An exchange rate is simply the ratio of one currency valued against another currency. Because there were so many stop-loss orders that couldn\u2019t be matched by any bid offers. Indeed, Forex traders had no reason to think the CHF would strengthen because the SNB never said anything about its wish to abandon the floor for the EUR\/CHF currency pair. Increasing trading costs is a situation that only happens when your broker offers variable spreads, which change depending on the market and trading conditions.<\/p>\n

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When you buy a currency pair you are going long the Transaction Currency while simultaneously shorting the Settlement Currency. Conversely, when you sell a currency pair you are shorting the Transaction Currency while simultaneously buying the Settlement Currency. Since the forex market is foreign exchange, each transaction must contain one currency against another.<\/p>\n

#4 Leverage Risk<\/h2>\n

When daylight savings time kicks in, make sure you are using the correct market hours. MetaTrader 5, or MT5, is the newest and most advanced online and free trading platform. Trading on MT5 via FXTM gives you even greater access to financial markets including foreign exchange, commodities, CFDs, stocks, futures and indices. As a leading global broker, FXTM are committed to providing services tailored to the needs of our clients. As such, we\u2019re s proud to offer our traders the choice of two of the industry\u2019s leading forex trading platforms; MetaTrader 4 and MetaTrader 5 .<\/p>\n