Forex Academy | ForexGen

Spreads and Pips
The difference between the bid price and the ask price is called a spread. If we were to look at the following quote: EUR/USD = 1.2500/03, the spread would be 0.0003 or 3 pips, also known as points. Although these movements may seem insignificant, even the smallest point change can result in thousands of dollars being made or lost due to leverage. Again, this is one of the reasons that speculators are so attracted to the forex market; even the tiniest price movement can result in huge profit.

The pip is the smallest amount a price can move in any currency quote. In the case of the U.S. dollar, euro, British pound or Swiss franc, one pip would be 0.0001. With the Japanese yen, one pip would be 0.01, because this currency is quoted to two decimal places. So, in a forex quote of USD/CHF, the pip would be 0.0001 Swiss francs. Most currencies trade within a range of 100 to 150 pips a day.
Currency Quote Overview
USD/CAD = 1.2232/1.2237
Base Currency Currency to the left (USD)
Quote/Counter Currency Currency to the right (CAD)
Bid Price 1.2232 Price for which the market maker will buy the base currency. Bid is always smaller than ask.
Ask Price 1.2237 Price for which the market maker will sell the base currency.
Pip One point move, in USD/CAD it is .0001 and 1 point change would be from 1.2231 to 1.2232 The pip/point is the smallest movement a price can make.
Spread Spread in this case is 5 pips/points; difference between bid and ask price (1.2237-1.2232).

Quotation

-The actual price or the bid or ask price of either cash commodities or futures or options contracts at a particular time.

Margin

-The deposit held by your forex trading partner to establish and maintain your account. Forex Capital Management enables you to trade on a highly leveraged basis. You select the level of leverage or gearing, and unless you specify otherwise, your leverage level is set at the most lenient required level for your account size. Your account equity is the total value of the account adjusted for current profit and loss on any open positions.

* Up to $50,000 - Minimum $1,000 in equity per open lot (1%)
* $50,000 - $200,000 - Minimum $2,000 equity per open lot (2%)
* $200,000 - $500,000 - Minimum $3,000 equity per open lot (3%)
* $500,000 and Up - Minimum $5,000 equity per open lot (5%)

A lot has an approximate market value of US$100,000. So the requirement of US$1,000 per open lot is approximately equal to a maximum leverage ratio of 100:1. Our dealers constantly monitor leverage levels of all accounts. Although Forex Capital Management makes no guarantees, the dealing desk may attempt to contact clients whose accounts are near the minimum equity requirement for their open positions. Clients are fully responsible for monitoring the activity in their accounts.In the event that an account exceeds its maximum allowable leverage, the dealer has the right to liquidate all positions in the account. \

By registering on ForexGen, you create your ForexGen profile and you can go ahead and open as
many Demo accounts , and Live accounts as you need. All accounts can be created online and
managed under your ForexGen profile. You can mix between Mini, Standard, Pro, Premium and
No Dealing Desk accounts in one Profile. Instant Approval.