Investment Terminology
Definitions
A glossary of important investing and copy-trading termsâuse this page as a quick reference.
Aurum Markets Investment Terminology
Definitions to help you understand common concepts used in trading and copy trading.
Copy Type - Autoscale Equity
Copy proportionally to Equities of the Providerâs and the Subscriberâs accounts.
HEDGE
A forex hedge is a transaction implemented to protect an existing or anticipated position from an unwanted move in exchange rates. Forex hedges are used by a broad range of market participants, including investors, traders and businesses. By using a forex hedge properly, an individual who is long a foreign currency pair or expecting to be in the future via a transaction can be protected from downside risk. Alternatively, a trader or investor who is short a foreign currency pair can protect against upside risk using a forex hedge.
LEVERAGE
Leverage is a virtual credit provided by the broker to a client. Leverage affects your margin requirements, i.e. the higher the ratio is, the lower required margin will be. With leverage 1:500 your initial margin will be 500 times less than the contract size. For example, the current EUR/USD bid is 1.13501 and you would like to open 0.5 lots Sell order. If your leverage is 1:500 the margin required for such order can be calculated like this: 50,000 EUR (contract size) * 1.13501 (current Bid) / 500 (your leverage) = 113.50 USD. With 1:200 leverage, the required margin is 283.75 USD.
Max Loss
This value is entered in the Subscriberâs account currency. This is a maximum total loss on the Subscription (closed trades PnLs only are considered). When itâs reached, the Subscription will be closed automatically.
Minimum Join Balance
Minimum balance to start copying (optional).
Min/Max lot
Source trade volume limits for copying trades.
Multiplicator
The copied trade will be multiplied by this number. The Multiplicator shall be any positive number (not equal to 0) multiplied by the volume of the Providerâs trade. If the Multiplicator field is left empty, it will mean âequal to 1â.
Nickname
A nickname for the Providerâs account (optional). If set, the Subscribers will see it as the account name in the Subscriberâs web-cabinet and the Statistics.
More definitions
Keep learningâthese terms are widely used in platform interfaces and account settings.
Performance Fee
A part of profit gained by the Provider for profitable trades after they are closed.
PIPS
Is a standardized unit of change in the price of a trading instrument. Initially, when only 4-digit pricing was available, it was the smallest unit of price change. With the introduction of more accurate 5-digit pricing, 1 pip is still calculated by the 4th digit (0.0001). The smallest unit is now referred as to point (0.00001). In 5-digit pricing 1 pip is equal to 10 points. Example: When the price for EUR/USD currency pair changes from 1.11634 to 1.11645, it means the price has changed in 1.1 pips or 11 points. For USD/JPY currency pair, which has 3-digit pricing, a change from 123.857 to 123.864 means that the price has grown in 0.7 pips or 7 points.
Provider
The owner of a Strategy Account. A trader willing to share his/her strategy with other Investors for a percentage Profit Share of the profits.
Public
If account is checked âpublicâ, anyone will be able to subscribe to it.
Subscribe
Click âSubscribeâ to create a new Subscription.
Subscriber
An investor who wants to follow trades of other strategy managers or successful traders.
SWAP Charges
The swap charges in forex or rollover interest rates is the net interest return that a trader accumulates on a currency position held overnight. This fee is charged when the trader borrows one currency to buy another, as part of forex trading. For instance, if you are buying EUR/USD, you might borrow in US Dollars and buy Euros with the amount. In doing so, you will need to pay interest on the borrowed US Dollars and earn interest on the Euros you bought. The net interest fee is calculated based on the difference in interest rates of the two traded currencies.
TRADING MARGIN
Margin trading in the forex market is the process of making a good faith deposit with a broker in order to open and maintain positions in one or more currencies. Margin is not a cost or a fee, but it is a portion of the customer's account balance that is set aside in order trade. The amount of margin required can vary depending on the brokerage firm and there are a number of consequences associated with the practice.
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