Forex Trading with iTrustCapital

Forex, short for foreign exchange, is the global decentralized market where currencies are traded. It is the largest and most liquid financial market in the world — characterised by continuous pricing, diverse participants (banks, corporations, funds, retail traders), and 24-hour access across major global trading sessions. Forex traders attempt to profit from fluctuations in exchange rates between currency pairs by buying one currency and selling another.

Because currency values are driven by macroeconomic data, interest rate differentials, geopolitical events and market sentiment, forex trading combines macro analysis, technical study and prudent risk management. iTrustCapital provides institutional-grade data, fast execution and a range of instruments so traders can access major, minor and exotic pairs.

The Forex market is effectively open 24 hours a day during weekdays because of the overlapping global sessions. Typical market hours (EST) run from Sunday 5:00 PM EST (market open in Asia/Australasia) until Friday 4:00 PM EST when the North American session closes. This rolling schedule enables traders across time zones to trade at convenient times.

Common sessions (approx):

• Asia (Tokyo/SYD): early Asian hours — liquidity may be lower on many pairs but currency crosses like AUD/JPY are active.
• Europe (London): overlaps with Asia and U.S. — typically the most liquid hours for EUR, GBP, CHF and many cross-pairs.
• North America (New York): high-volume trading on USD pairs, plus the peak volatility window when both London and New York overlap.

Because sessions overlap, spreads and liquidity change during the day — traders should choose times that align with their strategies and liquidity needs.

Forex instruments are quoted as currency pairs: Base / Quote. The first currency is the base (amount you buy/sell per unit of quote). Pairs are typically classified:

• Majors: the most liquid pairs (e.g., EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD). These pairs have the tightest spreads.
• Minors (Crosses): pairs that exclude the USD (e.g., EUR/GBP, AUD/JPY) and often have slightly wider spreads.
• Exotics: pairs involving emerging-market currencies or less liquid currencies paired with a major (e.g., USD/TRY, EUR/TRY). Exotics can have wide spreads and jumpy liquidity.

Choosing the right pair depends on volatility tolerance, trading hours, transaction costs and your ability to react to news that affects those currencies.

Forex trade size is commonly measured in lots:

• Standard lot: 100,000 units of the base currency.
• Mini lot: 10,000 units.
• Micro lot: 1,000 units.
• Nano lot: 100 units (offered by some brokers).

A pip is the typical smallest price increment for most pairs: for pairs quoted to four decimal places (e.g., EUR/USD), one pip = 0.0001. For pairs quoted to two decimal places (e.g., USD/JPY), one pip = 0.01. Some brokers quote fractional pips (pipettes), which are one-tenth of a pip.

Pip value example: for EUR/USD:
• Standard lot (100,000): 1 pip ≈ $10.
• Mini lot (10,000): 1 pip ≈ $1.
• Micro lot (1,000): 1 pip ≈ $0.10.

Understanding pip values is essential for position sizing and risk management.

Margin is the amount of your funds that must be set aside by the broker to keep a position open. It is not a fee but collateral to cover potential losses. Margin depends on trade size (lots), the instrument price and the leverage applied.

Margin example (practical):

Suppose you want to buy 0.1 standard lot (10,000 units) of EUR/USD at a price of 1.2000 and your account currency is USD. The trade notional is:

If your available equity falls below required maintenance margin, the platform may issue a margin call or automatically close positions to reduce risk.

Leverage allows you to control a larger position with a smaller amount of capital. For example, 1:100 leverage means you can control $100,000 with $1,000 of margin. Leverage magnifies both gains and losses — a 1% move on a leveraged position can mean a much larger change relative to your initial margin.

Regulatory regimes impose maximum leverage limits in many jurisdictions; iTrustCapital sets margin and leverage per instrument and may change those levels during periods of market stress.

Important: Use leverage responsibly. Keep adequate free margin to avoid forced liquidations during volatile moves.

Typical order types available on iTrustCapital include:

• Market Order: immediate execution at best available price.
• Limit Order: execute at your limit price or better.
• Stop Order: becomes a market order once the trigger price is hit.
• Stop-Limit: becomes a limit order when the stop price is reached.
• Trailing Stop: a dynamically adjusted stop that follows market movement.
• OCO (One-Cancels-Other): two linked orders where the execution of one cancels the other.

Execution quality depends on liquidity, market conditions, and routing. During major news events, slippage and partial fills are possible.

Pricing for forex trades typically consists of:

• Spread: difference between bid and ask; may be fixed or variable.
• Commission: for some account types or instruments a per-trade commission applies.
• Swap/Financing: overnight financing charged or credited when positions are held past the rollover time.
• Other fees: deposit/withdrawal fees, conversion fees, or inactivity charges depending on method.

iTrustCapital publishes a pricing schedule per instrument. During low liquidity or major events, spreads can widen substantially.

Liquidity varies by pair and by time of day. Major pairs typically have the deepest liquidity and tightest spreads. Exotic pairs may have thin liquidity and wider spreads. Volatility can spike during economic data releases, central bank decisions, geopolitical shocks, or unexpected events.

Risk management during volatile events is critical — consider reducing position sizes, widening stop distances (on liquid instruments), or temporarily pausing trading around major releases.

Forex carries inherent risk. Adopt a disciplined risk management framework:

• Position sizing: risk a small percentage of equity per trade (e.g., 1–2%).
• Stops: use stop-loss orders to control downside and calculate max loss before entering.
• Diversification: avoid over-concentration in correlated pairs.
• Leverage control: reduce leverage as you scale or trade volatile instruments.
• Backtesting trading: validate strategies in a risk-free environment.
• Keep records: maintain a trade journal with rationale, outcome and learnings.

iTrustCapital offers built-in risk tools (stop placement, trailing protection, and alerts) to help manage exposures.

Forex traders commonly use two broad approaches:

• Technical analysis: uses price charts, indicators, support/resistance, and pattern recognition to time entries and exits.
• Fundamental analysis: assesses macroeconomic indicators (interest rates, CPI, employment, GDP), central bank policy and geopolitical events that shape currency valuations.

Many traders combine both approaches — using fundamentals to choose which currencies to favour over the medium term and technicals to time entries and manage risk.

Execution speed, data quality, and API reliability matter for active traders. iTrustCapital supports web and mobile platforms, and depending on account type, may provide APIs for automated trading. We recommend:

• Implementing rate limits and robust error handling in automated scripts.
• Monitoring connectivity, and having fallback procedures for outages.

For latency-sensitive strategies, consider proximity hosting and direct market access options where available.

Quick practical steps to begin forex trading with iTrustCapital:

1. Create and verify your iTrustCapital account (KYC/AML checks).
2. Deposit funds using a supported method and currency.
3. Choose currency pairs that match your strategy and schedule.
4. Start with conservative position sizes and apply stop-losses.
5. Review trade performance and iterate on your edge and risk parameters.

Use our educational resources and market calendar to plan around economic events and to avoid unnecessary risk.

Q: When is the best time to trade Forex?
A: The best time depends on the pair you trade. Major pair liquidity peaks during London and New York overlap. Choose times matching your strategy and attention window.

Q: What is a pip?
A: A pip is the standard unit of movement for most currency pairs (0.0001 for most pairs). Some brokers quote fractional pips (pipettes), allowing finer granularity.

Q: How much capital do I need?
A: Minimum capital depends on margin requirements, lot size preferences, and your risk tolerance. For micro-lot trading, accounts can start with modest deposits (e.g., $100–$500), but robust risk management is essential.