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Trading scenario: what happens if you trade with just $100?

What happens if you open a trading account with just $100?

Or €100? Or £100?

Since margin trading allows you to open trades with just a small amount of money, it’s certainly possible to start trading forex with a $100 deposit.

But should you?

Let’s see what can happen if you do.

In this trading scenario, your retail forex broker has a margin call level at 100% and a stop out level at 20%.

Now that we know what the margin call and stop out levels are, let’s find out if trading with $100 is doable.

If you have not read our lessons on margin call and stop out levels, hit pause on this lesson and start here first!

Step 1: deposit funds into trading account

Since you’re a big baller shot caller, you deposit $100 into your trading account.

You now have an account balance of $100.

This is how it’d look in your trading account:

Long / short	FX pair	position size	entry price	current price	margin level	equity	used margin	free margin	balance	floating P/L
–	$100	–	$100	$100	–

Step 2: calculate required margin

You want to go short EUR/USD at 1.20000 and want to open 5 micro lots (1,000 units x 5) position. The margin requirement is 1%.

How much margin (“required margin“) will you need to open the position?

Since our trading account is denominated in USD, we need to convert the value of the EUR to USD to determine the notional value of the trade.

The notional value is $6,000.

Now we can calculate the required margin:

Assuming your trading account is denominated in USD, since the margin requirement is 1%, the required margin will be $60.

Step 3: calculate used margin

Aside from the trade we just entered, there aren’t any other trades open.

Since we just have a SINGLE position open, the used margin will be the same as required margin.

Step 4: calculate equity

Let’s assume that the price has moved slightly in your favor and your position is now trading at breakeven.

This means that your floating P/L is $0.

Let’s calculate your equity:

The equity in your account is now $100.

Step 5: calculate free margin

Now that we know the equity, we can now calculate the free margin:

The free margin is $40.

Step 6: calculate margin level

Now that we know the equity, we can now calculate the margin level:

The margin level is 167%. At this point, this is how your account metrics would look in your trading platform:

Long / short	FX pair	position size	entry price	current price	margin level	equity	used margin	free margin	balance	floating P/L
–	$100	–	–	$100	–
short	EUR/USD	6,000	1.20000	1.20000	167%	$100	$60	$40	$100	$0

EUR/USD rises 80 pips!

EUR/USD rises 80 pips and is now trading at 1.2080. Let’s see how your account is affected.

Used margin

You’ll notice that the used margin has changed.

Because the exchange rate has changed, the notional value of the position has changed.

This requires recalculating the required margin.

Whenever there’s a change in the price for EUR/USD, the required margin changes!

With EUR/USD now trading at 1.20800 (instead of 1.20000), let’s see how much required margin is needed to keep the position open.

Since our trading account is denominated in USD, we need to convert the value of the EUR to USD to determine the notional value of the trade.

The notional value is $6,040.

Previously, the notional value was $6,000. Since EUR/USD has risen, this means that EUR has strengthened. And since your account is denominated in USD, this causes the position’s notional value to increase.

Now we can calculate the required margin:

Notice that because the notional value has increased, so has the required margin.

Since the margin requirement is 1%, the required margin will be $60.40.

Previously, the required margin was $60.00 (when EUR/USD was trading at 1.20000).

The used margin is updated to reflect changes in required margin for every position open.

In this example, since you only have one position open, the used margin will be equal to the new required margin.

Floating P/L

EUR/USD has risen from 1.20000 to 1.2080, a difference of 80 pips.

Since you’re trading micro lots, a 1 pip move equals $0.10 per micro lot.

Your position is 5 micro lots, a 1 pip move equals $0.50.

Since you’re short EUR/USD, this means that you have a floating loss of $40.

Equity

Your equity is now $60.

Free margin

Your free margin is now $0.

Margin level

Your margin level has decreased to 99%.

The margin call level is when margin level is 100%.

Your margin level is still now below 100%!

At this point, you will receive a margin call, which is a WARNING.

Your positions will remain open BUT…

You will NOT be able to open new positions as long unless the margin level rises above 100%.

Account metrics

This is how your account metrics would look in your trading platform:

Long / short	FX pair	position size	entry price	current price	margin level	equity	used margin	free margin	balance	floating P/L
–	$100	–	$100	$100	–
short	EUR/USD	5,000	1.20000	1.20000	167%	$100	$60	$40	$100	$0
short	EUR/USD	5,000	1.20000	1.2080	99%	$60	$60.40	-$0.40	$100	-$40

EUR/USD rises another 96 pips!

EUR/USD rises another 96 pips and is now trading at 1.2176.

Used margin

With EUR/USD now trading at 1.21760 (instead of 1.20800), let’s see how much required margin is needed to keep the position open.

Since our trading account is denominated in USD, we need to convert the value of the EUR to USD to determine the notional value of the trade.

The notional value is $6,088.

Now we can calculate the required margin:

Notice that because the notional value has increased, so has the required margin.

Previously, the required margin was $60.40 (when EUR/USD was trading at 1.20800).

The used margin is updated to reflect changes in required margin for every position open.

In this example, since you only have one position open, the used margin will be equal to the new required margin.

Floating P/L

EUR/USD has now risen from 1.20000 to 1.217600, a difference of 176 pips.

Since you’re trading 5 micro lots, a 1 pip move equals $0.50.

Due to your short position, this means that you have a floating loss of $88.

Equity

Your equity is now $12.

Free margin

Your free margin is now –$48.88.

Margin level

Your margin level has decreased to 20%.

At this point, your margin level is now below the stop out level!

Account metrics

This is how your account metrics would look in your trading platform:

Long / short	FX pair	position size	entry price	current price	margin level	equity	used margin	free margin	balance	floating P/L
–	$100	–	$100	$100	–
short	EUR/USD	5,000	1.20000	1.20000	167%	$100	$60	$40	$100	$0
short	EUR/USD	5,000	1.20000	1.20800	99%	$60	$60.40	-$0.40	$100	-$40
short	EUR/USD	5,000	1.20000	1.21760	20%	$12	$60.88	-$48.88	$100	-$88

Stop out!

The stop out level is when the margin level falls to 20%.

At this point, your margin level reached the stop out level!

Your trading platform will automatically execute a stop out.

This means that your trade will be automatically closed at market price and two things will happen:

Your used margin will be “released”.

Your floating loss will be “realized”.

Your balance will be updated to reflect the realized loss.

Now that your account has no open positions and is “flat”, your free margin, equity, and balance will be the same.

There is no margin level or floating P/L because there are no open positions.

Let’s see how your trading account changed from start to finish.

Long / short	FX pair	position size	entry price	current price	margin level	equity	used margin	free margin	balance	floating P/L
–	$100	–	$10,000	$100	–
short	EUR/USD	5,000	1.20000	1.20000	167%	$100	$60	$40	$100	$0
short	EUR/USD	5,000	1.20000	1.20800	99%	$60	$60.40	-$0.40	$100	-$40
short	EUR/USD	5,000	1.20000	1.21760	20%	$12	$60.88	-$48.88	$100	-$88
–	$12	–	$12	$12	–

Before the trade, you had $100 in cash.

Now after just a SINGLE TRADE, you’re left with $12!

Not even enough to pay for one month of netflix!

You’ve lost 88% of your capital.

And with EUR/USD moving just 176 pips!

Moving 176 pips is nothing. EUR/USD can easily move that much in a day or two. (see real-time EUR/USD volatility on marketmilk™)

Congratulations! You just blew your account! ��

Since your account balance is too low to open any new trades, your trading account is pretty much dead.

Largest forex brokers in the world 2020

A lot of traders think that a big broker is better than a smaller one because a larger company has many advantages such as economies of scale, a better liquidity position and is the subject of higher scrutiny from the public and the regulators. While this basic assumption has some merit and to some degree "bigger is better", it is not a total correlation between size and quality of forex brokers. This means that the largest broker is not necessary the best, although all good brokers are sufficiently large in order to be competitive.

If you want to find out which are the biggest forex companies in the world, you should continue reading this article. However, if you want to know which are the best forex brokers in the world when it comes to trading conditions and customer satisfaction, you should check our special forex brokers ranking.

How to measure the biggest forex companies

When it comes to measuring the size of a company, there are several criteria that are generally used. The most common criteria used in ranking companies by size are market capitalization, revenue and profits. Also, when it comes to financial companies such as banks or insurance companies, another way to measure size is by comparing the total assets under management. While these values can be relevant in some situations and industries, they are totally irrelevant when it comes to forex brokers. Here is why:

Market capitalization - the only companies that can be ranked by market capitalization are public companies (those listed on a stock exchange). This would leave most forex brokers out of the ranking. It is also important to note that market capitalization represents the value investors give to a specific company. A small but profitable company can have a higher market value than a large company unable to generate profits.

Revenue - while ranking forex brokers by revenue will render more accurate results, this criteria is still far from being relevant in this particular case. A broker's revenues will come from the commissions it charges and the spreads the traders have to pay. A broker with higher commissions and spreads will generate more revenue than a similar sized broker with lower spreads. There is also the problem of integrated products offered by the companies. A company offering stocks trading, options and futures along with forex trading will generate revenue from more sources as compared to a pure forex broker. If the stocks business generates most of the revenue, the company can be very large but the forex division can still be small compared to others.

Profits - ranking forex brokers by profits is totally irrelevant, as this criteria includes the same problems we identified when discussing about revenues, and many more. Just think about a large company with a bloated business that has huge operating costs. It can be a really big company but generate no profit.

Assets under management (AUM) - in the case of forex brokers, the closest thing to AUM are the client funds. While they are not managed by the brokers, they represent the total value of the client accounts. This measure is much more relevant than the previous ones, but it still lacks the differentiation between the forex business and the other services offered by the company. If you mix stocks trading with forex, it is very likely that the largest part of the client funds will be used in trading stocks, not forex. Another thing that makes clients funds less relevant is the different leverage used by brokers. Lower leverage needs more funds in the broker's custody for the same operations. Also, it is possible to have large forex accounts with very little trading activity.

Considering the above mentioned criteria are irrelevant when judging the size of forex brokers, we must come up with a measure that is more relevant to this specific business. In this case, we think that the most relevant criteria to rank forex brokers is by the average volume of daily transactions.

Average volume of daily transactions (AVDT) - the daily transactions of a forex broker can vary a lot, but the more active clients the broker has, the less volatile the value of daily transactions will be. In order to get a better idea about the real volume of a broker, it is better to calculate the average volume for a larger period of time, as daily and seasonal fluctuations will be less relevant. We think the AVDT becomes relevant when at least the last three months are being taken into consideration when calculating the average. In order for a forex broker to be considered large it must have an AVDT of at least one billion dollars (more than 10,000 standard lots traded daily).

We noticed that all the high quality forex brokers are also large ones and have their AVDT of at least three billion dollars. This is why, in this article we will list only brokers with daily transactions exceeding three billion US dollars.

Largest forex brokers by volume

Below you will see the biggest forex companies in the world by volume of daily transactions. We have separated the companies based on their location, as we have identified four major regions when it comes to forex brokers: united states of america, europe, australia and the rest of the world. The regions we identified have different regulation and the brokers in each region must abide by specific rules. The data presented on this article was compiled from different sources such as company presentations and other information found on the internet. The data is not audited and we cannot guarantee it is accurate. Please take the information about AVDT with a grain of salt as it may contain errors and inaccuracies.

Figure 1: major forex regulators around the world

In order to make it easier for you to identify the best forex brokers from the rest, we have also added our rating next to each broker. The ratings vary from A+ (best) to C- (worst). We have a dedicated page where you can read more information about our forex broker ratings.

Largest forex brokers in the united states

The united states is one of the largest forex markets in the world, but due to very restrictive regulation it has been declining in recent years. It is also the most isolated market since US traders are unable to open account with offshore forex brokers because the FATCA regulations imposed on foreign financial institutions has made it too expensive for anyone to accept US clients.

The strict rules and protection from outside competition had led to consolidation among local brokers, with the most important development being the acquisition of FXCM client base by gain capital (also known as forex.Com). Right now there are only three forex brokers in the united states, and one of them is mostly an institutional broker (interactive brokers), so retail clients have basically only two choices (forex.Com and oanda). Because the CFTC and NFA regulation greatly limits leverage and has the unpopular FIFO rule, the US based brokers have been unable to get traction in foreign markets and the vast majority of their clients are from the US.

Below is the ranking of the biggest US forex brokers by volume:

AVDT*	rating	broker
15.5	B-	forex.Com (GAIN capital holdings inc)
10.7	B+	oanda (oanda corporation)
3.9	C-	interactive brokers (interactive brokers LLC)

* average volume of daily transactions in billion USD

Largest forex brokers in europe

This is where most of the large forex companies are located. Because of europe's cultural and linguistic diversity, local brokers had to adapt early to very different markets and stiff competition, but this has proven to be a great asset when they expanded globally. European brokers are based in different countries and have multiple trading licenses, but the hot spots of forex trading in europe are cyprus (cysec) and the united kingdom (FCA). This is where most brokers are located thanks to the world leading regulation, and even brokers located in other countries such as denmark's saxo bank use a cysec license for their forex trading division. While european regulation varies from country to country, they are all compliant with the MIFID legislation of the european union which adds another layer of protection for traders.

Some of the european brokers have gone global, and their operations are spread on different continents. European brokers are used by many traders in asia, africa, the middle east and latin america, and their total volumes are greatly boosted by their international operations. Some brokers may have the bulk of their activity from non-european clients attracted by the safety of european regulations and the excellent trading conditions offered by some of the world's leading brokers.

Here you can see the largest forex brokers in europe:

AVDT*	rating	broker
13.4	A	XM group (trading point of financial instruments ltd, trading point of financial instruments pty ltd and XM global limited)
12.3	B	saxo bank (saxo bank A/S)
7.8	B+	ava trade (ava trade ltd)
6.8	B-	IG markets (IG group)
6.5	C	FX pro (fxpro financial services limited)
4.7	B+	swissquote (swissquote group holding SA)
4.4	B-	plus500 (plus500 ltd)
4.3	C-	etoro (etoro europe ltd)
4.2	C	markets.Com (safecap investments limited)
3.9	B-	CMC markets (CMC markets UK plc)
3.8	B-	FXCM (FXCM group)
3.6	C+	forex time (forextime limited)
3.5	B	dukascopy (dukascopy bank SA)
3.3	B-	FXDD (fxdirectdealer LLC)
3.2	C+	admiral markets (admiral markets group AS)

* average volume of daily transactions in billion USD

Figure 2: costas cleanthous, XM's CEO at the shanghai forex expo

Biggest forex brokers in australia by volume

We have a separate section for australian brokers because they have their own regulation under the australian securities and investments commission (ASIC). Australian brokers are well represented outside australia's borders as well, because the jurisdiction is very solid and some of the brokers are offering top notch conditions and liquidity. The major forex brokers in australia are also very successful in other english speaking countries as well as in china and southeast asia.

There are three major australian forex brokers that generate very high average daily volumes, and all of them are experiencing good growth rates. Below you can find the largest forex brokers in australia:

AVDT*	rating	broker
18.9	A+	IC markets (international capital markets pty ltd)
6.7	A-	pepperstone (pepperstone group limited)
5.3	A-	AXI trader (axitrader limited)

* average volume of daily transactions in billion USD

Largest forex brokers from other jurisdictions

There are several high volume forex brokers located in other jurisdictions than the ones presented above (australia, europe and united states). Since the remaining big brokers are spread around the world and are not concentrated in a smaller region, we have included them in the "rest of the world" category. The brokers listed here come from very different jurisdictions such as st. Vincent and the grenadines, belize, british virgin islands or cayman islands in the caribbean, seychelles or bermuda.

The brokers in this category abide by different regulation and can vary a lot when it comes to reliability. However, this does not mean that such brokers cannot be good, as you will see that the ratings they received are very different, from very good to very bad.

Here is the list of the largest forex brokers from the rest of the world:

AVDT*	rating	broker
11.5	A	hot forex (HF markets ltd)
9.7	A	vantage FX (vantage international group limited)
9.1	A-	IFC markets (ifcmarkets corp)
8.4	A-	exness (exness limited)
5.8	B	instaforex (instaforex group)
4.3	B+	roboforex (roboforex ltd)
4.1	B	iron FX (notesco limited)
3.8	B-	X-trade brokers (xtrade international limited)
3.7	B	eagle FX (eaglefx ltd)
3.5	B	IQ option (iqoption ltd)
3.3	B-	FX open (fxopen markets limited)
3.2	C	easy markets (EF worldwide ltd)
3.1	B	olymp trade ( inlustris ltd. )
3.0	C-	alpari (alpari limited)

* average volume of daily transactions in billion USD

Which large forex brokers are truly global?

While US traders will have to settle with a US based broker since they are not allowed to open accounts with foreign companies, people from the rest of the world are free to trade using an offshore forex broker account. In most cases, europeans will settle for an european broker and australians will choose a local one as well, but what about people from the rest of the world? What about people in canada, central and south america, the caribbean, africa and asia? They make up more than 85% of the world population, and they must choose a foreign forex broker to trade with. What are their best options?

All forex brokers will accept people from most countries, but only a small number of brokers are truly able to handle a diverse client base. In order to better serve people from various countries and continents, a broker must be able to easily handle deposits and withdrawals with a vast number of internationally used payment methods. The brokers must also allow for accounts denominated in different currencies, have multilingual websites and dedicated customer support for many countries and languages. The brokers targeting a worldwide audience may hold multiple licenses and operate in different jurisdictions in order to provide the best trading conditions for people in different regions. While many of the big forex companies are specialized in serving more than one demographic, we have identified a set of brokers which have a truly global presence and are well suited to handle traders from any corner of the world.

Here are the largest truly global forex brokers:

AVDT*	rating	broker
18.9	A+	IC markets (australia, seychelles)
13.4	A	XM group (cyprus, australia and belize)
12.3	B	saxo bank (denmark)
11.5	A	hot forex (st. Vincent and the grenadines, cyprus, south africa, seychelles, mauritius)
9.1	A-	IFC markets (british virgin islands)
7.8	B+	ava trade (ireland)
6.5	C	FX pro (united kingdom)
5.8	B	instaforex (british virgin islands)

* average volume of daily transactions in billion USD

Disclaimer: the average trading volumes presented on this page are the result of out efforts to gather and compile information from different internet sources. We have no guarantee that the numbers are correct, and considering the volatility of the forex market and the seasonal dynamics, it is possible that such numbers will suffer significant changes from month to month. Please also note that the ratings we give to forex brokers are based on our own research and criteria, but do not represent an endorsement or a critique of any broker. We are not giving investment advice and we think anyone should do his/her personal due diligence before registering with a specific broker. Forex trading is a risky activity and you should never trade with money you cannot afford to lose.

About us

ABOUT OBAFOREX GLOBAL TRADING

We trade. We manage. We train. We signal.

Flexibility

We believe in creative adaptation to changing business realities for sustainability and increased profitability.

Integrity and transparency

We believe that a lasting and rewarding relationship is built on mutual respect and trust

Profitability

We believe that our primary aim is to produce healthy profit to our investors. We are commited to our promises

OUR TEAM MEMBERS

Discover our team and experts

Moses adebayo samuel (MCTS)

Obaforex team

Misheal oluwaseyi ezekiel

Forex trader/training director

Japhet usman

Omotayo andrew adeporoye

David samuel

Forex trader/signal manager

Vincent tobi bello

Obioha rachel ogechi

Onyilimba stanley tochukwu

Forex trader/marketing manager

WE ARE HERE FOR YOU

Here are few more things about us

A team of young experts

Obaforex is managed by a young team with expertise and experience from the fields of management, information technology, finance, sales and marketing.

We are a team of experienced currency traders and crypto currency consultants and traders with over 14 years’ experience in the currency, blockchain and crypto currency industry.

We do more

Obaforex is actively engaged in day-trading of foreign currency exchange and crypto currencies on major exchanges, flipping of icos, crypto currency mining, and signal provideing.

We also engage in building and growing series of offline businesses such as obaforex corporate services, obaforex ICT training, obaforex restaurants, obaforex transport services, obaforex entertainment, obaforex farm, obaforex real estate, obaforex computer clinic and obaforex digital studio, etc…

We are involved in short-term trading of selected products and services producing consistent profits; and other business opportunities as our experts determines to be profitable and sustainable.

We keep our promises

Let’s GROW YOUR MONEY by 25% every month

At obaforex, you invest a minimum of one hundred thousand naira (N100,000) and maximum of hundren millionnaira (N10,000,000) and earn 25% monthly for 12 months

As such, we guarantee the safety of your invested capital. So you are in control of your capital. Therefore, with us, there's no possibility of you losing your capital and we are committed to delivering a good trading result!

We are sophisticated

Obaforex is a financial technology and automated trading & investment service company.

We offer sophisticated A.I driven automated trading solutions for financial markets.

Our mission is to simplify investing & empower investors with innovations in financial & machine learning sciences. Our artificial intelligence for algorithmic trading formulates winning strategies & rigorous risk management to grow client’s wealth.

We develop sophisticated trading models that are able to continuously learn and improve using advances in A.I, artificial neural network, machine learning, deep learning, big data, and analytics to minimize client risk and maximize returns.

Our team

A team of young experts

Obaforex is managed by a young team with expertise and experience from the fields of management, information technology, finance, sales and marketing.

We are a team of experienced currency traders and crypto currency consultants and traders with over 14 years’ experience in the currency, blockchain and crypto currency industry.

Our involvements

We do much more

Obaforex is actively engaged in day-trading of foreign currency exchange and crypto currencies on major exchanges, flipping of icos, crypto currency mining, and signal provideing.

We are involved in short-term trading of selected products and services producing consistent profits; and other business opportunities as our experts determines to be profitable and sustainable.

Trade major US tech stocks this earnings season

Why are traders choosing FOREX.Com?

Global market leader

Connecting traders to the currency markets since 2001

Professional accounts

Discover the FOREX.Com
pro service

Innovative & award-winning

Our new mobile app offers one-swipe trading and lightning fast execution

Financial strength you can depend on

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Your FOREX.Com account gives you access to our full suite of downloadable, web, and mobile apps.

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Trade on one of the world's most popular trading platforms with access to dedicated support and integrated trading tools exclusive to FOREX.Com.

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Forex trading

Forex, also known as FX, is an abbreviation of foreign exchange market. In its most basic form, the foreign exchange market exists because people, companies and other legal entities using different currencies do business with each other. In the ancient world, a greek spice importer could have a need to swap his greek coins for egyptian coins before he made a purchase of spice in northern africa. Today, were are essentially doing the same thing, even though our modern multinational forex market has evolved into something highly complex.

Due to fluctuations in the value of a currency, in relation to other currencies, it is possible to make a profit by trading in currencies (FX trading). FX speculators doesn’t have a need for foreign currency to pay for imported spices; they simply want to make a profit from buying and selling currency on the FX market.

You don’t need to be professional currency trader with huge amounts of money to risk to be a profitable FX trader, since there are FX trading platforms available online where you can trade even small amounts. Thanks to the advent of the internet and online retail FX trading platforms, FX trading has become a popular hobby.

A lot have changed since the first platforms for online retail FX trading were launched, and today’s platforms tend to have a lot of tools for the trader to make use of. You can get help with statistical analysis, receive tailor-made news feeds, utilize automated orders, and much more. Some platforms are downloadable programs that you must install on your computer, but there are also platforms available where you carry out your transactions directly in your browser window. Recently, special trading apps has been launched for mobile touch screen devices using ios, android or windows mobile.

If you have none or little experience with stock, forex or other kinds of money trading, we also recommend you to try binary options, which is a new simple way of gambling with the stockmarket, forex and much more.

Currency pairs

On the FX market, currencies are traded in the form of currency pairs. Examples of commonly traded pairs are EUR/USD, GBP/USD and USD/JPY.

Some trading platforms will use the format “EUR/USD” while others prefer the “EURUSD” model. They both mean the same thing; it is just two different ways of expressing it. In both examples, EUR is the base currency and USD is the counter currency. For the currency pair EUR/CAD, the euro is the base currency and the canadian dollar is the counter currency, and so on.

Example: EUR/CAD 1.5417 means that the price of 1 euro is 1.5417 canadian dollars.

All currencies have a three letter currency code established by the ISO 4217 standard.

What’s a forex pip?

A forex pip is a unit utilized to denote value changes for currency pairs.

Example: the exchange rate for the currency pair EUR/USD changes from 1.0837 to 1.0832. This is a 5 pip change.

Most major currencies on the FX market are priced in four decimal planes, with 1 pip being one unit of the 4th decimal point. An important exception is the japanese yen (JPY) which is priced in second decimal planes, with 1 pip being one unit of the 2nd decimal point.

Examples of currency pairs where 1 pip is one unit of the 4th decimal point:

EUR/USD

GBP/USD

EUR/GBP

USD/CHF

GBP/CHF

USD/CAD

AUD/USD

NZD/USD

Displaying fractional pips

Some forex trading platforms online display changes as small as 1/10 pip. This means that a currency pair such as EUR/USD will be displayed down to the 5th decimal, while a currency pair such as EUR/JPY will be displayed down to the 3rd decimal.

What’s carry trade?

When a speculator obtains a low-interest internet loan in one currency, and converts the money into another currency to make a high-interest investment, it is called carry trade.

U.S futures sliding - watch TSLA, WMT, HD, TMUS, BRK/B, COST

The S&P 500 futures are sliding after they maintained their upward momentum yesterday

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The S&P 500 futures are sliding after they maintained their upward momentum yesterday. Investors' risk appetite was enlarged by moderna's announcement of positive trial results of its COVID-19 vaccine.

Later today, the U.S. Commerce department will report october retail sales (+0.5% on month expected) and september business inventories (+0.6% on month expected). The federal reserve will release october industrial production (+1.0% on month expected). The national association of home builders will post housing market index for november (85 expected).

European indices are searching for a trend. German foreign minister has declared he was "certain we will find a solution to EU recovery fund" after poland and hungary blocked the adoption of the 2021-2027 budget and recovery fund yesterday.

Asian indices closed slightly on the upside except the chinese CSI which ended in the red.

WTI crude oil remains bullish. The U.S. Energy information administration (EIA) projected that the U.S. Shale oil output would fall by 140K b/d to 7.51M b/d in december. Later today, american petroleum institute (API) will release the change of U.S. Oil stockpile data for november 13.

US indices closed up on monday, lifted by energy (+6.5%), automobiles & components (+3.01%) and banks (+2.95%) sectors.

Approximately 87% of stocks in the S&P 500 index were trading above their 200-day moving average and 86% were trading above their 20-day moving average. The VIX index declined 0.57pt (-2.47%) to 22.53, while gold rose $0.53 (+0.03%) to $1889.73, and WTI crude oil jumped $1.27 (+3.16%) to $41.4 at the close.

On the US economic data front, empire manufacturing unexpectedly dropped to 6.3 on month in november (13.5 expected), from 10.5 in october.

The U.S dollar dips on concerns regarding new coronavirus restrictions in some U.S states and worries about white house transition.

The dollar index fell 0.29pt to 92.352.

U.S. Equity snapshot

Tesla (TSLA), the electric-vehicle maker, is expected to surge as the company will join the S&P 500 index before the open of trading december 21, announced S&P dow jones indices.

source: tradingview, GAIN capital

Walmart (WMT), the retailer, climbs in extended trading as third quarter adjusted EPS and sales topped estimates.

Home depot (HD), the home improvement specialty retailer, is losing ground premarket after announcing a 1 billion dollars compensation investment for its frontline workers. Separately, the company posted third quarter comparable sales up 24.1%, beating estimates. EPS was up to 3.18 dollars vs 2.53 dollars a year earlier.

T-mobile US (TMUS), a wireless network operator, gained ground post market as berkshire hathaway (BRK/B), a holding company with a vast range of subsidiaries, disclosed a stake in the company.

Costco wholesale (COST), an operator of a chain of warehouse stores, popped after hours after announcing a special cash dividend of 10 dollars per share.

More from equities

Disclaimer: the information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Investing in a foreign currency

Follow this guide to get started with forex.

For some traders and investors, investing in a foreign currency offers an exciting opportunity to speculate on the exchange rates between currencies around the world. While it is risky, many can walk away with a profitable foreign exchange, also called forex or FX. If you are new to investing in foreign currencies, here's what you need to know to get started.

In this guide:

What is investing in foreign currency?

When you travel around the world, you can't always use U.S. Dollars for purchases. Instead, you have to convert your money into euros, yen, pesos, or whatever currency is used by the country you are visiting.

When buying or selling money to travel, you probably noticed the exchange rate. This tells you how much of the other currency you get per dollar, and vice versa. These rates change regularly. The price changes are based on economic news, projected economic data, and other factors.

In forex trading, you buy a large amount of foreign currency just like you would buy a stock, bond, or mutual fund. Instead of trying to earn a profit through the value of that investment going up, you hope the U.S. Dollar value of that currency will move in the direction you're hoping for (up or down). When it does, you earn a profit when converting the currency back into dollars.

Steps to investing in foreign currency

Here are the steps to invest in foreign currency:

Open a brokerage account

highlights

Types of foreign currency investments

While you can buy and sell foreign currency directly, many traders use different tools to invest in currencies. Here are a few popular methods to get into forex trading with a brokerage account:

Options — currency options give you the ability to buy or sell currency at a set price at a specific date and time. If the specifics work out in your favor, you can exercise the option for a profit. Learn more about options trading here.

Futures — futures work like options in many ways. But instead of having the option to exercise at a set time, you are obligated to exercise the contract when it's up. Learn more about futures here.

Funds –mutual funds and exchange-traded funds (etfs) often hold stocks and bonds, but they are not limited to those assets. A fund can also hold foreign currencies. Learn more about investment funds here.

Some investors may use one of these investments as a hedge. Currency hedging is a combination of trades designed to offset other risks. It may also be useful for expats who want to keep accounts in multiple currencies.

You could also get the currency directly from your bank in some cases. And some online banks allow you to hold foreign currencies. Forex is riskier and more complicated than some other types of investments, so your options here are a bit more limited than with other asset classes.

Risks and advantages of investing in forex

Foreign currency investing can be exciting, but it isn't for everyone. Before getting started with forex, it's a good idea to look at the risks and advantages of this type of investment.

Diversify your portfolio — many investors focus heavily on stocks and bonds. Forex is a popular alternative to diversify your portfolio.

Profit on international economic news — news and statistics enthusiastic can develop trading strategies around news releases, elections, and other current events.

Trade around the clock — unlike the stock market, which has fixed hours, forex markets are almost always open somewhere. Some forex platforms support 24-hour trading, so you never have to wait for the markets to open.

High volatility — news travels fast among forex traders, and these markets tend to move quickly. Forex markets are often more volatile than stock and bond markets.

Less predictable markets — when investing in U.S. Stocks, you can count on company guidance, financial reports, and other data to predict the future. Forex markets can take big swings with less warning.

Many bad investment options — investor junkie recommends working with reputable companies to manage your portfolio. There are some bad players in the industry that offer poor products with extremely high risk, which can be made worse with margin trading.

What you need to invest in foreign currency

To buy or sell foreign currency, you need a brokerage account that supports this type of asset. If your broker doesn't allow you to invest directly in foreign currency-related options or futures, most support a wide range of etfs and mutual funds that give you FX exposure.

We've already said it, but it's important to emphasize that foreign currency investing is very risky. You need to fund your account to get into the forex. Make sure it is money you can afford to lose if things don't go as planned.

Enter the world of forex with care

Forex is an exciting place to invest, but it's a more expert area of the investment landscape. Newer investors should start with less risky assets before dabbling in currencies.

Like every investment, there are risks and rewards with forex trading. You should look at all of your options before deciding. To try out forex without risking any real money, look for a brokerage with paper trading, which works like a stock market game. Once you feel comfortable, head to your favorite brokerage to get started.

Largest forex brokers in the world 2020

How to measure the biggest forex companies

Largest forex brokers by volume

Figure 1: major forex regulators around the world

Largest forex brokers in the united states

Below is the ranking of the biggest US forex brokers by volume:

AVDT*	rating	broker
15.5	B-	forex.Com (GAIN capital holdings inc)
10.7	B+	oanda (oanda corporation)
3.9	C-	interactive brokers (interactive brokers LLC)

* average volume of daily transactions in billion USD

Largest forex brokers in europe

Here you can see the largest forex brokers in europe:

AVDT*	rating	broker
13.4	A	XM group (trading point of financial instruments ltd, trading point of financial instruments pty ltd and XM global limited)
12.3	B	saxo bank (saxo bank A/S)
7.8	B+	ava trade (ava trade ltd)
6.8	B-	IG markets (IG group)
6.5	C	FX pro (fxpro financial services limited)
4.7	B+	swissquote (swissquote group holding SA)
4.4	B-	plus500 (plus500 ltd)
4.3	C-	etoro (etoro europe ltd)
4.2	C	markets.Com (safecap investments limited)
3.9	B-	CMC markets (CMC markets UK plc)
3.8	B-	FXCM (FXCM group)
3.6	C+	forex time (forextime limited)
3.5	B	dukascopy (dukascopy bank SA)
3.3	B-	FXDD (fxdirectdealer LLC)
3.2	C+	admiral markets (admiral markets group AS)

* average volume of daily transactions in billion USD

Figure 2: costas cleanthous, XM's CEO at the shanghai forex expo

Biggest forex brokers in australia by volume

AVDT*	rating	broker
18.9	A+	IC markets (international capital markets pty ltd)
6.7	A-	pepperstone (pepperstone group limited)
5.3	A-	AXI trader (axitrader limited)

* average volume of daily transactions in billion USD

Largest forex brokers from other jurisdictions

Here is the list of the largest forex brokers from the rest of the world:

AVDT*	rating	broker
11.5	A	hot forex (HF markets ltd)
9.7	A	vantage FX (vantage international group limited)
9.1	A-	IFC markets (ifcmarkets corp)
8.4	A-	exness (exness limited)
5.8	B	instaforex (instaforex group)
4.3	B+	roboforex (roboforex ltd)
4.1	B	iron FX (notesco limited)
3.8	B-	X-trade brokers (xtrade international limited)
3.7	B	eagle FX (eaglefx ltd)
3.5	B	IQ option (iqoption ltd)
3.3	B-	FX open (fxopen markets limited)
3.2	C	easy markets (EF worldwide ltd)
3.1	B	olymp trade ( inlustris ltd. )
3.0	C-	alpari (alpari limited)

* average volume of daily transactions in billion USD

Which large forex brokers are truly global?

Here are the largest truly global forex brokers:

AVDT*	rating	broker
18.9	A+	IC markets (australia, seychelles)
13.4	A	XM group (cyprus, australia and belize)
12.3	B	saxo bank (denmark)
11.5	A	hot forex (st. Vincent and the grenadines, cyprus, south africa, seychelles, mauritius)
9.1	A-	IFC markets (british virgin islands)
7.8	B+	ava trade (ireland)
6.5	C	FX pro (united kingdom)
5.8	B	instaforex (british virgin islands)