Forex

RAW SPREAD from

0 pip

LEVERAGE to

1:200

Minimum deposit of

500€

Opening an account is 

Easy and Fast

1. WHAT IS FOREX?

Created in 1971, the Forex (Foreign Exchange Market) is the name given to the foreign exchange market. It consists of buying and selling foreign currency in a decentralized international market. Forex is the largest liquid market in the world and is open 24 hours a day from Sunday evening to Friday evening with a 10-minute break every day.

2. HOW DOES FOREX TRADING WORK?

Forex is the currency market, where currencies are quoted in pairs; the value of one is expressed in terms of another currency. Investors take positions according to the change in the balance of power within a currency pair.
An example of this is the currency pair EUR/USD (Euro vs. US Dollar). The first currency (EUR) is called the 'base currency' and the second currency (USD) is called the 'counter currency'. The value of the pair is the value of one Euro in US Dollar.

• Buying the EUR/USD pair : Bets on the rise of the Euro against the US Dollar.
• Sell EUR/USD pair : bets on the Euro falling against the US Dollar.

3. WHAT ARE THE ADVANTAGES OF TRADING ON THE FOREX?

Currency trading offers many advantages that make this asset class a popular choice among traders. The main advantages of trading on Forex :

• A 24-hour market from Sunday evening to Friday evening with a 10-minute break each day.
• A market in which one has the ability to trade on margin with the use of leverage
• A very broad market with prices that react quickly to current events, which allows for constant opportunities.
• A highly liquid market, which means that spreads remain low and facilitate the entry and exit of transactions.
• A market in which one can be in a buy or sell position

4. WHY TRADE FOREX WITH GRAVITY MARKET?

Whether you are an experienced trader or a novice in the field, Gravity Market offers you many advantages that will help you achieve your goals :

• 50 tradable currency pairs
• Spreads from 0.4 pip *
• Low VWAP spreads
• Leverage up to 1:200 **
• From 0.01 lot
• 0 Pip of raw spread
• Quick deposit and withdrawal

Gravity Market supports the Metatrader 4 platform, one of the features of which is the calculation of your gains and losses on a pip-by-pipe basis. Thus, as the market evolves your account balance is automatically updated via your platform's functionalities. You always know your profits and losses, freeing up you time for active trading.
Another advantage is the capital needed to get started. You can access the same markets as institutional participants can, even with limited resources and with a minimum deposit of EUR 500.

* On some currencies such as EUR/USD

** For a PRO account otherwise 1:100 *** For Standard account and Active Trader

*** Gravity Market reserves the right to reduce the levers when the risk taken by the user is too high.

5. CURRENCY PAIRS

Major pairs are the main currency pairs traded in Forex. They represent the largest volume among buyers and sellers and therefore benefit from the tightest spreads.

Major pairs : EUR/USD, USD/JPY, GBP/USD, USD/CHF

Commodity currency pairs : AUD/USD, USD/CAD, NZD/USD

However, it can be interesting to trade other currency pairs during major economic events that can be seen as an opportunity on a specific currency pair.

Currency pairs can be seen as a guide, it is not possible to trade them. (for example USD/CZK)

 

6. THE SPREAD

The spread, also known as the bid-ask spread, is the difference between the price at which you can buy a product and the price at which you can sell it. The spread is given by the liquidity provider.
The broker can increase the spread in order to make money, but can also choose not to touch it and take a fixed commission separately. In the latter case, the spread is defined as a zero raw spread.

Gravity Market applies a zero raw spread : customer spreads are the market spreads for all accounts.

7. CONTRACT SIZES

In Forex trading, most currency pairs are quoted in US dollars. Forex contract sizes are 100,000 units of the first currency in the Forex pair. If you are trading a EUR/USD contract, your position size will be 100,000 Euros. A USD/JPY contract is equal to 100,000 USD. Therefore, you can buy mini-lots or micro-lots equal to 10,000 and 1,000 units respectively.

8. THE COMMISSION

When the trader wants to place an order, he has to pay a commission to the broker on the face value of a lot.

For example, for a PRO account on the EUR/USD pair, the trader will pay 1.50 USD for entering position and will pay another 1.50 USD for closing position, i.e. 3 USD in total.

9. MARGIN TRADING

When you trade in Forex, you borrow the first currency in the pair to buy or sell the second (depending on whether you are buying or selling the pair). Because the value of pairs is quoted in hundredths of a cent, it is difficult to get a significant return on your investment with a small amount of capital.

Take the EUR/USD pair as an example, assuming you buy a micro-lot (0.01 * 100,000 = 1,000 units) and the pair trades at 1.20. So, if the pair goes to 1.22 you earn 1,000*0.02 EUR = 20 EUR for every 1,000 EUR invested.

The previous case was when you take a 100% margin on your position. As you can see, the return is low in relation to the amount invested. This is why there is leverage.
To trade with leverage, the idea is to anticipate the margin required for the size of your trade. For example, with a leverage of 1:30, you only need to have EUR 1,000 of margin to take a position of EUR 30,000.

Using the example from earlier, if you put in EUR 1,000 of your capital and use 1:30 leverage, you invest 1,000*30 = EUR 30,000 giving you 30,000 units.

When the pair goes to 1.22 you no longer earn 20 EUR but 30,000*0.02 = 600 EUR. *

However, leverage not only increases your potential gains, but can also cause you to incur significant losses that can sometimes exceed the capital available in your account. Therefore, it is best to start with transactions that do not use all your capital and with low leverage in order to get to know the market. 

* Does not include commissions

10. THE PIPS

The pip means "point in percentage". In Forex, it means the fourth decimal place in a currency pair that corresponds to the smallest unit of quotation except for Forex parities in JPY (Japanese Yen) where the pip is the second decimal place.
The pip is a unit that measures changes in a financial asset based on its smallest quotation unit. This is a standard unit of measurement for all assets and is used to facilitate communication between analysts and traders around the world when talking about changes in an asset.

11. THE SWAP

Forex swap (also called Forex rollover) is interest paid by the online broker's client for open positions from one day to the next. This interest rate is applied to any nominal amount whose trading position is open for more than 24 hours.
When you buy a Forex pair you commit to resell it on a spot date. This exchange (swap) for a new day is the swap rate that is applied to our position.
The Forex swap will not be the same on the EUR/USD and USD/CAD pair. In fact, it varies according to several factors :

• The online broker
• Type of position : buy or sell
• The negotiated instrument
• The number of days the position is open
• The nominal value of the position

The Forex swap rate is updated every Wednesday at Gravity Market and is calculated as follows :
Short-term amount in USD * Spot rate of the currency = Short-term amount of the currency
(Short-term amount in USD * Spot interest rate Next USD/36 000) + Short-term amount in USD = Long-term amount in USD
Short-term currency rate + swap pips = Long-term currency rate
Long-term amount in USD * Long-term currency rate = Long-term currency amount
Long-term currency amount - Short-term currency amount = Currency difference
Difference in quote/(Short-term currency amount/36,000) = Swap interest rate
The interest rate of the swap is given in USD per 10,000 currency units.

The Spot Next USD interest rate as well as the short and long-term rates of the currency are determined by the prime brokers.

Other things to know :
• The rates are given by the liquidity provider
• The rollover is calculated on the basis of the total value of a trade and not in relation to the margin used.
• Banks are closed on weekends, but they continue to charge interest. Gravity Market therefore charges three days of rollover on Wednesday evening at the close for positions held open over the weekend.

12. VWAP

The VWAP (Volume-Weighted Average Price) is the price at which all orders have been executed, weighted by the volume of orders.
When we buy or sell a large volume of orders, there is no certainty that we will get all of our orders at the desired price. So to have a maximum chance of having a large volume of orders at the desired price, we must look to see if the broker has significant liquidity and therefore offers low VWAPs.
Note that the VWAP can also be used by traders as an intraday trend indicator (less than one day).

13. CURRENCY PAIRS OFFERED BY GRAVITY MARKET

14. COMMISSIONS OFFERED BY GRAVITY MARKET

• Pricing and Trading starts every Sunday at 17:10 (US) Eastern Time (GMT -4:00).)
• Pricing and Trading ends every Friday at 16:55 (US) Eastern Time (GMT -4:00).
• Pricing and Trading are interrupted daily for a system reset from 16:55 to 17:10 (US) Eastern Time.

TRADABLE CURRENCY PAIRS

NON-TRADABLE CURRENCY PAIRS GIVEN AS AN INDICATION

¹ In a trade you place one order to buy an asset and a second order to sell it.
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