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Forex. Q&A for Beginners

Q: What is Forex ?
A: Forex or Foreign Exchange is the simultaneous buying of one currency and selling of another. In this market currencies are converted by each. The world's currencies are on a floating exchange rate and are always traded in pairs, for example Dollar/Euro or Yen./Dollar.

Q: How do I get started ?
A: If you are just starting out on your forex journey, read some basic of forex trading strategies. Then open a demo account and try demo trading. You can open the demo account with one of our recommended brokers.

Q: How do I get profit in Forex ?
A: Select a currency pair. Buy a currency at a lower price and sell it at a higher price. It is that simple. However, you may lose if the currency you bought has depreciated.

Q: What are the most popular pairs ?
A: EUR/USD : Euro and United States dollar
USD/JPY: United States dollar and Japanese yen
USD/CHF: United States dollar and Swiss franc
GBP/USD: Great British pound and United States dollar
AUD/USD: Australian dollar and United States dollar
USD/CAD: United States dollar and Canadian dollar

Q: What is the stop loss order ?
A: A stop loss order is an order you enter once you place a trade to protect that trade from unexpected losses. In other words, it is a prescribed level where you would like to "stop your losses at".

Q: What is the trailing stop?
A: A trailing stop is a stop loss order which is dynamic. It changes depending on other conditions.

Q: What is the buy limit and the sell limit ?
A: The buy limit opens a buy position at a lower price than a current price at the moment of the order. Sell limit prescribes a sell position at a higher price than a current price at the moment of the order.

Q: What is the CFD ?
A: CFD is a Contract for Difference. It is a special contract that allows traders to earn money on falling or rising commodity without actually buying any stock or commodity. The CFD is usually supported by MetaTrader 4. It is one of the most effective trading systems often executed with various strategies. You need to study them to avoid losses.

Q: What is the PAMM account?
A: PAMM stands for Percentage Allocation Management Module.  Basically, with the PAMM account you let an experienced Forex professional, called the "Manager" trade for you. The profits or losses are distributed proportionally to individual managed accounts, based on each Investor's (including the Manager's) level of investment. You can open PAMM account with InstaForex Broker and with many others.

Q: What is the Copy Trader Account?
A: You can invest your money by linking your account to one or more traders. From this moment everything they do is automatically replicated in your account. See details in “Follow and Copy Traders with eToro”.

Q:  What is the requote? 
A: The requote happens when there is a difference between the price you decided to enter a trade by clicking buy/sell and the price on the market when your order actually reaches the broker.