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Performing Trading Technical FAQs

Performing Trading

 

1. What are the differences between commission and swap?

Commission is charge based on per trade basis, mostly for ECN account. Swap is the amount that is credited or debited to an account due to positions held overnight.

 

2. Where do I find the current swap rate?

To check for swap rates open your MT4 platform. Then right-click on the currencies in the market watch panel. Then click on Symbols. Then click the currency pair in question. Then click Properties. You will see the swap short and long rate.

 

3. What kind of spreads do you offer?

To see our offer spreads, click here to view the spread table.

 

4. What is the minimum trade size?

The minimum trade size is 0.01 lot.

 

5. What constitutes Standard and Cent lots?

  • Standard Lot: 1 standard lot equals to 100,000 USD or equivalent
  • Cent Lot: 1 micro lot equals to 1,000 USD or equivalent

At CP Markets, you can trade Standard and Cent lots all under a single account. Open a Live Account or register for a FREE DEMO Account today.

 

6.How can I hedge my trade?

You can hedge your trade by simply trading to the other side. For example, if you’re buying long for 1 EUR/USD, you would simply be selling short for 1 EUR/USD to hedge the trade.

 

7. What is the maximum deviation?

Maximum deviation is the amount of slippage you are willing to accept. For example, if the market is at 1.5000 and you put in an order to buy, if your standard deviation is set to 2, you will be willing to accept any price from 1.5000 to 1.5002. This increases your chance of getting filled at the prices you want. We recommend a standard deviation between 0-2.

 

8. Is there a guarantee for a stop level?

Currently, we do not offer a guarantee for stop level. In normal market conditions, you would expect to get the price worst case within a pip or two. In volatile market conditions, we will try our best to honour the stop at the best possible price.

 

9. Do you have a minimum margin percentage before you close a position due to a margin call?

Our trading conditions for Margin Call and Stop Out Level are 100% and 30% respectively. We usually, but not always, close the position with the highest margin requirement first.

 

10. What is a market order?

A market order is a commitment to the brokerage company to buy or sell a security at the current price. Execution of this order results in the opening of a trade position. Securities are bought at ASK price and sold at BID price.

For example, if EUR/USD is priced at [BID] 1.3000/1.3003 [ASK]. It means in order to buy 1 unit of euro, you need to pay 1.3003 US dollar. 1.3003 is also known as the asking price. It’s the price that dealer willing to sell. Conversely, if you would like to sell euro against US dollar, you would sell at 1.3000. It’s also known as the bid price, meaning it is the price that dealer willing to buy from you.

As you see in the example above, there’s a difference between the bid and ask price. This difference is known as spread and varies depending on the currency pair being quoted. For our fixed and variable spreads, CP Markets does not charge a commission, as we are compensated on a percentage of the bid and ask spreads. In this case, if you enter a buy euro position, you are instantly down 3 pips. Therefore, you must wait for the price to come up to [BID] 1.3003/1.3006[ASK] in order to break even.

Stop Loss and Take Profit orders can be attached to a market order. Execution mode of market orders depends on the security traded.

 

11. What is a Stop Loss order?

A Stop Loss order is used for minimising losses if the security price has started to move in an unprofitable direction. If the security price reaches this level, the position will be closed automatically. Such orders are always connected to an open position or a pending order. The brokerage company can place them only together with a market or a pending order. The client’s terminal checks long positions with BID price to meet this order provision and the terminal uses ASK price for short positions.

For example, EUR/USD is trading at 1.3000/1.3003. You enter a market order to buy the Euro at 1.3000. To assist in risk management, you can preset a close price (Stop Loss order) where your position is automatically closed at that price. If you set your Stop Loss at 1.2950, when the EUR/USD price reaches 1.2950/1.2953, you are taken out of the market with a loss of 53 pips. 1.3003 [entry price] -1.2950 [close price] = 0.0053.

Please note: a Stop Loss price is not guaranteed, as no orders are. During volatile market times, your stop order may not be able to be honoured at the exact price desired, and you will receive the next best executable price.

To automate a Stop Loss order so that it follows the price, you can use a Trailing Stop.

 

12. What is a Trailing Stop?

As noted above, a Stop Loss is intended to minimize losses when the security price moves in an unprofitable direction. Conversely, if the position becomes profitable, a Stop Loss can be manually shifted to a break-even level. To automate this process, the Trailing Stop was created. This tool is especially useful when the price changes strongly in the same direction or when it is impossible to watch the market continuously.

A Trailing Stop is always attached to an open position and works in the client’s terminal, and not on the server like a Stop Loss. As soon as profit in points becomes equal to or greater than the specified level, the Trailing Stop automatically gives a command to place a Stop Loss order. The order level is set at the specified distance from the current price. Furthermore, if the price changes in a more profitable direction, the Trailing Stop will make the Stop Loss level follow the price automatically. However, if the profitability of the position falls, the order will not be modified any more. Thus, the profit of the trade position is fixed automatically.

 

13. How can I put Trailing Stop in my trades?

Trailing Stops work similarly to how Expert Advisors (EA) operates in that these features work locally on your MT4 platform on your PC. We do not have support capabilities to run these features on our servers because these tools are not attached to our server.

A Trailing Stop is a feature that allows a trader to minimize their risk and protect their profit. This feature is very useful when you want to modify your Stop Loss order in a rapid manner. However, please bear in mind that you must closely monitor your Trailing Stops because if for any reason your MT4 terminal loses its connection (i.e., update, Internet connectivity), the Trailing Stop feature will be disabled because it is not attached to our servers. Therefore we cannot assume responsibility for Trailing Stops that fail due to connectivity or platform issues.

 

14. What is a Limit Order (Take Profit)?

A Take Profit order is intended for realising a profit when the security price has reached a preset level. Execution of this order results in the closing of the position. It is always connected to an open position or a pending order. The order can be requested only together with a market order or a pending order.

For example, EUR/USD is trading at 1.3000/1.3003. You enter a market order to buy the Euro at 1.3000. To assist in risk management, you can preset a limit order (Take Profit) where your position is automatically closed at that price. If you set your limit at 1.3050, when EUR/USD price reaches 1.3050/1.3053, you are taken out of the market with a profit of 50 pips. 1.3050 [close price] -1.3000 [entry price] = 0.0050.

 

15. What is a pending order?

A pending order is the client’s commitment to the brokerage company to buy or sell a security at a pre-defined price in the future. These types of orders are used for the opening of a trade position provided the future quotes to reach the pre-defined level.

There are four types of pending orders available:

  • Buy Limit – buy provided the future “ASK” price is equal to the pre-defined value. The current price level is higher than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having fallen to a certain level, will increase;
  • Buy Stop – buy provided the future “ASK” price is equal to the pre-defined value. The current price level is lower than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on increasing;
  • Sell Limit – sell provided the future “BID” price is equal to the pre-defined value. The current price level is lower than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having increased to a certain level, will fall;
  • Sell Stop – sell provided the future “BID” price is equal to the pre-defined value. The current price level is higher than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on falling.

 

 

16. How can I put Trailing Stop in my trades?

Yes, you can trade oils (XTIUSD), Metal (Silver & Gold) and major stock indices (S&P 500, Nikkei 225, Nasdaq 100 and ASX 200).

 

17. Why do I see duplicate trading symbols in my market watch panel?

Due to the implementation of some of our newest CFD’s, you will notice some “duplicate” greyed out symbols in your market watch window. These symbols do not affect your trading account in any way and can be disregarded. Due to the limitations of the MT4 Trading Platform, we are unable to hide these symbols from your account on your behalf. These symbols are needed for the calculation of accounts in deposit currencies other than USD. To hide these symbols from your account manually, right-click on the greyed-out symbol and select hide.

 

18. Can I trade during a news release and volatile markets?

Yes, however, the risk is extremely high at that time.

 

19. Does the spread changes during news release?

Usually yes, spreads are known to increase due to volatile conditions. It is not within our side but depending on our liquidity provider.

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