Forex Trading - FAQs

What are the advantages of foreign currency trading?

Trade foreign currency in the biggest and most liquid market in the world.  You can react to the latest market developments and increase your performance 24 hours a day, five days a week.  Furthermore, you can speculate on falling, as well as on increasing rates, and a leverage of up to 100 offers you undreamt of opportunities.

How much does foreign currency trading cost with the FXdirekt Bank?

The FXdirekt Bank - in comparison to most other competitors - charges neither commission nor fees.  The account opening and account managing, telephonic orders, all order types, as well as deletion and changing of orders are free of charge.  Phone calls to the FXdirekt Bank are also absolutely free of charge.  The FXdirekt Bank merely earns the spread, i.e., the difference between the bid and the ask price of a currency pair.  For example:  to trade 100,000 EUR/USD the spread is merely 25 USD - which is an approximate difference of 0,02%, of the amount traded.  Please see also our Schedule of Prices and Services.

Do I require a lot of time to trade foreign currency?

No!  FXresearch provides you with comprehensive information. Our FEXtrader offers many technical possibilities with which your orders can be executed without you being present.  Thereby you are in a position to, with a few mouse clicks, manage your own risk by entering respective stop- and limit orders.  If you do not have time to enter your orders, you can phone us on our toll free number and place your orders by phone.

How much money do I need to get started?

The FXdirekt Bank enables you to open an account as from 4,000 EUR.  We strongly discourage you from choosing a broker with whom you can open accounts as from a few hundred USD.  Moreover, the FXdirekt Bank offers you the opportunity to choose your own margin (1%, 2% or 3%) and consequently match your trading exactly to your risk profile.

What is the margin and how does the leverage function?

The FXdirekt Bank enables you to utilise a leverage of up to 100 (1% margin).  Initially, you can chose your margin (1% or leverage 1:100) and consequently match your trading exactly to your risk profile. The margin is the amount of security that you must deposit for a transaction. For example: to trade 400,000 EUR/USD you merely need a margin of 4,000 EUR.

How do I get started?

The demo account allows you to learn the application of the FEXtrader.  You should take a few days in order to become acquainted with all the functions.  Our competent team will support you at all times.  Furthermore, as a live trader, you have the opportunity of calling us 24 hours a day and consulting our customer support.  There is a big difference between demo account trading and live account trading:  the emotions.  Emotions, unfortunately, cannot be simulated.  The demo account is, otherwise, almost identical to the live account.  With foreign currency trade, the following applies - as in many other areas in life:  One can only learn to ride a bicycle by getting on; our experienced team will show you how to apply the "stabilising wheels" (stop-loss strategy).

Do you inform me if the rates go up or down?

When trading foreign currency, it is essential to make your own trading decisions. The FXdirekt Bank will support you in the best possible manner. On the one hand, we offer you  comprehensive information with our FXresearch, where, inter alia, you receive Intraday trading analyses, substantial daily and weekly commentaries, as well as a news feed, which provides you with realtime foreign currency news. On the other hand, you, as a live customer of the FXdirekt Bank, have the opportunity to phone us 24 hours a day in order to consult our customer support.  The best is:  this service package is completely free of charge for you at the FXdirekt Bank.

Why does the spread sometimes widen?

Because the FXdirekt Bank cooperates with some of the biggest banks in the world, you have the guarantee that the prices displayed in the FEXtrader are tradeable.  Under certain circumstances, e.g. an extremely volatile market, this can lead to a widening of the spread.  Contrary to other brokers who always provide you with the same spread which you can often not trade, the FXdirekt Bank has decided to always show you a price which you can use ad-hoc.  An advantage of the widening of the spread is, that with the FXdirekt Bank you are, in nearly all situations, in a position to place your orders.

What is the rollover?

Per definition, a rollover is the extension of a foreign currency transaction which is becoming due through the conclusion of a swap transaction (e.g. Tom-next-swap).  As a rule, you trade foreign currency with a valuta of two days, i.e., the transaction becomes due in two days.  But, as you are not interested in having the foreign currency physically delivered, the FXdirekt Bank takes over this service for you and, on a daily basis, rolls your still open positions one day further.  With this procedure, the interest is also taken into account.  For example:  You have sold EUR/USD.  This means, that you owe EUR and own USD.  Currently, the credit balance interest for USD is higher than the debit balance interest for EUR - with the rollover you thus receive a more favourable rate when opening the position (ROP) than you will when closing the position (RCL) - in this case, you profit from the rollover.

Is my money safe with the FXdirekt Bank?

Contrary to other brokers the FXdirekt Bank belongs to the "Entschädigungseinrichtung der Wertpapierhandelsunternehmen" (EdW). The EdW is an organisation created because of the "Einlagensicherungs- und Anlegerentschädigungsgesetz" (law regarding deposit guarantee and investor compensation) of 16 July 1998, to secure investor claims.  Furthermore, the FXdirekt Bank is registered as a credit institute with the BaFin (Federal Institute for Financial Services Supervision) under the number 119136 - in the same way as other major German banks are registered with the BaFin.  No other foreign currency trade organisation in the German-speaking area offers you this combination of regulation and security. Please see also our General Terms and Conditions  .