Basic questions as i go through school

i just finished pre-school.

on best days of the week to trade page it shows a chart with trading activity sunday through friday. why is saturday not mentioned?

i recall reading forex trading is 24 hours. on the rollover page it talks about wrapping up trades before your brokers cut off time. this kinda sounds like i won’t be able to trade after a certain time. how does this work?

regarding margin trading. how do brokers prevent people from disappearing after taking losses? i know you have to pay a small percentage as a deposit but how to they enforce collection on the remaining unsecured balance? i’m pretty sure they would not expose themselves to risk and i’m not seeing the whole picture.

no trading saturdays.

brokers closed, hanging out with girlfriends, driving ferraris.

exchanges closed, hanging out with wifes, driving minivans.

retail traders desperate waiting for the weekend to end, hanging out alone, driving bicycles.

they dont let your account go into minus. as soon as the account balance is less then the required margin they forcefully close your position.

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24 hours a day does not automatically mean 7 days a week. I made that same mistake when I started learning this stuff too. I figured I could trade all day Satuday when I first started.

Markets are open, for my broker at least, Sunday 5:00 PM ET to Friday 5:00 PM ET. Once you settle on a broker, you can get more detailed information from them. I believe the cut-off time is more for when a broker determines one trading day has ended and the next one starts. I think that is mostly used for financing charges and other calculations.

brokers don’t allow you to go negative. understood. but i still need some clarification how this works. if i want to buy a standard lot with a 5% margin and i deposit my $5000 cash and then lose the whole lot am i expected to payback 95K or is the margin i paid all i’m expected to pay? i’m assuming there is no loan aspect to this but just want to make sure i am clear how this works.

i just finished kindergarten.

what broker do you guys recommend?

quote - A simple line chart draws a line from one closing price to the next closing price.

at first i thought where i marked in red was the price swing for one day. but then i remembered forex trading is 24 hours 6 days a week. does that mean where i marked in red the price swing from sunday to friday?

Hi,

I don’t think you can lose the whole lot, the broker will close your position out if your deposit can’t cover your open losses. I believe this is called a margin call

Later in the BP course you will go in-depth on margin call and setting stop losses to avoid this kind of situation.

Good luck!

Hi,

Personally I use FXCM and FOREX.com for fx trading, Bittrex and Bitstamp for cryptocurrencies. It shouldn’t matter much which you choose, just gotta make sure they regulated by the FCA.

Where did you get this conclusion? Your screenshot does not show the timeframe nor the x axis, so your red circles could be anything.

[quote=“smoothnobody, post:4, topic:122428, full:true”]
brokers don’t allow you to go negative. understood. but i still need some clarification how this works. if i want to buy a standard lot with a 5% margin and i deposit my $5000 cash and then lose the whole lot am i expected to payback 95K or is the margin i paid all i’m expected to pay? i’m assuming there is no loan aspect to this but just want to make sure i am clear how this works. [/quote]
You do not buy or sell anything. The number of lots is simply the notional currency amount that is used to establish the size of the pip value. The only factor that affects how much your account actually gains or loses is the number of pips difference between the exchange rate (price) at which you “buy” and the exchange rate (price) when you “sell”, regardless of which comes first. It is only the difference in price that determines your profit or loss, and size of that profit or loss depends on the nominal size of your position.

Your equity is your total deposit in your account. Your used initial margin is how much of that equity is reserved by your broker against that position, and the size of your margin requirement is determined by your leverage. Your equity then changes real-time according to the changing profit or loss on your account until the position is closed.

If the losses on your position reach the point where your equity is almost entirely utilised in covering those open losses then your broker will automatically close all your positions and your account is effectively dead.

So your risk is purely related to the changing exchange rate and not to the nominal value of the lots. You do not buy or sell anything at all.

The only situation when you can lose more than your equity is if the market rate gaps down over your stop level or, if there is no stop level, jumps beyond the price at which your equity was consumed because there were no bid/offers available. This could occur over a period where the market is closed or in the event of a sudden major event that causes the market to move dramatically, almost instantaneously, without any interim bid/offers available to close the position - this is extremely rare but does happen.

Yes, this is true that forex trading is 24 hours. But 24 hours doesn’t mean 7 days a week. Forex market opens from Monday to Friday. That’s why you didn’t see Saturday is mentioned. It was a common mistake of newbies. I also did this. But soon you will understand after getting involve with forex trading. And the best way of understanding the process of forex is through demo trading. You can dit. It is free as well.

Brokers may actually allow you to go into the negative, it depends on the broker - some allow it, some don’t. You need to discuss this with whichever broker you’ve picked before you invest money in, so there wouldn’t be any unpleasant surprises.

The week starts from Sunday to Friday, basically 24/5. Most brokers advise to avoid trading on Friday evenings and on Sunday when the market opens due to lower liquidity and possible widen spreads.
As for the margin question, in addition to the negative balance protection, again many brokers offer margin call and stop out. These functions usually are implemented in order to protect the accounts from losing trades. The margin call is triggered when the equity goes below a certain percent below the required margin (different brokers have different percentage settings). Then the system notifies you to either deposit more funds or close the losing trade. The same applies for the stop out. It is triggered after the margin call once the loss continues to grow bigger however in this case the system directly closes the placed losing order.
Here you can find a very helpful explanation about the mentioned Margin Call and stop out:

Yes it is. It depends on broker’s attitude. So before investing money we have to pass a long time in demo trading to see the broker’s performance.

I agree on principle, but whether or not a broker would let your account to go into the negative should be a part of their written policy. I strongly recommend asking them about it when you talk to customer support before you even open a demo account.