ActTrader terms and conditions
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1) Profit and Losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| To make profit, you have to buy the currency low and sell it high or vice-versa. The amount of profit made depends on the difference between the purchase price and the selling price. In the event that you buy a currency high and sell it low, or sell it low and buy it high, you will make a loss. Thus, you can make profit on both sides of the market. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2) Trade Volume/Account Balance/Risk Exposure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The amount of potential profit/loss received also depends on the volume, i.е. the amount of currency bought or sold. The larger the transaction amount, the greater potential profit or potential loss. Forex Club requires that you have a deposit of at least $250 before placing a trade. We will accept funds that equal less than $250 into a client's account, but the account will not be activated until the $250 minimum is achieved. The available transaction size not only depends on the amount of funds in your account, but also depends on the current USD versus based currency price and the spread. Money in your account is used as the margin for transactions. Volume affects your trading exposure along with market conditions and your trading strategy. Large volume positions have a greater pip cost, which increases potential for a greater profit or loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3) Maximum Leverage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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4) Currency Pairs (Instruments) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On FOREX you can trade currency pairs or “instruments.” An instrument is a pair of currencies where the first is either sold or bought for the other. For example, if you trade EURUSD, you buy or sell the required amount of euro (EUR) for dollars (USD) at price, for instance, 1.3567 dollars per euro. This transaction is often called buying or selling the EURUSD instrument. The currency you sell or buy is called the Base Currency. The currency you use to buy the Base Currency (a measure of the base currency rate) is called the Counter Currency or the Quote Currency. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5) First Transaction | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| To start trading, you have to place an Order – which is a request to the broker’s company to buy or sell a particular instrument. There are various types of orders, the market order being the simplest. When you place a market order, a sale or a purchase transaction will be concluded immediately at the best current price. Before a transaction you have to proceed with the following: - choose the instrument to be traded – the currency pair you wish to make profits of in accordance to rate change (for example, you would choose EURUSD if you had an educated guess as to future euro/dollar rates) - choose a transaction amount – the larger the amount, the more you can earn at the rate changes, and the higher the risk of loss will be - decide as to whether you want to buy or sell this instrument (if you think that the euro rate will go up compared to the dollar rate, you have to buy EURUSD, and if you think it’ll go down – sell it). To send the order to the broker’s company, click Buy or Sell, set the above parameters and click OK. The order will be briefly displayed in the window Orders. The order will be executed in a short time, and a transaction will be made at the price you indicated, a new open position will be displayed in the “Open Positions” window. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6) Open Position | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| After your buy or sell order is executed, you’ll have an open position. An open position will incur profits or losses dependent on any changes in the instrument rate. This is called current (floating) profit. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7) Closing Positions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| To fix your current (floating) profit (i.e. to credit the current profit or loss to your account), you have to close your position. To close a position you have to make an opposite transaction with the amount of an open position, i.е. sell/buy the instrument that you bought/sold in the open position. After you close the position, no changes in the instrument rate will affect your profit. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8) Trading Instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trading allows the following instruments: EUR/USD Euro/American dollar GBP/USD British pound/American dollar USD/JPY American dollar/Japanese yen USD/CHF American dollar/ Swiss franc EUR/JPY Euro/Japanese yen EUR/CHF Euro/Swiss franc CHF/JPY Swiss franc/Japanese yen AUD/USD Australian dollar/American dollar NZD/USD New Zealand dollar/American dollar USD/CAD American dollar/Canadian dollar CAD/JPY Canadian dollar/Japanese yen GBP/JPY British pound/Japanese yen EUR/GBP Euro/British pound GBP/CHF British pound/Swiss franc AUD/JPY Australian dollar/Japanese yen EUR/CAD Euro/Canadian dollar GBP/CAD British pound/Canadian dollar AUD/CAD Australian dollar/Canadian dollar AUD/CHF Australian dollar/Swiss franc EUR/AUD Euro/Australian dollar CAD/CHF Canadian dollar/Swiss franc NZD/JPY New Zealand dollar/Japanese yen | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9) Pip. Tick. Pip Value. Calculating Profit. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A pip is a minimum possible change in the instrument rate. For instruments with a counter currency JPY (Japanese yen) one pip is equal to 0.01. For all other instruments, one pip is equal to 0.0001. The pip price is the profit you make when selling the instrument at the price 1 pip higher than bought. The pip price differs for all different instruments and also depends on the position amount. For the transaction amount 10,000, the pip price will be approximately $1, namely: For instruments with a Counter Currency USD (American dollar) and the transaction amount 10,000, the pip price will be $1. For instruments with a Counter Currency CHF (Swiss franc), CAD (Canadian dollar) and the transaction amount 10,000, the pip price will be $1 divided by the USD/Counter Currency rate. For instruments with a Counter Currency GBP (British pound), AUD (Australian dollar) and the transaction amount 10,000, the pip price will be $1 multiplied by the Counter Currency/USD rate. For instruments with a Counter Currency JPY (Japanese yen) and the transaction amount 10,000, the pip price will be $100 divided by the USD/JPY rate. For all transactions, profit may be calculated as follows: divide a transaction amount by 10,000, multiply by the pip price when the transaction amount is 10,000 and multiply by the difference in pips between the opening price and closing price. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10) Spread | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| At any point of time the purchasing price of the instrument is a bit higher than the selling price. This difference is called Spread, and this difference brings profit to the broker’s company. Spreads are set in pips. Our spread costs start from:
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11) Predefined Orders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A predefined order is an order to the broker to buy or sell the instrument when its price reaches a particular level. Please be advised that the inclusion of an extra decimal in the ask/bid price has an effect on how you place orders. When placing orders, the extra decimal place is considered a point. If, for example, you open a buy position on EUR/USD at 1.20000 and would like to set a take profit limit at 1.20200, though the actual market price is 20 pips away, the difference in regards to placing an order is 200 points. Therefore, and in regards to the previous example, you would have to place the order 200 points away from price, not 20 pips away. Please keep this in mind while trading. The price indicated in the order shall differ by 100 or more points from the price which is shown in the dealing rate window as of the moment the order is issued. For BUY orders the above difference shall be calculated based on the ASK price of the current quotation and for SELL orders it shall be calculated based on the BID price. The Company has the right to refuse to execute those orders that violate the provision above. The Company also reserves the right to increase the minimal difference between the order price and the current price in the event of increased volatility and lowered liquidity on the market before the news publication, as well as before the end of the trading day on Friday. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12) Trailing Stop | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| If the instrument’s price moves in favor of a trader’s trade, a trader often wants to roll the Order for closing of the Stop type – initially to the level of zero losses, and then to the profitable zone to secure available current profit in case the price goes in the wrong direction. To make Stop movements automatic, you can use the so-called Trailing Stop. The Trailing Stop is set as the Order Stop. When you set a Trailing Stop, you have to specify the distance in pips –Trailing Distance where Trailing Stop will follow the current price of the instrument. The principle of Trailing Stop is as follows: if the distance between Stop and the current prices exceeds the Trailing Distance at new quotation, then Stop shifts with the price, and if the distance between Stop and the current price decreases – Trailing Stop holds its position. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13) Summary. Several Open Positions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The summary window displays a summary of all oepn positions, organized by instruments. You can hold several open positions for different instruments at once. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14) Reverse Transactions with One Instrument. FIFO Rule | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| It is not allowed to hold opposite positions for one instrument at once. If, for example, you already have a buy position and try to open a sell position, and then in this case your buy position will be closed by this transaction in full or in part. If the amount of the current position is equal to the reverse transaction, the current position will be closed. If the amount of the current position exceeds the reverse transaction, the position will be partially closed. Alongside with this, a part of the current (floating) profit will be fixed proportional to the amount of the closing transaction (Partial Close). If the amount of the current position is less than the reverse transaction, the position will be closed in full, profit will be fixed in full as well, and a new position will open at the transaction rate and in the amount equal to the difference between reverse transaction amount and current position amount (Reversal Transaction). If there are several open positions, then in case of a major reverse transaction these open positions will be closed in accordance with the order they were opened and as long as there is enough amount of the reverse transaction. (FIFO rule). If there isn’t enough amount to close all open positions, the last position will be partially closed, and if the amount of the reverse transaction exceeds the Summary, there will open a counter position equal to the remaining amount. Please, note, it is the position that was opened first plays a key role: if you hold a position “bought 10,000” that was opened first and “bought 9,000” that was opened second and there is an order to sell 9,000, it will be the first transaction to be closed partially. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
15) One Cancels the Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| You can place two Orders, Stop and Limit, in such a way so as to execute only one of them. This combination of two orders is called One Cancels the Other. To set OCO Orders, you should first place one of them, then right-click it and select the menu item – One Cancels the Other. Just as easy, when you place the second order, you can select one of the available orders for the OCO combination. OCO orders shall be one-way, i.e. both to buy or both to sell, amounts of OCO orders may be different. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
16) Rollover Premium | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
While trading on FOREX, you don’t actually buy foreign exchange currency but rather take it on credit from a broker’s company and at the same time you trust the other currency of the combination to the company. Since such transaction is crediting of fact, there is interest on credit. You pay interest to the company on the currency you’ve bought, and you receive interest on the currency you used to buy the Base Currency. Interest rates on various foreign exchange currencies differ; therefore the difference between the interest prices has its value. Interest is accrued at end of each business day at 21:00 GMT. For simplicity of calculation, the interest rate spread is calculated for all instruments and given in the table below. The Table reveals the number of pips written off or credited to your account based on the amount of all open positions as of 21:00 GMT. These interest rate spreads are called Rollover Premium. If you close a position before 21:00 GMT, no Rollover Premium will be charged. Rollover Premium depends on whether you buy or sell the instrument. This spread also makes the broker’s profit. The negative Rollover Premium in the Table is written off your account and the positive Rollover Premium is credited to your account. Please be advised that from Wednesday to Thursday, Rollover Premiums will be tripled.
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17) Price Change of the Market Order. Trading Range | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange rate values on FOREX are subject to rapid changes, sometimes they change a few times a second. Sometimes when you press the Market Order button, there can be the following situation: while the order information you pressed still has not reached the server of the broker’s company, it has already become impossible to execute the order at the price that you pressed, because the price has already become not relevant. In this case you would receive a Reject Notice because the transaction can not be completed, and you would have to create a new Market Order. When the market is active, a trader often needs to close a transaction by all means, and in such cases it is not crucial that the price may differ by a few pips. If that is the case, a trader can set Trading Range. By setting Trading Range, a trader agrees that if the price changes within the stipulated range, he will make a transaction at the offered new price. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
18) One Click Trading | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| To allow active traders make a great deal of transactions, there is an option of One Click Trading. Unlike a standard mode, no window for parameters of the market order displays after the price-click, and the order is sent immediately without additional confirmation. In this mode the order amount is preliminary specified in the price window, Trading Range for this Order is equal to zero, this means: even if the price changes by one pip, a transaction will not be made and the customer will get a new price. Take care and use this option when is required, since there is always a risk to press the price button by mistake. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19) Initial Margin Requirement and Notional Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Margin serves as collateral to cover any losses that you might incur. Since nothing is actually being bought or sold for delivery, the only requirement, and indeed the only real purpose for having funds in your account, is for sufficient margin. When opening a position the different notional values will affect how much margin is required to take out that position. Initial margin requirement and notional value examples: Balance = $10000 Thw current used margin is $2700, and the amount is constantly recalculated with every change in tick. The current remaining usable margin is $7300, assuming that new position has 0 profit or loss. Please note, spreads cost should be taken into consideration when opening a position. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
20) Equity Level | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
An account equity level is the ratio of equity to initial margin expressed as a percentage. This level is calculated as follows: Equity Level = Equity / Initial Margin x 100 %, Equity = Balance - or + PL Example: Your trading account balance is $3,500. In order to open a position of 50,000 EUR at the rate of 1.3500 using 50:1 leverage, you will need 50,000* 1.3500 *2% = $1,350 of initial margin requirement. Given that the floating profit/loss for the position is +$500, the Equity will be 3,500 + 500 = 4,000, which means that the Equity Level will be: 4,000/1,350 x 100 % = 296.29%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
21) Stop Out | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forex Club will take action to automatically close some clients' positions in the event if their ActTrader account’s equity level reaches or drops below the stop out level. A stop out order is initiated when a client’s equity level reaches 50%, or when the ratio of equity to used margin decreases to 50%.
The equation used to calculate the amount of loss incurred if your equity level reaches 50% is as follows: Amount of Loss when Equity Level is at 50% = Used Margin X 0.5 - Balance Example: A trader with an account balance of $3,500 and several opened positions has used margin of $2,000. The equation to calculate the total loss at the time when the equity level is 50% would be: $2,000 x 0.5 - $3,500 = -$2,500, i.e., when the total loss reaches or exceeds -$2,500, all of the Client’s positions will be automatically closed. There are situations, such as price gaps, when the equity level would be lower than the established stop out level. When this occurs, the actual amount of loss will be calculated according to the following formula:
Open positions on account will be automatically closed by the system in the ‘FIFO’ (First in - First out) order, until equity level gets back above 50% again. Account will be automatically restored for trading. |
