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Million Dollar Portfolio Challenge

Million Dollar Portfolio Challenge

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Welcome to our short tutorial. It will show you how to trade currencies in this year’s CNBC Million Dollar Portfolio Challenge.  This year, 100,000 of your million dollar virtual account is available for currency trading. That means that you can take advantage of price movements in the international foreign exchange market. That’s the biggest financial market in the world, with an average of over $3 trillion traded every day.Today, we will give you a brief tour of the Currency Trading Portion of

Welcome to our short tutorial. It will show you how to trade currencies in this year’s CNBC Million Dollar Portfolio Challenge.  This year, 100,000 of your million dollar virtual account is available for currency trading. That means that you can take advantage of price movements in the international foreign exchange market. That’s the biggest financial market in the world, with an average of over $3 trillion traded every day.

Today, we will give you a brief tour of the Currency Trading Portion of the contest website. We will also show you how to place orders for currencies, how to keep track of your current trades, and how to keep an eye on your account – including your profits and losses.

To go to the currency portion of the contest, click on this tab at the top -- "Currency Trading powered by FXCM".  FXCM is a major broker for individual currency traders, and will be providing the prices for the currency portion of the contest.

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The first thing you see when you enter the currency part of the website is the Overview tab here.  It includes many important details, and we will come back to it in a minute. By the way, you can easily move between different areas of the currency page by using these tabs here.

The first thing you see when you enter the currency part of the website is the Overview tab here.  It includes many important details, and we will come back to it in a minute. By the way, you can easily move between different areas of the currency page by using these tabs here.

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First, let’s look at some current currency prices, or to use the proper term, exchange rates for these currency pairs. You can find these current prices here in the Dealing Rates tab. I should mention here that in the currency market, you always trade currencies with other currencies. You hope that the one you buy increases in price against the currency you traded against, or sold.  We’ll talk about this in a moment.Here on the left side, you can view a list of all the available currency pairs,

First, let’s look at some current currency prices, or to use the proper term, exchange rates for these currency pairs. You can find these current prices here in the Dealing Rates tab. I should mention here that in the currency market, you always trade currencies with other currencies. You hope that the one you buy increases in price against the currency you traded against, or sold.  We’ll talk about this in a moment.

Here on the left side, you can view a list of all the available currency pairs, with many of the most popular pairs near the top of the list.  You can trade any of these pairs in the contest.  This window updates these prices every 20 seconds, 24 hours per day, providing an indication of where the market is.

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Currency prices, as you can see, are quoted in pairs.  For example, here is the Euro to US Dollar pair.  The first currency in a pair is called the “base currency”, while the second currency in the pair is called the “counter” currency.  The current rate shows how much of the second, or counter currency it takes to buy one unit of the first, or base currency.  For example, the current exchange rate between the Euro and the US dollar EUR/USD is 1.5775, which means that it takes 1 dollar and 57 po

Currency prices, as you can see, are quoted in pairs.  For example, here is the Euro to US Dollar pair.  The first currency in a pair is called the “base currency”, while the second currency in the pair is called the “counter” currency.  The current rate shows how much of the second, or counter currency it takes to buy one unit of the first, or base currency.  For example, the current exchange rate between the Euro and the US dollar EUR/USD is 1.5775, which means that it takes 1 dollar and 57 point 752 cents to buy one Euro. But you can see that there are actually two rates for every currency pair, one to Buy the pair, and one to Sell the pair.

The rate to Buy a pair is almost always a little bit higher than the rate to sell the pair.  The difference in the middle is often called the Bid/Ask spread. It represents the broker’s fee. So, since the fee is already factored into the bid/ask spread, there are no commissions charged on currency trades.

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Currency prices, as you can see, are quoted in pairs.  For example, here is the Euro to US Dollar pair.  The first currency in a pair is called the “base currency”, while the second currency in the pair is called the “counter” currency.  The current rate shows how much of the second, or counter currency it takes to buy one unit of the first, or base currency.  For example, the current exchange rate between the Euro and the US dollar EUR/USD is 1.5775, which means that it takes 1 dollar and 57 po

Currency prices, as you can see, are quoted in pairs.  For example, here is the Euro to US Dollar pair.  The first currency in a pair is called the “base currency”, while the second currency in the pair is called the “counter” currency.  The current rate shows how much of the second, or counter currency it takes to buy one unit of the first, or base currency.  For example, the current exchange rate between the Euro and the US dollar EUR/USD is 1.5775, which means that it takes 1 dollar and 57 point 752 cents to buy one Euro. But you can see that there are actually two rates for every currency pair, one to Buy the pair, and one to Sell the pair.

The rate to Buy a pair is almost always a little bit higher than the rate to sell the pair.  The difference in the middle is often called the Bid/Ask spread. It represents the broker’s fee. So, since the fee is already factored into the bid/ask spread, there are no commissions charged on currency trades.

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Buying is really easy to do, simply click on the current Buy rate.  If the EUR/USD rate rises, you will have a profit.  If it falls, you will see a loss.

Buying is really easy to do, simply click on the current Buy rate.  If the EUR/USD rate rises, you will have a profit.  If it falls, you will see a loss.

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But what if you expect the first, or base currency to fall against the counter currency? Easy. You can sell the pair. This is not the stock market, which has special rules about shorting. This is the currency market, and you can bet either way at any time.  Say, for example, you expect the British Pound to fall against the US Dollar. You can make a trade by simply selling the GBP/USD pair.  In this case, if the GBP/USD rate falls, you will have a profit. Of course, if the rate rises, you will se

But what if you expect the first, or base currency to fall against the counter currency? Easy. You can sell the pair. This is not the stock market, which has special rules about shorting. This is the currency market, and you can bet either way at any time.  Say, for example, you expect the British Pound to fall against the US Dollar. You can make a trade by simply selling the GBP/USD pair.  In this case, if the GBP/USD rate falls, you will have a profit. Of course, if the rate rises, you will see a loss.

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When you place your order, you go through this order screen to confirm it.  In this screen you can do a lot. You can switch to another currency pair, choose whether you are buying or selling and you can choose the size of your trade .  Trade size is shown in this Amt (K) line, and it is shown in thousands.  So, this value of "100" means that you are selling 100,000 British Pounds.  In fact, the smallest increment you can trade is one "lot", which is equal to 100,000 units of the base currency. 

When you place your order, you go through this order screen to confirm it.  In this screen you can do a lot. You can switch to another currency pair, choose whether you are buying or selling and you can choose the size of your trade .  Trade size is shown in this Amt (K) line, and it is shown in thousands.  So, this value of "100" means that you are selling 100,000 British Pounds.  In fact, the smallest increment you can trade is one "lot", which is equal to 100,000 units of the base currency. 

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So, you can trade in any increment of 100,000.  Let's say you choose to sell 200,000 pounds, which is 2 lots.  Simply change this "100" to "200".  Click OK, and your order is entered and executed.

So, you can trade in any increment of 100,000.  Let's say you choose to sell 200,000 pounds, which is 2 lots.  Simply change this "100" to "200".  Click OK, and your order is entered and executed.

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But wait! This is $200,000 and that's more than you have in your account. Not to worry. You are able to trade this much --and more -- in this contest because you will be trading currencies with leverage.  For this contest, the leverage is ten to one. That is, every dollar you put in stands behind ten dollars of trading power. So you are controlling $200,000 of trading power with your $20,000.  Using leverage can increase both gains and losses from even small currency moves.Once your order has go

But wait! This is $200,000 and that's more than you have in your account. Not to worry. You are able to trade this much --and more -- in this contest because you will be trading currencies with leverage.  For this contest, the leverage is ten to one. That is, every dollar you put in stands behind ten dollars of trading power. So you are controlling $200,000 of trading power with your $20,000.  Using leverage can increase both gains and losses from even small currency moves.

Once your order has gone in, you can view your trades by using this Open Positions tab.  This tab is the best place to view your current trades.  Each position is listed with an individual ticket number, making them easy to track.  You will see here the currency pair being traded, the position size (that is, your trade size), and whether it's a buy or sell.  "Open" shows you the price you entered the position at, Close is the current market price – the price at which you can close your position at right now, if you so desire. 

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The next columns in the Open Positions tab are the Profit/Loss and Gross Profit/Loss columns.  P/L is your floating profit or loss, counted in pips. (They will be discussed next.)  Gross Profit/Loss shows your floating profit or loss in dollars.

The next columns in the Open Positions tab are the Profit/Loss and Gross Profit/Loss columns.  P/L is your floating profit or loss, counted in pips. (They will be discussed next.)  Gross Profit/Loss shows your floating profit or loss in dollars.

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Looking at the P/L column, it's important to know what a "pip" is.  A pip is typically equivalent to 1/100th of a cent. In the EUR/USD, for example, pips are counted in the fourth place to the right of the decimal.

Looking at the P/L column, it's important to know what a "pip" is.  A pip is typically equivalent to 1/100th of a cent. In the EUR/USD, for example, pips are counted in the fourth place to the right of the decimal.

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But wait! This is $200,000 and that's more than you have in your account. Not to worry. You are able to trade this much --and more -- in this contest because you will be trading currencies with leverage.  For this contest, the leverage is ten to one. That is, every dollar you put in stands behind ten dollars of trading power. So you are controlling $200,000 of trading power with your $20,000.  Using leverage can increase both gains and losses from even small currency moves.Once your order has go

But wait! This is $200,000 and that's more than you have in your account. Not to worry. You are able to trade this much --and more -- in this contest because you will be trading currencies with leverage.  For this contest, the leverage is ten to one. That is, every dollar you put in stands behind ten dollars of trading power. So you are controlling $200,000 of trading power with your $20,000.  Using leverage can increase both gains and losses from even small currency moves.

Once your order has gone in, you can view your trades by using this Open Positions tab.  This tab is the best place to view your current trades.  Each position is listed with an individual ticket number, making them easy to track.  You will see here the currency pair being traded, the position size (that is, your trade size), and whether it's a buy or sell.  "Open" shows you the price you entered the position at, Close is the current market price – the price at which you can close your position at right now, if you so desire. 

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You have opened 2 positions so far. But how do you close a position? Well, if you want to close out a current trade at the current market price, it's very easy.  Simply click on the Close price for the trade.  Confirm that you wish to close, and the position will be closed out, and the profit or loss booked.

You have opened 2 positions so far. But how do you close a position? Well, if you want to close out a current trade at the current market price, it's very easy.  Simply click on the Close price for the trade.  Confirm that you wish to close, and the position will be closed out, and the profit or loss booked.

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Now that we've shown you how to open and close positions at the current market price, we'll show you how you can enter a position at a future price.  Say, for example, you want to buy the EUR/USD.  Currently, it is at 1.5750.  You want to buy it, but you think it will fall a bit before rising again, so you could buy now... or, you can set an Entry order at a better price.  You place an entry order at 1.5700.  This is a better price to buy at, because it is lower.  To make this order, you click o

Now that we've shown you how to open and close positions at the current market price, we'll show you how you can enter a position at a future price.  Say, for example, you want to buy the EUR/USD.  Currently, it is at 1.5750.  You want to buy it, but you think it will fall a bit before rising again, so you could buy now... or, you can set an Entry order at a better price.  You place an entry order at 1.5700.  This is a better price to buy at, because it is lower.  To make this order, you click on Entry choose EUR/USD, and type in 1.57000, and click OK.

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If the EUR/USD falls to 1.5700, this order will automatically execute, and you will have bought the EUR/USD.  If 1.57000 is never reached, the order will continue to wait here until you cancel it.

If the EUR/USD falls to 1.5700, this order will automatically execute, and you will have bought the EUR/USD.  If 1.57000 is never reached, the order will continue to wait here until you cancel it.

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Now let's go back to the Overview tab and see how everything works together.  The Portfolio area shows you pertinent facts about your overall currency holdings.  The Cash Balance shows the current dollar balance of your currency portfolio, including the profits or losses from current open positions.  Day P/L shows your profit or loss that has accrued since 4pm Eastern Time, which is the beginning of the trading day.

Now let's go back to the Overview tab and see how everything works together.  The Portfolio area shows you pertinent facts about your overall currency holdings.  The Cash Balance shows the current dollar balance of your currency portfolio, including the profits or losses from current open positions.  Day P/L shows your profit or loss that has accrued since 4pm Eastern Time, which is the beginning of the trading day.

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Usd Mr stands for Used Margin.  This is the amount of money you need to set aside as a deposit to secure or back up your positions.  The margin requirement is $10,000 per lot traded.  Right now, you are holding 2 lots of GBP/USD, so the system has automatically set aside $20,000 in Used Margin. This is the $20,000 that is securing your 200,000 pound trade, so it is a deposit that is set aside for security, and will become available again if the position is closed.Usable Margin is the amount of m

Usd Mr stands for Used Margin.  This is the amount of money you need to set aside as a deposit to secure or back up your positions.  The margin requirement is $10,000 per lot traded.  Right now, you are holding 2 lots of GBP/USD, so the system has automatically set aside $20,000 in Used Margin. This is the $20,000 that is securing your 200,000 pound trade, so it is a deposit that is set aside for security, and will become available again if the position is closed.

Usable Margin is the amount of money left in your account that you can use to open new trades or to absorb any losses.  Usable Margin is displayed as both a dollar amount and a percentage.  You will see this figure rise and fall along with your Cash Balance.  You will also see that the dollar amount of your Usable Margin plus your Used Margin is equal to your Cash Balance.  The Percentage tells you what percentage of your Cash Balance is Usable Margin, available for trading.  It is important to watch your Usable Margin, because if it falls to zero, you will not have enough money in your account to maintain your open trades.  If this happens, a Margin Call will be made, and ALL open trades shall be closed immediately at the best available price.  The Margin Call mechanism closes ALL your trades, taking you out of the market before your losses become so large that they deplete your account.  Because of this, you are insured against a negative Cash Balance in your currency portfolio.

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Gross P/L shows you your floating profit or loss in dollars for all currently open positions or trades.

Gross P/L shows you your floating profit or loss in dollars for all currently open positions or trades.

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MC stands for margin call, and tells you if you have a margin call or not.  The letter "N" means there is no margin call right now.

MC stands for margin call, and tells you if you have a margin call or not.  The letter "N" means there is no margin call right now.

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The Summary window groups together all your open positions by currency pair, so you can track your overall exposure in each currency.

The Summary window groups together all your open positions by currency pair, so you can track your overall exposure in each currency.

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Finally, the Report feature is a great way to track the progress and history in your currency portfolio.  Click on the report button at any time, and you can generate a detailed account statement for your currency trades, showing you exactly what you have been doing.The currency markets are typically active and liquid 24 hours per day.  The beginning and end of the currency trading day for this contest is 4pm Eastern Time, to coincide with the close of New York Stock Exchange trading.  Any curre

Finally, the Report feature is a great way to track the progress and history in your currency portfolio.  Click on the report button at any time, and you can generate a detailed account statement for your currency trades, showing you exactly what you have been doing.
The currency markets are typically active and liquid 24 hours per day.  The beginning and end of the currency trading day for this contest is 4pm Eastern Time, to coincide with the close of New York Stock Exchange trading.  Any currency position open at 4pm Eastern Time is considered to be held overnight.  There is an interest charge or credit associated with holding your position overnight. 

Why?  Because different currencies have different interest rates.  You earn or pay the difference in interest rates, depending on which currencies you've bought.

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In the Open Positions tab, there are columns marked Roll S (if you have sold the currency pair) and Roll B (if you have bought the currency pair).  These columns show you how much interest you will pay or earn for holding 1 lot of the currency pair in either a Sell or Buy position, at 4pm Eastern.  If the number here is negative, you will be charged this amount in dollars.  If the number is positive, you will receive this amount in dollars in your Cash Balance.

In the Open Positions tab, there are columns marked Roll S (if you have sold the currency pair) and Roll B (if you have bought the currency pair).  These columns show you how much interest you will pay or earn for holding 1 lot of the currency pair in either a Sell or Buy position, at 4pm Eastern.  If the number here is negative, you will be charged this amount in dollars.  If the number is positive, you will receive this amount in dollars in your Cash Balance.

Since it is just as easy to short a currency as it is to buy it, currencies provide great opportunities in both bull and bear markets.  CNBC and FXCM are very excited to offer currencies as an integral part of the Million Dollar Portfolio Challenge.  We hope you find it useful, and wish you good luck with your trading.

Welcome to our short tutorial. It will show you how to trade currencies in this year’s CNBC Million Dollar Portfolio Challenge.  This year, 100,000 of your million dollar virtual account is available for currency trading. That means that you can take advantage of price movements in the international foreign exchange market. That’s the biggest financial market in the world, with an average of over $3 trillion traded every day.Today, we will give you a brief tour of the Currency Trading Portion of

Welcome to our short tutorial. It will show you how to trade currencies in this year’s CNBC Million Dollar Portfolio Challenge.  This year, 100,000 of your million dollar virtual account is available for currency trading. That means that you can take advantage of price movements in the international foreign exchange market. That’s the biggest financial market in the world, with an average of over $3 trillion traded every day.

Today, we will give you a brief tour of the Currency Trading Portion of the contest website. We will also show you how to place orders for currencies, how to keep track of your current trades, and how to keep an eye on your account – including your profits and losses.

To go to the currency portion of the contest, click on this tab at the top -- "Currency Trading powered by FXCM".  FXCM is a major broker for individual currency traders, and will be providing the prices for the currency portion of the contest.