Forex Trading Market Introduction

The foreign exchange market (also known as Forex or FX market) has become the largest financial market in the world since it was opened to individual traders in 1999. Previously, the forex market was only open to a few banks and financial institutions, but now it is a new international market with high leverage trading opportunities and challenges that other markets cannot compare to.

24-hour Market Opening

One important characteristic of the forex market is that it is open 24 hours a day during normal business hours, allowing traders to trade anytime they want (from Sunday 17:00 to Friday 17:00 Eastern Time), with weekends being non-trading days. The 24-hour market opening is undoubtedly attractive to traders, as it means they have the opportunity to trade day and night.

Online Trading Anytime, Anywhere

The forex market is also known as an over-the-counter market. Unlike other financial markets, forex trading does not require a centralized trading venue (e.g., stocks need to be traded on stock exchanges). All forex trading is conducted through modern online trading technology that connects banks, financial institutions, and individual forex traders worldwide for international currency buying and selling. This also means that traders can trade forex anytime, anywhere, as long as they have internet access.

High Liquidity

The forex market has a daily trading volume of $6 trillion, making it the largest market in terms of trading volume. Data shows that the daily trading volume in the global forex market is equivalent to one month of trading volume on Wall Street.

High Leverage

In traditional markets, traders often cannot enjoy the convenience and financial advantages of high leverage. By trading with SevenWonders, traders can enjoy leverage of up to 100:1.

Reliable Technical Analysis

Due to the strong trend patterns in currency trading, traders who rely on technical analysis can use it to predict currency trends, breakouts, and determine entry and exit points.

Fundamental Analysis

Currency prices reflect the supply and demand balance between currency pairs. The two main factors affecting currency supply and demand are interest rates and the overall economic conditions of the country where the currency is located. Fundamental indicators, such as foreign investments, PPI, CPI, GDP, etc., reflect the overall economic conditions of a country and are also factors that change the supply and demand balance of its currency.        SevenWonders reminds you to consider the risks of increasing leverage. Relatively small fluctuations in the market may be magnified proportionally and have a significant impact on your deposited or to-be-deposited funds, which may work against you or in your favor. You may lose all your original margin and need to deposit additional funds to make up for it.

Forex Trading Terms and Conditions

Leverage and Margin 

One of the reasons why the forex market attracts small-scale individual traders is the option of high leverage. Using leverage reduces the amount of collateral, i.e., margin, and provides traders with opportunities to maximize profits with small investments. SevenWonders offers leverage of up to 100:1, which means that for a contract of 100,000 currency units, a minimum of $1,000 is required as margin. However, leverage is a double-edged sword, as it can create both high returns and high risks. Therefore, using leverage involves both high potential profits and high risks.

Margin Call

SevenWonders has implemented a margin call policy. When the account margin is insufficient, the system will prompt for a margin call, and all positions will be forcibly closed to prevent customers from incurring greater financial losses. Margin calls are real-time and automatic, and implementing the close of positions ensures that the amount of used margin in the account is protected, avoiding further losses from market trends.

Contract Size

The contract size refers to the smallest currency share for each traded lot. Forex trades are conducted using standard contracts, where buying or selling one standard lot is equivalent to a contract of 100,000 units. Clients can choose contract sizes according to their preferences and actual situations. SevenWonders uses a trading volume of 100,000 contracts as the common trading unit.

Hedging Function

Hedging is an important risk management tool for traders who can use it correctly. By hedging a trade, you can go long and short on a currency pair at the same time for a specified period without requiring additional margin. Holding two opposite positions can hedge risks because no matter which way the market moves, one position will show profits while the other position will show equal losses.

Order Types

SevenWonders provides various order types for risk management in forex trading, including market orders, pending orders, stop loss/take profit orders, and OCO orders.

Market Order - An order to buy or sell at a specific price that is executed at the current exchange rate.

Pending Order - A market order will be executed immediately after placing the order, while a pending order will be executed only when market conditions reach the set price.

Stop Loss/Take Profit Order - Stop loss/take profit orders are the most widely used risk control tools. A stop loss order is executed at a specific price to limit losses, while a take profit order is executed at a specific price to lock in profits.

OCO (One-Cancels-Other) Order - An OCO order allows you to place two pending orders simultaneously, and when one order is removed or executed, the other order will be automatically canceled.

Overnight Rollover

In the spot forex market, all trades must be settled within two business days. If a position is not closed by 4:30 PM Eastern Time, it will be automatically rolled over to the next trading day, and overnight interest will be credited or debited. Holding positions overnight on Wednesday will usually incur triple the interest, with two-thirds of the interest coming from the settlement of interest over the weekend. Overnight interest varies with changes in interest rates for different currencies. Buying or selling different currencies will result in different overnight interest rates.

SevenWonders can provide you with competitive interest rates, which are earned or charged based on the direction of your open positions and the interest rate differential between the two currencies.