:1 or 25:1 leverage, the maintenance margin levels would be 2% and 4% respectively.

Q: What is margin level?

A: The consideration of one's available margin is determined by the ratio of one's total exposure, open profit or loss and equity on a trading account is the “margin level”. If a client were trading with 100:1 leverage, he or she must maintain a margin level above 1%. If this level was to fall below the 1% threshold, all open positions and orders will be closed immediately.

The reasoning behind this automatic closure is that the client has exceeded his available leverage and is unable to satisfy the margin requirement. Under this system, the client's account will never be overdrawn (incur a negative balance) even under volatile, fast-changing market conditions. In the event a force majeure and a negative balance, the client's account would be zeroed out, so a client will not at any time owe the market money.

To calculate margin:
Account Balance +/- Open Profit/Loss x 100 = Margin Level
Absolute Positions in USD

Example:
Trader X is long 6 standard lots of USDCHF. His account balance is $20,000 with an open loss of $1000.
20,000 USD - 1000 USD x 100 = 3.17% Margin Level
600,000 USD

Q: What is scalping?

A: This terminology refers to a trading system that attempts to quickly enter/exit the market, catching small, profitable price movements. A scalping strategy can range from a few trades a day to thousands. ADVANCED-FOREX allows clients to trade as they wish – there is no dealing desk intervention.

Q: What time does Forex trading open and close?

A: The Forex trading opens on Sunday at 23.00 and CET closes on Friday at 23.00 CET.

Q: How does ADVANCED-FOREX handle overnight positions?

A: Overnight positions held, are automatically rolled over to the next trading day. The cost of carry for holding a position overnight may either be a credit or debit to the client's account, depending on the assets and direction of their positions. ADVANCED-FOREX's overnight rates are acquired from interbank swap rates. For more information, please see Overnight Positions.

Q: What happens if, during the overnight/weekend period, there is a price gap? Will a pending order still be executed at the specified price?

A: ADVANCED-FOREX will execute your order at the best available price. Should a market gap occur, the order will be triggered with the market open and executed as close to the specified price as possible.

Q: Are there any situations when the spread will increase?

A: As ADVANCED-FOREX does not make the market on currency pairs, our clients are unable to have fixed spreads. Spreads may increase in times of extreme market volatility or lack of liquidity. However, ADVANCED-FOREX connects to more liquidity providers in North America and Europe than any other STP broker. This added liquidity keeps advertised spreads reasonably consistent and reduces the risk of spread widening.

Q: What are conditions surrounding Gold and Silver Trading?

A: ADVANCED-FOREX offers spot Gold and Silver trading against the US dollar. The pairs are represented on the forex trading platform similar to currency pairs: Gold – XAU/USD Silver – XAG/USD. Spot Gold/Silver trading is available to ADVANCED-FOREX clients during liquid hours, from 0730 - 2230 CET, Monday-Friday. The standard dealing amounts are 100 ounces for Gold and 5000 ounces for Silver. On Mini Accounts, the minimum trade sizes are 40 and 2000 ounces respectively.

Q: What are the minimum dealing amounts for ADVANCED-FOREX accounts?

A: To trade FX, standard accounts will only trade in lots of 100k - Mini accounts may trade in smaller lots of 10k.

Q: On the internet, I keep seeing references to DD and NDD. What do these terms refer to?

A: DD stands for Dealing Desk and NDD for No Dealing Desk. A Dealing Desk firm is also known as a market maker, sometimes abbreviated MM.

Q: What is a Market Maker?

A: A Market Maker is a dealer who provides prices directly to the client and is prepared to buy or sell at these rates. Often, firms that make markets for their clients may provide extremely tight spreads or no spreads at all. The negative significance of these firms is that the company serves as the other side of their client's trades, thus giving them a vested interest in the client's profits or losses.

Q: Is ADVANCED-FOREX an ECN (Electronic Communication Network) broker?

A: No. ADVANCED-FOREX digitally clears our client's trades with liquidity providers. An ECN broker electronically matches client's trades with other clients taking opposite positions. Similar to an ECN, ADVANCED-FOREX's revenue is generated from the spread; however with ADVANCED-FOREX, major institutions act as the counterparty and not other clients. Our business model provides more liquidity than the ECN model, giving the client better execution conditions in trending markets.

ADVANCED-FOREX RELATED QUESTIONS:

Q: What regulatory body is ADVANCED FOREX supervised by?

A: ADVANCED-FOREX's global operations are supervised by the Swiss Financial Market Supervisory Authority – FINMA. ADVANCED-FOREX's Middle East offices are further regulated by Emirates Securities and Commodities Authority. ADVANCED-FOREX's offices are audited by Ernst & Young.

Q: Where does market news come from?

A: ADVANCED-FOREX's market news is provided by Dow Jones News Wires and Bloomberg International. ADVANCED-FOREX also offers FX Insider to live clients. This feed is linked directly into the Advanced Trader platform and the information is provided by our Strategy Desk, led by Peter Rosenstreich.

ACCOUNT RELATED QUESTIONS:

Q: Do clients pay fees on a deposit when opening an account?

A: Banks may charge wire transfer fees, however ADVANCED-FOREX does not charge fees for client deposits nor withdrawals. It is important to ask your bank what their applicable fees will be when initiating a wire transfer.

Q: How does one withdraw their funds?

A: Withdrawel of funds can be achieved by emailing the Back Office (info@advanced-forex.com). Each request must provide their full name, phone number, e-mail address and account number. Once the Back Office has received the request and all security checks are in order, the client will receive the money by standard wire transfer to his or her account. In accordance with Swiss Anti-Money Laundering practices, ADVANCED-FOREX will only send funds to a registered account under the client's name or business.

Q: Is there a minimum amount of trades a customer must do?

A: No. ADVANCED-FOREX charges no inactivity fees nor penalizes customers for their trading habits.

Q: What is the procedure for switching from one account type to another?

A: Clients may change their account type by sending an email to the Back Office (info@advanced-forex.com). Upon request they must provide their full name, phone number, e-mail address, account number and the change they'd like to make.

Q: What is the possibility of maintaining an open account with no fund balance within it?

A: A client may withdraw ALL his funds without penalty. This would, in effect, flag the account as inactive although the account will remain open until the client decides to reinvest with ADVANCED-FOREX or close this account.

TECHNICAL QUESTIONS:

Q: How do I troubleshoot problems with the Advanced Trader platform?

A: The Advanced Trader platform is a Java-based program. If the forex trading platform is unusually slow or a problem occurs, often this is because the client's Java Cache is overloaded; many programs/websites store information on a person's computer within their cache. To quickly resolve this issue, a person must simply clean out their Java cache.

Q: How do I empty my Java cache?

A: Windows: First, click on the start menu and open your Control Panel. Within the Control Panel, switch to "Classical View" and select the icon titled Java. Under the "General" tab, you will find a section titled "Temporary Internet Files". Click on the "Settings..." button.

The following "Temporary Files Settings" window will open, and then click on the "Delete Files..." button at the bottom of the window.

Another window called "Delete Temporary Files" will open, make sure both options are selected and click OK.

B: Mac: Open the Java Control Panel. In the "General" tab, you will find a section called "Temporary Internet Files". Click on the "Delete Files..." button.

A window called "Delete Temporary Files" will pop up, select all 3 options and click OK.

Q: Why is their sometimes a difference between prices on ADVANCED-FOREX’s charts and the prices provided in the Live Trading windows?

A: ADVANCED-FOREX's charting data is provided by an independent 3rd party, unlike other parties. The prices on the charts do not show all the highs and lows of the markets and can loosely be considered the average price that ADVANCED-FOREX is able to offer. The ADVANCED-FOREX graphs do not show the prevailing spread at a given time, while showing the highest Bid and lowest Offer.

Q: Is the Mobile Trader Platform compatible with the Blackberry and iPhone?

A: Yes. ADVANCED-FOREX’s mobile platform is compatible with all internet-enabled mobile devices. ADVANCED-FOREX does provide a separate platform specifically design for iPhone usage.

 

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Advanced-forex is a professional financial intermediary, which our counter parties are directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, Advanced-forex provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which Advanced-forex finds reliable and accurate, but Advanced-forex does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. Advanced-forex cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute Advanced-forex analysis as of the data and are subject to change without notice. Advanced-forex does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.