Forex or FX, short for foreign exchange, is a global decentralised market, where you can trade currencies. Currencies are always traded in pairs like EURUSD and USDJPY, and exchange rates are determined by the buying and selling of one for another.

The forex market is the largest and most liquid financial market in the world, with the highest daily trading volume. Although banks and institutions make up a big portion of the market, as a retail trader, you can speculate on the rising and falling currency prices to try and make a profit.

When trading Forex with an online broker, you’re not trading the underlying asset, you’re predicting price changes in the currency pair you’re trading.

Open an account to start trading Forex.

The spread is the difference between the bid and ask prices on a trading platform. It is also often referred to as the bid/ask spread. Spreads are one way to measure market liquidity and translate to transaction costs.

Market execution is a method you can use to open and close positions on the market. Market orders are always filled at the best available price. When compared to instant execution, market execution is:

• Faster (orders are executed in milliseconds)
• Guaranteed to execute orders with no requotes (the price comes directly from the market)
• More prone to slippage during high volatility (which may result in better or worse prices)

At Netglider, we always provide you with superior market execution, ensuring your orders are placed quickly and at the requested price. This also means that you’re almost 100% guaranteed to have your order filled.

A reverse stock split, also known as a stock consolidation or share rollback, is when a company decreases the number of its shares by a specific multiple.

The most common split ratios are 1:2 and 1:5 (one-for-two and one-for-five). The second number in the ratio is the value the shares will be divided by.

At Netglider, reverse stock splits are treated the same as on the actual stock exchange. Your position size is adjusted based on the split ratio, leaving the total value of your position unaffected. So, if a 1:2 reverse stock split happened, and you were holding 100 shares, after the split you’d have 50.

Limit Downs and Limit Ups are price thresholds set by exchanges to limit movements in the financial markets during times of high volatility, giving traders more time to react.

When an instrument crosses a Limit Down or a Limit Up, trading halts. Limit Downs come into effect when market prices tumble, while Limit Ups are for when prices spike.

A fractional Stock CFD is a portion of 1 share. Fractional stock allows you to buy part of a Stock CFD without paying the full price.

A trailing stop is a type of stop loss order popularly used by traders as part of their risk management strategy. It closes a previously opened position at a percentage level you specify, usually below the current market price for long positions and above it for short positions. Regardless of your position, it’s best never to set your trailing stop too close to the current market price.

CFDs are financial derivatives that involve an agreement to cash-settle the difference between the opening and closing prices of an instrument.

They allow you to speculate on the price of various instruments including forex, commodities, and indices, without taking ownership of the underlying asset. CFDs are usually traded over shorter timeframes.

An IPO, also known as floating or going public, is when a privately owned company lists its shares on a stock exchange, making them available to the general public.

Companies often use IPOs to raise new equity capital, and to monetise investments made by private shareholders, including company founders and private equity investors.

Swaps refer to the interest you pay or earn on any orders you keep open overnight. They are also known as rollover fees. Essentially, a swap is the interest rate difference between the currencies in the pair you’re trading, and is credited or debited, depending on the position you’re holding.

‘Close by’ is a functionality available on the MT4 and MT5 trading platforms, that allows you to simultaneously close two opposite positions on the same financial instrument.

In such cases, buy orders need to be closed with a sell order, and sell orders with a buy order.

The benefit to using this functionality is that it can help you avoid paying the closing spread on either of the trades.

A reverse merger is when a private company buys a publicly traded company.

Usually in such cases, the publicly traded company is taken private, and its shares are delisted from the relevant stock exchange.

Market capitalisation, or market cap for short, is the value of a publicly traded company’s total outstanding shares. You can calculate market cap using the equation below:

Market Cap = Share Price x Total Number of Shares Outstanding

A take profit is an order type popularly used by traders as part of their risk management strategy. It closes a previously opened position at a profit level you specify, helping you lock in any money earned, in case the trade moves against you later.

Take profit points are always set above the current Bid price for long positions, and below the current Ask price for short positions.

For more information, watch our video tutorial.

Commodities are physical goods that are bought for their utility value. They are broadly divided into three categories:

• Agricultural products: Corn, wheat, soybeans, sugar, and coffee
• Metals: Gold, silver, platinum, and palladium
• Energies: Crude oil and natural gas

Commodity prices are determined by the spot market, where they are traded for immediate delivery. However, you can speculate on commodities online by trading derivatives, which are contracts that don’t involve ownership of the underlying asset.

Open an account and start trading commodities today!

A rights issue is an opportunity a company may offer to its existing shareholders, whereby they are able to buy additional new shares of company stock.

This provides shareholders with securities known as rights. They allow for the purchasing of new, discounted shares, on an agreed upon future date.

At Netglider, rights issues are treated like cash adjustments, where the value of the adjustment is based on the value of the rights issue. In such cases:

• For long positions, you will be credited the calculated amount
• For short positions, you will be debited the calculated amount

A stop loss is an order type popularly used by traders as part of their risk management strategy. It closes a previously opened position at a price you specify, helping to limit potential losses on a trade if the market moves against you.

Essentially, a stop loss is a limit point that you add to your order. Once this limit point is reached, your order is automatically closed. Stop loss points are always set below the current Bid price for long positions, and above the current Ask price for short positions.

For more information, watch our video tutorial.

The bid and the ask are the prices displayed on online trading platforms. The bid is the highest price a buyer is willing to pay for an instrument, while the ask (also known as the offer) is the lowest price a seller is willing to accept for one.

When buying an instrument, you’ll need to focus on the ask price. When selling, you’ll need to pay attention to the bid price.

A merger is when two companies come to an agreement to voluntarily unite and create a new company. There are several types of mergers including:

• Conglomerate
• Congeneric
• Market Extension
• Horizontal
• Vertical

The main reasons why companies may choose to merge include:

• To expand the company’s reach
• To expand into new market segments
• To gain market share

When a stock is delisted, it is removed from the stock exchange as a publicly traded security.

This can be voluntary or involuntary, and occurs at a company for various reasons:

• Cessation of operation
• Merger with another company
• Privatisation
• Failure to meet the exchange’s listing requirements

Slippage is when your order is executed at a different price to the one requested. It can be positive or negative, meaning your order can be executed at either a more favourable price, or a worse one.

Market prices can change quickly, especially in periods of high volatility like during economic data releases. Slippage is more likely to occur during these periods, due to delays between your order being placed, processed, and executed.

One way to protect your trades against slippage is to make use of limit orders.

Cryptocurrencies, or cryptos for short, are digital-only currencies that use cryptography to confirm transactions. The market works as a decentralised exchange via a computer network and is not reliant on central authorities like banks or governments for maintenance or regulation.

The most actively traded cryptos are Bitcoin and Ethereum.

Open an account and start trading cryptos today!

‘Multiple close by’ is a functionality available on the MT4 and MT5 trading platforms, that allows you to simultaneously close multiple opposite positions.

In cases where you have two opposite orders, you can use one order to close the other, and you’ll gain or lose the net difference of the positions.

A demerger is when a company’s various operations are split into multiple components. This happens for a variety of reasons, including:

• A desire to restructure and minimise production costs
• Government intervention due to antitrust laws

At Netglider, when a demerger happens, we treat it like a cash adjustment, where the value of the adjustment is based on the value of the demerger. In such cases:

• For long positions, you will be credited the calculated amount
• For short positions, you will be debited the calculated amount

Shares outstanding are all the shares of a company that have been authorised, issued, and purchased by investors that are still holding them. These are different to treasury shares, which are held by the company itself, and include no exercisable rights. Together, shares outstanding and treasury shares make up the total number of issued shares at a company.

The spot price is the current market price of an instrument, applicable when looking to buy or sell immediately.

The futures price is the price of an instrument at some point in the future. Futures contracts allow you to delay payment and delivery, which happen on predetermined dates, enabling you to speculate on the possible future price of an instrument. Futures are also often used for hedging.

A futures contract is an agreement to buy or sell a financial instrument at a predetermined price and time in the future.

Futures contracts have a limited lifespan, meaning they have pre-set open and expiration dates. At the time of expiration, all open positions in the contract will close.

We don’t automatically rollover positions to the next contract. So, if you want to maintain an open position on the underlying instrument, you’ll need to open a new position in the next contract once it goes live.

An acquisition is when one company buys a majority or all the shares of another company, gaining control. The control threshold is 50% or more of a company’s shares.

Although large-scale acquisitions of well-known companies tend to dominate the news, mergers and acquisitions between small and medium-sized firms are a lot more common.

There are 3 ways to gain control of a company:

• An acquisition, often considered the friendly way
• A takeover, often considered the hostile way
• A merger, which creates a new company by combining the previous two

Mergers and acquisitions happen for various reasons, including to:

• Gain economies of scale
• Provide additional diversification
• Gain greater market share
• Increase corporate synergy
• Reduce costs
• Provide access to new technology or products

Margin is the minimum amount of money you need to have in your trading account to open new or maintain existing positions on the market

Margin level is calculated using the formula (Equity/Margin) x 100%, where Equity reflects your trading account balance, plus or minus any profits or losses from open positions.

Free margin, meanwhile, refers to the funds you have available to open and maintain positions, and is calculated by subtracting Margin from your Equity.

A stock split is when a company increases the number of its shares by a specific multiple. This is usually done to improve the stock’s liquidity.

Although the total number of shares outstanding increases, the dollar value of these shares remains the same. This is because the share price decreases proportionally by the stock split multiple.

The most common split ratios are 2:1 and 3:1 (two-for-one and three-for-one). This means, for each share held prior to the split, an investor will receive 2 or 3 shares after it happens.

At Netglider, stock splits are treated the same as on the actual stock exchange. Your position size is adjusted based on the split ratio, leaving the total value of your position unaffected. So, if a 2:1 stock split happened, and you were holding 100 shares, after the split you’d have 200.

Forex trading software is an online trading platform provided to each Netglider client, which allows them to view, analyze and trade currencies, or other asset classes

In simple terms, each Netglider client is provided access to a trading platform (i.e. software) which is directly connected to the global market price feed and allows them to perform transactions without the help of a third party.

Forex trading market participants can fall in any of the following categories:

• Travellers or overseas consumers who exchange money to travel overseas or purchase goods from overseas.
• Businesses that purchase raw materials or goods from overseas and need to exchange their local currency to the currency of the country of the seller.
• Investors or speculators who exchange currencies, which either require a foreign currency, to perform trading in equities or other asset classes from overseas or either are trading currencies with the aim of making a profit from market changes.
• Banking institutions that exchange money to service their clients or to lend money to overseas clients.
• Governments or central banks that either buy or sell currencies and try to adjust financial imbalances, or adjust economic conditions.

In forex trading, some currency pairs are nicknamed majors (major pairs). This category includes the most traded currency pairs and they always include the USD on one side.

Major pairs include: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, NZD/USD

In forex trading, minor currency pairs or crosses are all currency pairs that do not include the USD on one side.

In forex trading, exotic pairs or exotics refers to currency pairs that include a major currency paired with the currency of a smaller or emerging economy. Exotic pairs tend to be traded less frequently, in comparison to majors. They usually have more volatility and are less liquid.

Equity indices, or stock indices, are in simple language indexes that represent the overall price of a basket of underlying stocks.

The major equity indices (stock indices of the world) include, but are not limited to, the following:

• S&P 500
• Dow Jones
• Nasdaq
• FTSE100
• Nikkei225
• DAX
• CAC40
• Euro Stoxx 50
• ASX200

Stock indices are in most cases a representation of the overall picture of the stock market, which their basket belongs to. In most cases, the underlying stocks that belong to a stock index consist of the most influential (largest capitalization) companies.

During any trading day, stock prices of specific companies will go up or down. Since a stock index is a compilation of a basket of underlying stocks, its actual price will move up or down based on the overall dynamics (mathematical and statistical formula) of which each stock price contributes to its final price.

The following are useful points to understand when trading equity indices:

• All the stocks in a specific equity index (e.g. Dow Jones) are subject to a selection process and might be substituted by another company if their overall trading performance is overcome from a newcomer. In other words, the companies that belong to a basket are not guaranteed to be always the same.
• The determination of the influence of a specific stock to the overall stock index includes calculations and rules. Not all stocks that add up to the basket are treated as equal. In simple words, the overall price of stock index is not a simple addition of the prices of the stocks and a division by the number of stocks.
• A stock index shows the general consensus and can be considered a benchmark of performance of the overall stock market with historical value.
• As mentioned in point 2, since not all stocks that belong to the basket are treated as equal, more weight is given to the index from companies with larger capitalization. This means that if the stock of a specific large company falls for any reason, the overall index will follow it even though the rest of the stocks in the basket might not be falling.
• As mentioned in point 1, the underlying stocks that belong to the basket, which is called an index, change over time. Over a historical period, the index itself does not always represent the same basket of stocks.

Thematic Indices track and measure the performance of a particular theme, sector, or industry within the financial markets. These indices are constructed to provide traders and investors with insights into the assets, companies, or investments that are related to a specific theme or trend, allowing them to gauge the success and growth of those themes within the market.

Thematic Indices can cover a wide range of themes, including but not limited to technology, healthcare, green energy, e-commerce, ESG principles, cybersecurity, blockchain and consumer discretionary. Overall, thematic indices provide a structured and quantitative way to monitor and invest in specific market themes or sectors, enabling traders and investors to make informed decisions based on their investment preferences and outlooks.

The only fee for this product is the spread and swap charge in case you choose to leave a trade open overnight. No other commissions or charges are applied.

All Thematic Indices are total return indices which measure the performance of a group of constituents by assuming that all cash distributions are reinvested, in addition to tracking the constituents' price movements. Total return indexes are available as gross-return versions, calculated with a full-dividend reinvestment.

Therefore, due to the reinvestment of dividends on the Thematic Indices, no downward adjustment occurs due to a constituent paying a dividend and thematic indices are not subject to dividend adjustments.

Thematic Indices are available on the MT5 platform.

Thematic Indices are available on Standard Accounts and Ultra Low Standard Accounts.

In spot CFDs for commodities, prices are based on the two nearest futures contracts in the underlying market, as these are typically the most liquid. Over time, our undated price gradually transitions from the nearest (front-month) contract to the next (back-month) contract.

Between the expiry dates of these contracts, the price moves incrementally from the front-month contract toward the back-month contract. The front-month price may be higher or lower than the back-month price, depending on market conditions.

When holding a spot position overnight, a Fair Value Adjustment is applied, consisting of two parts:

• Nightly Basis Adjustment: Reflects the daily shift in our undated price from the front-month contract to the back-month contract.
• Daily Admin Fee: A small, standard fee for maintaining the position.

The price difference between the two futures contracts depends on the commodity and market conditions. If the difference is larger, the daily shift in our undated price increases, resulting in a higher adjustment, which is either debited or credited to your trading account.

This Fair Value Adjustment ensures that our spot price accurately reflects the ongoing transition between the two futures contracts and includes the associated admin fees.

MT4 (MetaTrader 4) and MT5 (MetaTrader 5) are popular trading platforms used by traders to buy, sell, and manage financial instruments like Forex, Stocks, and Commodities.

• MT4 is widely known for its simplicity, reliability, and powerful charting tools, making it ideal for forex traders.
• MT5 is an upgraded version with more advanced features, including additional timeframes, more order types, and greater support for Stocks and other asset classes.

Both platforms offer real-time market analysis, automated trading through Expert Advisors (EAs), and customisable charts to suit a trader's needs.

Brokers, for example Netglider, are financial intermediaries that facilitate the buying and selling of financial assets, such as stocks, forex, commodities, and other securities, on behalf of traders or investors. They connect individuals or institutions to financial markets and execute trades according to the client’s instructions.

Forex trading involves buying one currency while simultaneously selling another, based on the current exchange rate. To participate, clients must open an account, deposit a base currency (Currency A), and exchange it for another currency (Currency B) through long or short trades, depending on their market outlook.

Forex operates on currency pairs, where the first currency is called the base currency, and the second currency is the quote currency. For example, if the EUR/USD exchange rate is 1.2345, it means that 1 euro is worth 1.2345 US dollars. A higher rate indicates the euro is stronger, while a lower rate indicates it's weaker.

Trading is available 24 hours a day, five days a week, from 22:00 GMT on Sunday to 22:00 GMT on Friday. Market hours are aligned with the operating hours of the major global financial centres, including London, New York, Tokyo, and others.

There are numerous factors that influence currency prices in the forex market on a daily basis. However, six major factors are commonly considered the primary drivers of price fluctuations:

• Differentials in inflation
• Differentials in interest rates
• Current account deficits
• Public debt
• Terms of trade
• Political and economic stability

To better understand the impact of these factors, it's important to remember that currencies are always traded in pairs. When one currency depreciates, the other typically appreciates, as the exchange rate reflects the relative value of one currency against another.

As a retail forex trader, the key factors that impact your trading are trade execution quality, speed, and spreads. These factors are interrelated and affect each other.

The spread is the difference between the bid and ask prices of a currency pair (the buy and sell prices). Essentially, it is the price at which your broker or bank is willing to buy or sell the currency pair for you. However, the significance of spreads is only realised when coupled with proper execution.

In the forex market, execution refers to how quickly a trade is processed and filled at the quoted bid/ask price. Even if the price is favourable, it becomes irrelevant if your broker or bank cannot execute your order quickly enough to secure that price.

Liquidity refers to how easily an asset can be bought or sold in the market without affecting its price significantly. In financial markets, an asset is considered highly liquid if it can be quickly converted into cash with little or no price fluctuation.

In the context of forex trading, liquidity refers to the ability to buy or sell currencies at stable prices. Major currency pairs, like EUR/USD or GBP/USD, are typically highly liquid because they are traded in large volumes, while less popular currency pairs or assets may have lower liquidity, making it harder to execute trades without impacting the price.

High liquidity is beneficial for traders as it enables faster execution of orders and tighter spreads.

Volatility refers to the degree of price fluctuation of an asset over a specific period. High volatility indicates that the asset's price can change rapidly and by large amounts, which can create both opportunities for profit and risks for traders. Traders often watch volatility closely, as it can affect market conditions and the potential for price movements, making it a crucial factor in risk management and strategy development.

Leverage is the ability to control a large position in the market with a smaller amount of capital. It allows traders to borrow funds from a broker to increase the size of their trade, amplifying both potential profits and risks.

For example, with 10:1 leverage, a trader can control a position worth 10 times their initial investment. If you invest $1,000, with 10:1 leverage, you can trade up to $10,000 in the market.

While leverage can magnify profits, it also increases the risk of significant losses. It’s important for traders to use leverage carefully and manage risk to avoid exceeding their margin capacity.

A pip (short for "percentage in point" or "price interest point") is the smallest unit of measurement for price movement in the forex market. It represents the change in value between two currencies in a currency pair. For most currency pairs, a pip is equivalent to 0.0001, or one ten-thousandth of a percent.

For example, if the EUR/USD pair moves from 1.1050 to 1.1051, it has moved 1 pip. However, for currency pairs involving the Japanese yen, a pip is typically 0.01, or one hundredth of a yen. Pips are used to measure price changes and determine profit or loss in forex trading.

A lot is a standard unit of measurement in forex trading that represents the size of a trade or position. The most common lot sizes are:

• Standard lot: 100,000 units of the base currency.
• Mini lot: 10,000 units of the base currency.
• Micro lot: 1,000 units of the base currency.

The lot size determines the value of each pip movement. Larger lot sizes (like standard lots) mean higher exposure and potential profit or loss, while smaller lot sizes (like mini or micro lots) allow for smaller trades and reduced risk. Traders can choose the lot size based on their risk tolerance and trading strategy.

In forex trading, quantity and lots both refer to the size of a trade, but they are measured differently:

• Lots: A lot refers to a standardised unit of measurement for trading, with the most common sizes being standard lot (100,000 units), mini lot (10,000 units), and micro lot (1,000 units). A lot size defines how much of the base currency you are trading.
• Quantity: The quantity in forex refers to the exact amount of the asset being traded. It can be expressed in terms of lots or individual units. For example, if you’re trading 2 mini lots of EURUSD, the quantity would be 20,000 units (2 x 10,000 units).

While lots are more commonly used in forex markets, quantity gives traders flexibility to specify the exact number of units they want to trade, regardless of the lot size. It allows for more precise control over the trade size. On the other hand, a lot is a standardised unit of measurement used to quantify the size of a trade or position. For example, in a Standard Account if you trade 1 lot of EURUSD you are going to trade 100,000 units of EUR.

The amount of units is different between the asset classes which can be viewed in symbol information of each instrument or through our website.

A Market Order is an order to buy or sell an instrument at the best available price in the market at the time the order is placed. The order is filled immediately at the current market price, making it the quickest way to enter or exit a trade. Market Orders are commonly used when the priority is speed over price precision.

A 'Buy/Sell When Price Is' or 'Pending Order' is an order to buy or sell an instrument at a specific price in the future, rather than at the current market price. It is placed in advance and remains inactive until the market reaches the specified price. There are different types of pending orders, including:

• Buy Limit: An order to buy at a price lower than the current market price.
• Sell Limit: An order to sell at a price higher than the current market price.
• Buy Stop: An order to buy at a price higher than the current market price.
• Sell Stop: An order to sell at a price lower than the current market price.

Pending orders help traders plan their entry or exit points in advance, ensuring they act at desired price levels without having to monitor the market constantly.

Good Until Cancelled (GTC) is an option for pending orders that allows the order to remain active until it is either executed or manually cancelled. When you select this option, you don’t need to specify a time for the order to expire. The order will stay open indefinitely until it is filled or you cancel it yourself.

This option ensures that your pending order remains in place, even if the market doesn't reach your specified price immediately, giving you more flexibility.