Depth of Market Depth of Market, aka the Order Book, is a window that shows how many open buy and sell orders there are at different prices for a security. Let’s say the current price is $1, the DOM will show how many orders there are at $0.90, $1.10, etc. It’s a great tool to…
Spot market A spot market is where financial instruments are exchanged for immediate delivery, such as commodities, currencies, and securities. Delivery, here, means cash exchange for a financial tool. In comparison, a futures contract is based on the delivery of the underlying asset at a future date. Over-the-counter (OTC) markets and exchanges may provide spot trading and/or futures trading. How Spot Markets Work Spot markets are also referred…
Currency Revaluation What is Currency Revaluation? In a fixed exchange rate regime, only a decision by a country’s government, such as its central bank, can alter the official value of the currency. Developing economies are more likely to use a fixed-rate system to limit speculation and provide a stable system. A floating rate is the opposite of a…
Technical analysis Technical analysis is the framework in which traders study price movement. Foreign exchange markets are particularly well suited to using technical analysis. The high levels of liquidity in terms of trading volumes and some players, and sensitivity to big long-term national-level trends means that forex markets tend to trend over time and patterns often…
Equity in Forex The account equity or simply “Equity” represents the current value of your trading account in forex. Equity is the current value of the account and fluctuates with every tick when looking at your trading platform on your screen. It is the sum of your account balance and all floating (unrealized) profits or losses associated with your…
Spread Definition Most forex currency pairs are traded without commission, but the spread is one cost that applies to any trade that you place. Rather than charging a commission, all leveraged trading providers will incorporate a spread into the cost of placing a trade, as they factor in a higher asking price relative to the…
Stock Market A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only trading privately, such as shares of private companies, for investors through equity crowdfunding platforms. Investment in the stock market…