The technical implementation of Forex trading is very different depending on the broker. Some brokers allow spot trading, others construct CFDs between itself and its customers. However, the decisive contract features are always the same. Forex contracts are traded in Lots: A standard lot is about 100,000 units of base currency. The base currency is in the usual listing of currency pairs the left-traded currency (USD / GBP z. B. the USD). Some brokers allow trading mini lots (10,000 units) and micro-lots (1,000 units). The forex contract size refers to the leveraged market value.
1. The forex contracts in connection with the margin
The traded forex contract size is decisive for the initial margin (the margin required to open a position). The initial margin is a percentage of the position value. In a standard lot in USD / GBP and a margin rate of 1.00 percent, it is therefore $ 1,000. If the trading account maintained in EUR is calculated the margin of the margin rate and the exchange rate. A big advantage of currency trading is in the continuous trading without expiration dates. While CFDs based on futures reallocated regularly in the nearby contract (rolled) must be, forex contracts can run principle unlimited. However, traders have to pay financing costs.
Conclusion: The size of the Forex Contracts plays in forex trading an important role when it comes to the amount of the initial margin. This is specified as a percentage of the position value and calculates the margin rate and the exchange rate. It is the biggest advantage of Forex trading is that currencies unlike CFDs without an expiration date can be traded — merely incurred financing costs.
2. CFD trading or forex trading? What are the differences?
Technically and legally can have quite significant differences forex contracts. A broker can offer its customers set up foreign currency accounts and there actually posted held currencies, so that at least in theory, a physical delivery entitlement. Likewise, the Broker for each position opened between itself and its customers a contract for difference (CFD) can create, representing claims on cash. These two variants do not have to be related to the market model of a broker. An ECN broker can forward the orders of its customers to the ECN and perform there in his own name and then create a CFD. In CFD trading is even common practice, although then enters stock exchange in place of the ECN. Trader possibility to track their orders in the order book (the stock exchange or ECN) live and make them not in their own name.Conversely, creating a market maker Spot accounts and bill based Private courses. Therefore, the type of contract design says nothing about the quality of the broker and the courses. In practice it is sometimes difficult to get the exact construction of forex contracts in effect. Operates a forex broker as a market maker, CFDs or commercial contracts with cash settlement agreement is the most likely scenario.
Conclusion: Forex contracts can partly show great differences: For example, the broker’s customers set up a foreign currency account and there won held currencies, or does it open for each item a contract for difference (CFD). Amongst these measures, the market model of the broker plays a major role: The provider can either act as market makers, while allowing their own courses or grant its customers as DMA / ECN broker itself access to the liquidity pool.
3. The most popular Forex trading platforms in the focus
In the context of forex contracts, the trading platform of the broker plays an important role, since the amount of forex contracts is defined here usually. Once you have realized a successful trading strategy as the trend strategy or the outbreak strategy developed, are available at most suppliers of MetaTrader 4, his successor, the MetaTrader 5, the Trader Workstation 4.0 and at best also a web platform as the Sirix WebTrader choice. The best known, and not least the most popular is probably the MetaTrader 4 be, with many traders should be familiar by now. The MetaTrader 4 has been released by the company MetaQuotes already in 2005 and was since then established with its many available features and its professional user interface on the market and prove one of the most customer-friendly trading platforms.
Here, the MetaTrader 4 scores primarily by its extensive and professionally designed user interface and by the large number of integrated indicators and Chartingtools. Finally convinced, the best trading platform and through their Expert Advisors (EAs), which enable the user to develop automated trading systems using the language MQL itself. Most of our Forex broker comparison represented brokers offer the MT4.
How to determine the contract size in MetaTrader 4?
It is not difficult to determine the contract size in MetaTrader 4: 1. Right click on MarketWatch and «symbol» 2. Select the same financial instrument 3. Click on «Properties» select 4. In the «Contract size» the preferred contract size specify traders should note in step 4, that the information in the «Contract size» indicate how many contracts are traded, if you enter 1.0 in the «Volume». If you only a fraction of 1.0, then is also a corresponding fraction of forex contracts.
In the development of MetaTrader 5 MetaQuotes has apparently worked primarily on the principle of «Never change a running system» and processed much of the MetaTrader 4 also in his successor and refined. In addition, however, this distinctive feature also of MetaTrader 5 with new functions, including for example an insight into the order book is one that was not yet available at MetaTrader. 4. In addition, the programming of own trading systems using the language MQL was further simplified and a wider choice of indicators and Chartingtools was integrated in the MetaTrader 5. While now also a «Sell Stop Limit» and «Buy Stop Limit» were established traders but to give up the opportunity to operate hedging and to accept the fact that the MetaTrader 5 is not yet available due to the large conversion effort for many brokers ,
In which brokers is MetaTrader 5 available?
To facilitate the search for traders who would like to act on the MetaTrader 5, we provide a list of all brokers who so far enable trading on the new trading platform or offer him at least in the near future:
- Admiral Markets
The Trader Workstation: A professional alternative
The Trader Workstation is one of the most popular trading platforms of Trader as they made not only by an intuitive and user-friendly interface, but also by its reliability and stability. The Trader Workstation comes with a variety of different features and applications, which facilitate the users worldwide trading of various financial products with the support of numerous order types, algorithms and high-efficiency trading tools. It is functionality when using the trading platform in the first place, which is available for both Mac and Windows and Linux generally.
Conclusion: In the meantime, many different trading platforms on the market are available, but the most successful online broker based generally on the three «founding fathers» of the software range: MetaTrader 4, his successor, the MetaTrader 5 and the Trader Workstation. Each of these trading platforms distinguished by different assets, which are designed for different types of traders.