Welcome to our e-Book

Table of Contents
1. Trading platforms ............................................................................................................................. .......... 2
2. What can PROfit users trade? ………...................................................................................................... 3
3. What is Forex? …………………….................................................................................................................... 3
4. Characteristics of CFDs ………………........................................................................................................ 4
5. How to read currency quotes for FX pairs ......................................................................................... 6
6. Major currency pairs .................................................................................................................................. 7
7. What is a Pip? ................................................................................................................................................ 7
8. What is Leverage/Margin?....................................................................................................................... 8
9. Risks associated with CFDs …………...................................................................................................... 9
10. Four main types of orders in the CFDs Market ........................................................................ 10
11. Introduction to trading platforms and execution.................................................................... 12
12. Technical Analysis ................................................................................................................................ 25
13. Fundamental Analysis ......................................................................................................................... 34
14. Glossary..................................................................................................................................................... 35

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 1. Trading platforms
PROfit is our in-house developed platform which we offer as a web version as well
as an iPhone/iPad application, with full trading functionality.

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 2. What can PROfit users trade?
The answer is currency pairs, commodities, stocks, Indices and virtual currencies, via
CFDs. PROfit users can buy or sell any of the above and get paid or pay the difference of
the price between the time of opening their position and the time when they decide to
close it.

3. What is Forex?
It is the simultaneous buying of one currency and the selling of another. Currencies are
traded through a broker and are always traded in pairs. To explain it further, think of it as
buying a share of a particular economy. When we decide to buy the USD, we are essentially
buying a share in the US economy. The price for the USD is a reflection of what the markets
thinks not only of the current health of the US economy but also of its future.
The Foreign Exchange Market is also referred to as Forex, FX, Spot FX or plain Spot. It is one
of the fastest growing financial markets globally. With over $5.3 trillion being traded daily it
can be easily assumed that it is the biggest financial market. All stocks and futures markets
combined only add up to one third of the daily Forex market.

The Forex market is not a place, unlike the stock exchanges around the globe. It is a system
available online where people and institutions can access and benefit from global
decentralized trading of international currencies.

In order to facilitate international trading and investing, the Forex market enables
currency conversion. The Forex market also enables speculation in the value of currencies,
therefore making it possible for anyone, anywhere, to trade using their own computer and
benefit from the fluctuations in the prices.

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 4. Characteristics of CFDs
A contract for difference (CFD) is a financial
instrument that allows traders to invest into an
asset class without actually owning the asset. The
CFD is a contract between two parties (the buyer
and the seller). It states that the seller will pay the
buyer the difference between the current value of an
asset and its value at “contract time”. If the
difference is negative, the buyer pays the seller
instead.
Trading in CFDs can potentially give high returns but at the same time it can be extremely
risky. There are certain conditions to follow before trading in CFDs.
Firstly, one must have knowledge of the trends, the basics of trading and risk management
ability.

A good reason to consider CFDs trading is the fact that there are frequent fluctuations in
CFDs. Fluctuations or volatility, as we refer to it in the market is the movement of the value
of the underlying asset. This movement whether positive or negative can potentially benefit
the trader as long as the trader accurately predicts which of the two scenarios will be taking
place at the time he or she wishes to trade. You gain if the fluctuation favors you and you
lose if the fluctuation is against you.

Liquidity is another reason why CFDs trading is so popular.

In CFD trading, you can achieve high returns if your initial investment is on a lower side but
that comes with a high amount of risk. This is thanks to financial leverage (please refer to our
Glossary for details).
Even though leverage allows you to open bigger size positions with little investment, the
bigger the position size and the higher the leverage, the more the risk you are undertaking
because a small fluctuation in the price can wipe out your initial investment, as it can
potentially give proportionately large profits in the opposite case.
Most great businesses are connected to the world of internet today, and CFD trading is no
exception. You can deal in CFDs right from your home. In fact, it is fully conducted online.
You have the liberty to choose when you want to trade, and you don’t need to meet any
deadlines. Basically, you can be your own boss.

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Here is a list of reasons why CFDs trading has become one of the most popular money
making opportunities recently:

Market trading hours are Sunday (from 10:00 GMT) evening to Friday (10:00
GMT), 24 hours trading for most of the assets offered and traders can always find
markets and assets open for trading 24/5.

The CFDs market is well known for its high liquidity, which means that you can buy
and sell currency pairs every second.

Limit orders can be set in all assets such as Entry Orders to purchase a
currency pair, Stop Loss and Take Profit orders.

Leverage, which gives you the ability to trade with a minimal margin value and to
open with a much larger face value.

Generate profits from both rising and falling markets. As a trader, you can buy/sell a
CFD asset that you believe will get stronger / weaker.

Because of its size and its participants, the CFDs market is very difficult to be
controlled and manipulated.

All assets are good for technical analysis provided there is historical data, no
exceptions.

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 5. How to read currency quotes for FX
pairs
It is also good to understand the means by which the currency conversion is expressed, and
how to read currency quotes. Remember currencies are always traded in pairs. An example
of this is EUR/USD. The comparison is usually made in a ratio known as the cross-rate. In
this configuration, the two currencies are listed in as EUR/USD, with the EUR position
referred to as the base currency. The base currency is the first currency in the pair and it is
usually expressed as 1.0000, and the USD, in this example representing the secondary
currency, is expressed as the decimal that most closely matches the based currency rate.

Every time we perform an action by buying or selling a currency we do so by performing

the action on the base currency. For example, in EUR/USD, if we expect the EURO to go
higher we will buy it against the USD. This means that we are simultaneously selling the
USD.

If we expect the EURO to drop in value we will sell it against the USD, therefore
simultaneously buying the USD.

You are only required to either buy or sell the base currency and the simultaneous
transaction is implied.

The smallest fraction, or decimal, in which a currency can be traded, is called a pip and this
is usually the degree to which a cross-rate is expressed. For example, the EUR/USD is at
1.000/1.3243. This means that for every EURO I can get 1.3243 USD

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 6. Major currency pairs
There is a range of different pairs you can trade in the CFD market; however, most of the
action is seen in the major pairs. The major pairs tend to have the highest liquidity as
well.

EUR/USD

USD/JPY

GBP/USD

USD/CHF

USD/CAD

AUD/USD

You can trade any other available pair through your broker, and you can chose a pair that
includes your local currency if you are more comfortable doing so. The majors tend to have
more volatility and liquidity which add up to more reliable trading conditions for the
average trader.

7. What is a Pip?
A pip is a small measure of change in a CFD. It can be measured in terms of the quote or in
terms of the underlying currency. A pip is a standardized unit. It is the smallest amount by
which a currency quote can change, usually being 0.0003 for currency pairs (except for
JPY, and all other classes of instruments such as commodities, indices and stocks, which are
measured as 0.03).
Before giving some examples on how to calculate pip value, we should state that for any
USD- based account and USD-quoted currency pairs (Direct Rates) such as EUR/USD,
AUD/USD, GBP/USD, every pip value for one lot (1 lot for FX pairs is 100,000 base
currency amount) is equal to $30.

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 8. What is Leverage/Margin?
Leverage is a powerful tool for CFD traders. Leverage is the ability to trade much bigger
positions than the amount you initially deposited. It can also be explained as the amount of
money you are allowed to borrow from the broker when you open a position. Simply, a
trader can open bigger positions with less money. For example, if leverage is set at 1:200,
that means that you can trade 200 hundred times your money.

However, higher leverage also exposes you to higher risks if the market fluctuation is to
your disadvantage. To better manage such situations, traders can use leverage wisely and
take advantage of platform safety features such as “Stop Loss” and “Take Profit”.

Margin is the deposit or the collateral required to open or maintain a position, whereas
available margin is the amount available to open new positions. Margin is always expressed
as a percentage. The higher the leverage, the less margin % is required to invest. For
example:

Leverage Margin Amount Required Margin

Traded
1:1 100% $100.000 $100.000
1:2 50% $100.000 $50.000

1:50 2% $100.000 $2000

1:100 1% $100.000 $1000

1:200 0.5% $100.000 $500

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 9. Risks associated with CFDs
Like most investments out there, CFDs carry a high level of risk. Besides, no risk
usually equals no reward!

This risk can be managed if the trader takes the time to develop a successful system.
Developing a system can be simple enough. One of the most important aspects of a healthy
system is the control of two basic human emotions. Fear and greed! A trader should be
disciplined enough to not allow fear from stopping them. The other side of this coin is
greed. A trader needs to learn how to set exit points and stick to them. If you predetermine
that 5% return is good enough for today then stick to it! Take your profits even if the
market is looking like it is going to continue in your favor. Please bear in mind that any
profit or loss in any open position is not realized until the position is closed.

Your broker offers multiple tools on your platform to help you manage risk!

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 10.Four main types of orders in the
CFDs Market
There are many types of orders which traders can place to trade in the Forex market.

Market Order
The market order is the most simple and common type of order. Here, the trader buys and
sells the asset at the rate prevailing in the market at the time of placing the order. Due to
the huge size of the market and the high volatility, trends can reverse any instant, so
traders usually prefer placing orders at the market price to guard themselves against any
adverse trend.

Limit order
In this case, the trader specifies a price at which he/she may wish to buy or sell the CFD.
Suppose a trader has bought GBP against the USD at 1.9710, then the trader can place a
sell order at 1.9725, when the exchange will execute the order and the trader will profit
from it. The order will get cancelled if the target price is not achieved during the day.

Stop loss order

Due to the volatility, stop losses are essential. They determine the maximum loss a trader is
willing to suffer. Suppose in the above instance, the risk-taking ability of the trader is low,
then the trader may place a stop loss at 1.9705, at which level the exchange will book losses
for the trader, and he/she will not be affected by any fall below 1.9705.
Take profit order
At the same time, suppose that the trader is happy to exit the market at a rate of 1.3725 and
he/she considers the profit from this move to be adequate. The trader may place a take
profit order at that level and lock in profits if that level is reached by the price action.

Entry order
Such an order is filled only when certain predefined user conditions are met in the market,
which the order specifies. The entry order can be a limit entry order or even a stop entry
order. The entry order can be a buy or sell limit entry order or a buy or sell stop entry
order. What the trader can predefine is the price level of entry either above or below the
current market price and choose direction buy or sell. At the same time the trader can
choose to apply stop loss or take profit to be exercised after the entry order becomes a
market order at opening of the position. Remember the position will only be opened if the
predefined quote level is reached by the price action. If it doesn’t reach that level the order
can remain indefinitely active (Good till cancelled) or it can be terminated after a user
defined period of time (Good till value).

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Limit entry order
As an example, let’s assume that the current market price for GBP/USD is 1.9705-10. This
implies that the trader can transact at these levels. Here, a trader can put a limit entry
order to sell his/her holdings at a price more than the market price, say, 1.9715. The
order would be executed only if that price is attained. In the similar manner, he can place
an order for buying at a level of, say 1.9700, and his ‘buy’ order would remain pending
until the price falls to that level.

Stop entry order

Such an order is generally used when the trader has sufficient grounds to believe that the
CFD asset is trading in a fixed range and believes that it is on the verge of a breakout from
that range. The trader might want to buy at a price higher than the market price or sell at
a lower price than the market price. In the same example, the trader may go ahead and buy
at 1.9720 or sell at 1.9690, where the trader believes that once these levels are attained,
the currency will only go up or fall further, as the case may be. A trader exercises the stop
entry order only when a trader has reasonable grounds to believe that there will be sharp
movements in the CFD rates.

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 11.Introduction to trading platforms
and execution
The PROfit trading system is easy to use for traders of all levels and is available on Apple
store and Google Play. So now you can trade on the go anywhere, anytime!

This is the web based platform:

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 Using the Web Based PROfit Platform

Login to WebPROfit
1. Click the Login button from the website.

2. In the Login window, enter your username and password.

3. Click Login; the list of your accounts is displayed.

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4. Select the desired account and click Launch; once you have signed in, the following
operational window will be displayed:

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 Order Types
Market Orders: Opening positions in Confirm Mode

The Confirm mode enables you to confirm each position you open before its final execution.
Market orders can be placed via the Quotes Box Button or Quotes List.

Quote box button option:

Quote list option:

To place a Market Order

1. Click on Buy or Sell to execute the market order at the current price; the Open
Position window is displayed.

2. In the Amount list, select or type the size of your trade.

3. Click OK to confirm; the position opens and the Info window appears confirming
your action.
4. Click OK or to close the Info window

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Market Orders: Opening positions in One Click Trading Mode

When you want to monitor market movement and make trades quickly, you can use the 1-
Click Trade mode. The 1-Click Trade mode allows you to open a position without
confirmation, in one click. After you define your trading mode as the 1-Click trade mode the
Quotes panel is modified as follows:

In the List view, a new Amount column appears.

In the Box view, a new button appears in the right corner of the Buy and Sell
buttons, and the amount list is displayed:

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To open a position in 1-Click mode, follow one of the following methods:

1. Choose the amount

2. Click on Buy or Sell

3. The Position will be opened without asking to confirm

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Closing Positions
WebPROfit provides you with several ways to close your positions. You can close positions
one by one, or several positions at once. You can also close all your positions in one action.

To close a position: Method 1

1. Click on Open Positions window; all open positions will be visible in the window.

2. Tick the box next to the position/s you wish to close.

3. Click on Close Position button.

4. Click OK; the selected position is closed and the Info window appears confirming
your action.

5. Click OK or to close the Info window.

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To close a position: Method 2

1. In the My Portfolio panel, under the Open Positions tab, double click on the position
you want to modify. Alternatively, you can select the desired position and click the
“Details” button: the Position Details window opens.

2. In this window, click the Close at “rate” button; the Confirm window is displayed.

3. Click OK; the selected position is closed and the Info window appears confirming
your action.

4. Click OK or to close the Info window.

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 Stop Loss and Take Profit Orders

Stop Loss Order

You can use the Stop Loss order to limit your losses by making your positions automatically
close if the price moves in a direction different to what you expected. You can place a stop loss
order to close your trade at a specified amount or at a specified rate which is different from
the current market price. The Stop Loss order is below the current market price in a buy order
and above the currency market price in a sell order.
For example, if you open a buy position 10,000 of EURUSD at $1.6560, you can set a stop order
at $1.6450; this is 110 pips below the current market price. Therefore, if the market goes
against you and the market price drops dramatically, then your position is automatically closed
once the market rate reaches $1.6450. If you go short on the pair (sell the pair), then the stop-
loss order would be placed at a price higher than the current market price. You have to
remember that in certain situations stop loss and take profit may not be triggered at the
desired level due to a market effect called slippage. Slippage is when an order is filled at a
price that is different than the requested price. This can happen during high impact news
announcements or over the weekend if an event affects the price of the traded instrument.
Slippage however can be both positive and negative. It is important to bear in mind that stop
loss limits cannot always protect you from losses; there may be a rapid price movement or
market closure for example, which could result in your stop order not being attained.

To place a Stop Loss Order

1. Click the Buy or Sell button.

2. In the Open Position window select or type the size of your trade.

3. From the Limit Type drop down list, choose SL/ TP; the Open Position window is
expanded as follows:
4. Check the Stop Loss checkbox; the rate range is displayed.

5. Select Parameters.
6. Click OK; the SL/TP order is placed and the Info window appears.
7. Click OK or to close the Info window.
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Take Profit Order

You can use Limit Orders to protect your positions in the event of unexpected
circumstances. The Take Profit Order guarantees that your trade will be closed if the
target price that you quoted is reached. The limit is placed above the current market price
in a buy order and below the current market price in a sell order.

Let’s say that you open a buy position of GBP/USD at $1.4550. You place the limit order at
$1.4600, which is 50 pips above the current market price. Thus, if the market rate goes up,
your position is closed automatically. As a result, you will exit the market with the desired
profits. On the other hand, if you go short on the pair, then the limit order would be placed
below the current market price.

To place a take Profit Order

1. Click the Buy or Sell button.

2. In the Open Position window select or type the size of your trade.

3. From the Limit Type drop down list, choose SL/ TP; the Open Position window is
expanded as follows:

4. Check the Take Profit checkbox; the rate range is displayed.

5. Select Parameters.
6. Click OK; the SL/TP order is placed and the Info window appears.
7. Click OK or to close the Info window.

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Entry Stop Order

The Entry Stop order is used if you wish to enter the CFDs market at a lower price than
the current one (or a continuation of the current trend). The price is higher than the
current market price if you are buying, and lower if you are selling.

For example, the current market price of the EUR/USD currency pair is $1.5600. At a higher
market price of $1.5900, you believe that the price will continue rising. On the other hand,
if this price is not reached, then you believe that it will fall. As a result, you would only want
to buy the EUR/USD position if the price hits $1.5900. Therefore, you place an Entry Stop
Buy at $1.5900.

Placing an Entry Stop

1. Click the Buy or Sell button the Open Position window is displayed. In this window,
in the Type drop down list, choose Entry Order; the Open Position window is
expanded to the Open Entry Order window.
2. From the Amount list, select or type the size of your trade.
3. In the Order text box, type the execution rate of your entry order.
4. Specify the expiration date of your entry order by using the Good Till Value option.
5. Click OK; the entry order is placed and the Info window appears to confirm your
action.
6. Click OK or to close the Info window.

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One Cancels the Other (OCO) Orders

OCO orders are a combination of two orders. Thus, two orders are placed: one above and
one below the current market price. When one trade is activated, the other one is canceled.
For example, if the AUD/USD pair is trading at $0.9100. However, you are not sure which
direction that the trade will go next. Therefore, an OCO order is placed to buy is placed at
$0.9200 and an OCO order sell is placed at $.9000. By employing this strategy, as soon as
one of these prices is triggered, the second trade is canceled whilst another one is
activated. As one order is executed, the other is canceled by the system.

Placing an OCO Order

1. Click on Buy/Sell Option

2. In the Open Position window choose the Limit type option and then select Entry
Order.

3. Select OCO Parameters and Make Sure You Select OCO under Limit Type

4. Click Ok to confirm the OCO order.

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Removing an Entry Order

WebPROfit provides you with several ways to remove your Entry Orders that haven’t been
executed yet. You can remove them one by one or several at once. You can also close all
your entry orders in one action.

To remove a single Entry Order

1. In the My Portfolio panel, under the Entry Orders tab

2. Double click on the order you want to modify. Alternatively, you can select the
desired position and click the “Details” button: the Entry Order Details window
opens.

3. Click OK; the selected entry order is removed and the Info window appears
confirming your action.
4. Click OK or to close the Info window.

To remove several Entry Orders

1. In My Portfolio panel, under the Entry Order tab, select the checkboxes next to all
entry orders you want to remove.
2. Click the Remove Order button; the Confirm window is displayed.
3. Click OK; the selected order is removed and the Info window appears confirming
your action.
4. Click OK or to close the Info window.

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 12.Technical Analysis
In order to analyze the market and perform correct due diligence, a trader needs to use
Fundamental and Technical analyses.

Technical analysis focuses on the study of the price movements or price action through the
use of charts for forecasting future price trends.

The philosophy behind technical analysis is that the market action takes into account all
known and unknown information. Price action has a tendency to move in trends and
therefore we may be able to predict future trends because history repeats itself.

Chart Types
Line Chart

Bar Chart

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Candlestick Chart

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 Chart Patterns
Chart patterns are created when prices are graphed on charts. Chart patterns can be used
to identify either a continuation or a reversal of current market trends. Being able to
identify some of these patterns is an important part of the technical analysis.

Bearish (SELL) Patterns

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Bullish (BUY) Patterns

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 Support & Resistance

Support and resistance are one of the most commonly used concepts in technical
analysis. These should be examined as zones-areas and not as absolute numbers.

As you can see, this zigzag pattern is making its way up (bull market). When the market
moves up and then pulls back, the highest point reached before it pulled back is now
resistance. As the market continues up again, the lowest point reached before it started
back is now support. In this way resistance and support are continually formed as the
market oscillates over time. The reverse is true for the downtrend.

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 Major Indicators

Another method to perform technical analysis is the utilization of technical indicators.

These are some of the most commonly used indicators:

RSI (Relative Strength Index): The Relative Strength Index or RSI determines overbought
or oversold conditions in the market- whether a currency is considered expensive or cheap
relative to historical price levels. It is measured in a scale from 0 to 100. Readings below 30
indicate that the security is oversold (cheap), while reading above 70 shows that the
security is overbought (expensive).

Bollinger Bands: Bollinger Bands are used to determine market volatility. Therefore, this
tool can help us determine whether the market is active or fairly quiet. When the market is
quiet and transaction volume is low, then the bands contract, and when the market is swift
and trading volume is high then the bands expand.

MACD (Moving Average Convergence Divergence): MACD is an abbreviation for

Moving Average Convergence Divergence. The tool is used to identify a new trend by using
moving averages. Our main priority is to find a new trend at the beginning when moving
averages cross each other. You will usually see 3 parameters regarding MACD settings.

The first parameter indicates the number of periods that are used to calculate the fast
moving average.
The second parameter indicates the number of periods used to calculate the slow
moving average.
The third parameter is the number of periods used to calculate the moving average
of the difference between fast and slow moving average.

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 13.Fundamental Analysis
Fundamental analysis in CFDs is a type of market analysis which involves studying for
example the economic situation of countries to trade currencies more effectively and to
determine the factors affecting supply and demand for specific currencies. Fundamental
analysis involves news, events, and reports being released (an example is the US non-farm
payroll).

Economic Calendar
An Economic Calendar features the major economic indicators release dates and is created
by economists who predict different economics figures and values according to previous
months / years. The Calendar on our website also includes the indicator's
definition / purpose and level of importance. Please note that fundamental analysis requires
in depth knowledge and high degree of understanding of economic conditions of a currency,
index, commodity or stock.

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 14.Glossary
Account: A record of all transactions. When you decide to trade you will open an account
with a broker. When you log in your account you will be able to access the market and all
history of all transactions ever executed in this account.

Account Balance: The amount of money in the account. This includes any amount of
money deposited in the account, plus all profits made, minus all losses.

Ask: The price at which the buyer is prepared to buy at.

Bear: An investor who believes the price of the market will decline. Being “bearish” means
that you expect the price of a currency/stock/commodity etc. to go lower. In this situation
if you wish to trade you would SELL TO OPEN a position.

Bid: The price at which the seller is prepared to sell at, the price offered for a
currency.

Broker: An individual or firm that acts as an intermediary, putting together buyers and
sellers usually for a fee or commission; In contrast, a `dealer` commits capital and takes one
side of a position, hoping to earn a spread (profit) by closing out the position in a
subsequent trade with another party.

Bull: An investor who believes the price of the market will rise. Being “bullish” means that
you expect the price of a currency/stock/commodity etc. to go higher. In this situation if
you wish to trade you would BUY TO OPEN a position.

Candlestick Chart: A chart that indicates the trading range for the day as well as the
opening and closing price. If the open price is higher than the close price, the rectangle
between the open and close price is shaded. If the close price is higher than the open price,
that area of the chart is not shaded.

Closed Position: This is an exposure in FOREX that no longer exist. (The process to close a
position is to sell or buy a certain amount of currency to offset an equal amount of the open
position. This will 'square' the position.) It is very straight forward most platforms have an
option to simply CLOSE the position.

Contract: The standard unit of trading.

Cross Rate: An exchange rate between two currencies. (The cross rate is said to be non-
standard in the country where the currency pair is quoted. For example, in the US, a
GBP/CHF quote would be considered a cross rate, whereas in the UK or Switzerland it
would be one of the primary currency pairs traded.)

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Currency Pair: The two currencies that make up a foreign exchange rate (For Example,
EUR/USD). Remember that currencies are always traded in pairs.

Fundamental Analysis: Analysis of economic, financial and political information with the
objective of predicting future movements in a financial market.

Hedge: A position or combination of positions that reduces the risk of your primary
position. Hedging usually involves the buying and the selling of the same currency pair.

High/Low: Usually the highest traded price and the lowest traded price for the
underlying instrument for the current trading day. The high is seeing as the resistance
level. This means that there is a certain resistance and that the currency has not moved
higher than the particular price. The opposite goes for the low. We usually refer to the
lowest point as the support. The support appears to be the lowest point the price has been
within a given amount of time.

Leading Indicators: Economic variables that are considered to predict future economic
activity (i.e., Unemployment, Consumer Price Index, Producer Price Index, Retail Sales,
Personal Income, Prime Rate, Discount Rate, and Federal Funds Rate). We can find
leading indicators announcements in the economic calendar section of the web based
platform.

Leverage: The ratio of the amount used in a transaction to the required security deposit
(also referred to as margin). Leverage is one of the biggest advantages of Forex. Please
refer to our website for the leverage limits we offer.

Limit Order: An order with restrictions on the maximum price to be paid or the minimum
price to be received. This allows a trader to enter the required information on the platform
and walk away! An account manager will show you how to access limit orders and how to
use them.

Liquidation: The closing of an existing position through the execution of an offsetting

transaction. It can also mean the point at which the account has insufficient funds and
all open positions are closed out automatically by the platform.

Liquidity: The ability of a market to accept large transactions with minimal to no impact
on price stability.

Long/Short Position: A position that appreciates in value if market prices increase

(when the base currency in the pair is bought, the position is said to be long. A position
that depreciates in value if market prices decrease when the base currency is the pair
sold, the position is said to be short. In essence, to go long is to BUY and to go short is to
SELL.
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Lot: A unit to measure the amount of the deal (the value of the deal always corresponds to
an integer number of lots).

Margin: The required equity that an investor must deposit to collateralize a position.

Market Maker: A dealer who regularly quotes both bid and ask prices and is ready to
make a two-sided market for any financial instrument.

Market Order: An order to buy/sell at the best price available when the order reaches the
market.

Open Position: An active trade with corresponding unrealized P&L, which has not been
offset by an equal and opposite deal.

Order: An order is an instruction, from a client to a broker to trade. An order can be placed
at a specific price or at the market price. Also, it can be good until filled or until close of
business.

Pips: The term used in CFDs market to represent the smallest incremental move an
exchange rate can make. (Depending on context, normally one basis point, i.e., 0.0001 in the
case of EUR/USD, GBD/USD, USD/CHF and .01 in the case of USD/JPY and all commodities,
stocks and indices).

Position: A position is a trading view expressed by buying or selling. It can refer to the
amount of a currency either owned or owed by an investor.

Premium: In the markets, it is the amount of points added to the spot price to
determine a forward or futures price.

Profit/Loss (P&L): The actual "realized" gain or loss resulting from trading activities on
closed Positions, plus the theoretical "unrealized" gain or loss on Open Positions that have
been Mark-to-Market.

Quote: An indicative market price; shows the highest bid and/or lowest ask price available
on a security at any given time.

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Resistance: A term used in technical analysis indicating a specific price level at which a
CFD asset will have the inability to cross above. Recurring failure for the price to move
above that point produces a pattern that can usually be shaped by a straight line. \

Risk Management: To hedge one's risk one will employ financial analysis and trading
techniques.

Short: To go `short` is to have sold an instrument without actually owning it, and to hold a
short position with expectations that the price will decline so it can be bought back in the
future at a profit.

Short Position: An investment position that benefits from a decline in market price (when
the base currency in the pair is sold, the position is said to be short).

Spread: The difference between the bid and offer (ask) prices; used to measure market
liquidity (Narrower spreads usually signify high liquidity).

Stop Loss Order: An order to buy/sell at an agreed price (one could also have a pre-
arranged stop order) whereby an open position is automatically liquidated when a
specified price is reached or passed. With this order the aim aim to limit losses at an
amount that each trader can bare to lose for a specific position.

Take profit order: An order to buy/sell at an agreed price (one could also have a
prearranged take profit order) whereby an open position is automatically liquidated
when a specified price is reached or passed. With this order the aim to secure profits
at an amount that each trader feels satisfied to acquire for a specific position.

Support Levels: A technique used in technical analysis that indicates a specific price
ceiling and floor at which a given CFD rate will automatically correct itself (opposite of
resistance).

Technical Analysis: An effort to forecast prices by analyzing market data, e.g., historical
price trends and averages, volumes, open interest, etc. A trader can utilize charts to
perform technical analysis.

Volatility: A statistical measure of a market or a security's price movements over time,

calculated by using standard deviation (associated with high volatility is a high degree of
risk).

Volume: The number, or value, of securities traded during a specific period.

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