Module 2. Dealing online

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Tobias Lucas
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1 Dealing online

2 Module 2 Dealing online In this module we look at how to place a trade online, how to create your own price lists and other basic features of our dealing platform. TradeSense US, April 2010, Edition 3

3 PureDeal: our online dealing platform Our Forex trading service is available 24 hours a day over the telephone, via our dealers, or online via our PureDeal platform. Trading over the telephone allows you to ask our experienced team of dealers any questions that may arise when placing a trade, and a good deal of our clients enjoy the friendly and efficient telephone service that we offer. * These days, greater numbers choose to deal online, however, taking advantage of the many benefits it offers. When you first log into PureDeal, the screen is split into four specific areas, as shown. All windows can be toggled on or off by using the buttons that appear at the top of the screen. Finder, Watchlists, Open Positions and Working Orders are selected as a default, but there are other options that can be selected to offer you further functionality. The Watchlists pane at the top shows a list of our more popular markets. The Finder pane on the left is used to navigate to any of our thousands of markets, which can then be displayed as streaming exchange rates in a Prices pane. From any live rate that you are looking at you can open a deal Ticket (with which you can place an order. We also offer One click Dealing which is explained later in this module). You can also choose to add your favorite markets to your own personal Watchlists up to a maximum of five Watchlists. Let s look at an example of placing a market order online. * Please note we offer an execution-only service 2 Module 2: Dealing online

4 Working Orders Module 2: Dealing online 3

Example: buying EUR/USD using PureDeal Looking at a chart of EUR/USD you decide that the recent trend of the euro strengthening against the dollar is set to continue, especially in light of weak US

5 Example: buying EUR/USD using PureDeal Looking at a chart of EUR/USD you decide that the recent trend of the euro strengthening against the dollar is set to continue, especially in light of weak US GDP data. Buying EUR/USD would allow you to profit if the euro strengthens against the dollar. You decide to go online and check what price we are making for EUR/USD. To access the EUR/USD rate, you need to navigate to it in the Finder section of PureDeal. All rates that we quote are contained within the navigation tree. As EUR/USD is one of the major currency rates, it can be found by expanding the Major FX directory (clicking on the + sign next to Major FX achieves this). Note that a Major FX directory exists in both Standard Forex and Mini Forex. Clicking on Spot FX EUR/USD reveals a dropdown menu, offering you a choice of functionality. 4 Module 2: Dealing online

6 Selecting Deal Ticket from the dropdown next to a market s name enables you to place an order (an instruction to buy or sell at the current level). As you have selected EUR/USD from the Standard Forex directory, any order that is placed with a deal Ticket opened from this section will be dealing in standard contract sizes. In order to deal in mini contract sizes you would need to select EUR/USD from the Mini Forex directory. If you want to just view the rate without launching a deal Ticket, you can select Show in Prices. This lists the EUR/USD rate by itself in a Prices pane. Perhaps more useful is to view a group of rates. If you click on the directory name of Major FX, every rate in that directory is displayed in a Prices window. Module 2: Dealing online 5

7 This allows you to monitor a handful of rates at once. The current bid and offer (underneath Sell and Buy respectively) are displayed, along with other useful pieces of information, such as the net change on the day and the day s highest and lowest prices for each currency pair. Clicking on the green button above a rate s name or anywhere on the Sell or Buy boxes launches a Ticket, from which you can place a market order. 6 Module 2: Dealing online

This deal Ticket is populated with the current rate and allows you to enter the details of the market order that you would like to place. The bid (1.33785) and offer (1.

8 This deal Ticket is populated with the current rate and allows you to enter the details of the market order that you would like to place. The bid ( ) and offer ( ) of the current rate appear in the Sell and Buy boxes, respectively and update constantly. As you can see, the big figure of the rate (1.33 in this case) is displayed in a smaller font. You can also see that the rate is quoted to five decimal places. The extra final decimal place that arises from precision quoting is displayed in a smaller font. For convenience, the width of the spread (in pips) is displayed in between the Sell and Buy buttons, so that you can see how much it is at a glance. To place a trade you first need to specify the size in which you would like to deal, in other words the number of contracts. You choose to trade one contract (worth 100,0000): you enter 1 in the Contracts box. The bottom half of the deal Ticket is an optional section offering the ability to attach further dealing instructions; this is covered in detail in Module 3. Module 2: Dealing online 7

9 Making up your mind that you are happy to deal at the price that is showing, you click on Buy. You receive an acceptance message that confirms the trade you have placed (please note that it is possible for deals to be rejected. The vast majority of deals over 90% are accepted, however). The acceptance message includes the details of your trade, along with a reference number; you should always check that all the information about your deal is correct and make a note of the reference number. You have bought 1 contract of Spot EUR/USD at You have bought 100,000 and sold $133,805 ( 100,000 x = $133,805). 8 Module 2: Dealing online

The whole time that your position is open, it is possible to check

10 As soon as your deal has been accepted, your position appears in the Open Positions window. The whole time that your position is open, it is possible to check the profit/loss of the position by looking at the valuation in the Open Positions screen. Module 2: Dealing online 9

Closing your position You hold your position for over two weeks, but the euro never really strengthens in the way that you had anticipated and eventually the dollar starts to make some gains against

To do so, you need to deal in the opposite direction to your open position. If you deal in the same size as your open position, you will close the whole trade.

This is a special type of deal Ticket that ensures you are dealing in the direction that is required to close an open position (as you can see only the Sell button is active in this case) and also

11 Closing your position You hold your position for over two weeks, but the euro never really strengthens in the way that you had anticipated and eventually the dollar starts to make some gains against the euro. 16 days after you opened the trade, you decide to cut your losses. Checking the rate online, you see that we are quoting EUR/USD at / You decide to close your position. To do so, you need to deal in the opposite direction to your open position. If you deal in the same size as your open position, you will close the whole trade. The quickest way to do so is to open a Close Position screen. This is a special type of deal Ticket that ensures you are dealing in the direction that is required to close an open position (as you can see only the Sell button is active in this case) and also pre-populates the correct transaction size in order to achieve a complete close. The Close Position screen is opened by clicking on the green button (or the market name) of a position in the Open Positions screen. To help you, your running profit/loss for the position in question is displayed (which updates with the changing price). You click on Sell. 10 Module 2: Dealing online

12 You receive another confirmation back telling you that you have sold one contract to close at Your loss, before taking into account interest adjustments, is calculated as follows: Opening transaction= 100,000 x 1 contract x = $133,805 Closing transaction = 100,000 x 1 contracts x = $133,168 Loss on trade = $133,805 - $133,168 = $637 To arrive at the overall loss on the trade, we also have to consider the adjustments made for interest. You held your position for 16 days and were long euros and short dollars. With the European Central Bank rate higher than the the Fed rate, you receive more for being long euros than you pay for being short dollars, so that each day would result in a net interest credit on your position. This might amount to $26 credit over the 16-day period. Your overall loss is therefore $637 - $26 = $611 Module 2: Dealing online 11

13 Using PureDeal: One-click Dealing So far we have looked at placing orders from a deal Ticket. PureDeal also offers One-click Dealing which allows you to deal on markets directly from prices, when in the pairs mode without needing to open a deal Ticket. To disable/enable One-click Dealing you need to go to the My Account section, which can be accessed by clicking on My Account in the top right-hand of the screen (as a default your account is set to having One-click Dealing enabled). In order to disable One-click Dealing you need to click on Preferences within the Settings section and then switch One-click Dealing to Don t allow One-click Dealing, before finally clicking on Set Preferences. 12 Module 2: Dealing online

14 When One-click Dealing is enabled each pair shows a field where you can specify the size of the deal. If you enter a deal size in this field, the Sell and Buy buttons become dealing operational as shown. Module 2: Dealing online 13

Now if you click either Sell or Buy you will directly

One-click Dealing makes it even quicker and easier to

in the number of contracts or shares in which you

15 Now if you click either Sell or Buy you will directly initiate a deal. One-click Dealing makes it even quicker and easier to place a trade than normal, especially if you pre-fill in the number of contracts or shares in which you intend to deal, but you should take care if this setting is enabled. With the intermediate step of the deal Ticket removed, you should be cautious not to accidentally place a trade. 14 Module 2: Dealing online

16 Module 2: Dealing online 15

Using PureDeal: list view We also offer an alternative way of viewing prices.

There is another mode in which you can view prices as a more straightforward list as shown (you can

One-click Dealing is only available in the Pairs view; the List view lays out information such as

17 Using PureDeal: list view We also offer an alternative way of viewing prices. In the previous examples, the prices were viewed as pairs. There is another mode in which you can view prices as a more straightforward list as shown (you can select the viewing mode using the View as dropdown menu). One-click Dealing is only available in the Pairs view; the List view lays out information such as the high, low and time of last update in a more spacious manner. Both views display the same data, just in visually different ways: feel free to go with whichever is your preference! 16 Module 2: Dealing online

18 Using PureDeal: creating a Watchlist PureDeal allows you to set up your own lists, so that you can easily view your favorite rates. Setting up a new Watchlist is easy: click on +New Watchlist in the Watchlists pane in the bottom left hand corner of the screen. This launches a window that prompts you to enter the name of your new Watchlist. Module 2: Dealing online 17

19 Let s say that you want to set up a list showing the euro against other major currencies, to make it easier to keep on eye on how the euro is broadly performing. You can set the Watchlist name as anything of your own choosing (up to 20 characters), so this time you type in Euro vs Majors and click Submit. The name of your new list immediately appears in the Watchlists window. 18 Module 2: Dealing online

20 You can rename the Watchlist at any point by clicking on the pencil icon and any new list that you create can be deleted by clicking on the trashcan icon. A Watchlist is launched by clicking on its name, so that you can view the rates in the list. To add a rate to a Watchlist you click on a specific rate in the navigation tree and select Add to Watchlist (you can also do this by clicking on a rate in a Prices pane). Module 2: Dealing online 19

21 This launches a window that allows you to specify to which Watchlist you would like to add the rate. As a default a My Watchlist always exists, but you can create up to four additional Watchlists. 20 Module 2: Dealing online

22 You select Euro vs Majors and click submit and then repeat this process for all the currencies that you are interested in adding to the Watchlist. Module 2: Dealing online 21

Launching the new Watchlist now shows rates for the euro against all the majors and you can now easily launch Tickets for both mini and standard contracts.

23 Launching the new Watchlist now shows rates for the euro against all the majors and you can now easily launch Tickets for both mini and standard contracts. The order in which rates are displayed can be rearranged to your liking by dragging and dropping (click any blank space on a row in order to drag). You can also select which Watchlist you are viewing from the dropdown at the top of the Watchlists pane. 22 Module 2: Dealing online

24 Module 2: Dealing online 23

25 Summary By now you should: Know how to search for rates online Be able to open and close a trade using PureDeal Understand One-click Dealing and know how to switch it on or off Know how to set up your own Watchlists Please remember that our Forex Trades are a leveraged product and can result in losses that exceed your initial deposit. Trading Forex with us may not be suitable for everyone, so please ensure that you fully understand the risks involved. You should of course note that, without proper risk management, a high degree of leverage can lead to large losses as well as gains. 24 Module 2: Dealing online

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CFDs: overview and dealing online

CFDs: overview and dealing online Module 1 CFDs: overview and dealing online In this module we look at the basics of what CFDs are and how they work. We look at some worked examples, as well as how to