Trading Examples

Trading Examples for FXCM

The MetaTrader 4 trading software which is used at FXCM includes a full back office function that make it is designed to make it easier for the trader to realize the value of open positions as well as the profit and loss of closed trades. However, it is important that traders understand how a trade works and how to calculate profits and losses manually. The FXCM Exchange Market (FX) is the arena in which one nation's currency is exchanged for that of another at a mutually agreed rate. There are over 150 currency pairs that can be traded but the most liquid with the highest turn-over are the "majors".

Primary (base) vs. Secondary Currencies

The primary currency, or the base currency, is the reference that defines the contract size. The profit and loss calculation however is always on the secondary currency. All currencies are traded in pairs, with the 'base' currency being the first currency of the pair and the 'quote' or 'term' currency being the second currency in the pair. Examples are as follows: