Trading conditions & execution

margin requirements


Basic TermsDefinitionFormula
Balance (B)The funds in your account including all deposits, positive swaps and profits from closed trades and less all withdrawals, negative swaps, losses from closed trades and any other commissions/chargesB = net deposits +/- swap +/- P/L

If your account is subject to
commissions or any other charges,
they will be also reflected in the total
balance amount.
Equity (E)Your account balance plus profits or minus loss from currently open trades (unrealized P/L). This is the actual value of your account at any given time and fluctuates with market movement.E = B +/- uP/L
Margin (M)The amount of funds (in your account’s base currency) required to open a trade.

M = Position size / L

View examples here
Margin Level (ML)The percentage ratio between your account’s Equity and Margin

ML = E / M * 100%
Free Margin (FM)The funds available for opening new trades.

FM = B - E - M
Leverage (L)The ratio between your own funds and the actual traded position size.
e.g 1:100 leverage means that you can trade a lot size of 100 000 units for only 1% of the cost (1,000 units)

Correlation between the above: when Equity = Margin => ML = 100% and Free Margin = 0


MARGIN REQUIREMENT CALCULATION

Margin equals the amount of funds required to open a trade. In account currency terms, this is calculated as Position Value divided by Leverage.


MARGIN CALL & STOPOUT

While managed accounts clients have the unique opportunity to set up their own Equity Protection level, all accounts are still subject to the general Margin Requirement conditions.
The Margin serves as collateral, ensuring that you can cover potential losses on your open trades with the funds available in your account.

  • squareIn order to protect you from negative account balance, once the Margin Level reaches or falls below 100%, the system will automatically begin to close your open positions, starting from the most unprofitable.
  • squareTo further limit the exposure on your account and in an effort to protect you from a possible Stopout, the system does not allow new trades to be opened and for existing trades to be hedged in the event your Margin Level falls below 100%.
  • squarePending orders will not be cancelled, however they will not be executed either if the Margin Level<100%, even if the price is available on the market.
  • squarePending orders will be executed only if your Free Margin is positive (Margin Level>100%).

 

pencil

Please note: Despite our best efforts to protect you from incurring liability above your account’s equity, please remember that it is client’s responsibility to keep their account(s) appropriately capitalised. While our automated Stopout system and EPM functionality for managed accounts clients aim to protect you from a negative account balance, we cannot guarantee that your balance will not go into the negative, especially during volatile, fast moving markets. For further details, please refer to the Client Agreement (p.11) and Risk Disclosure (p.9).

 

launchapp small To see an example of how the Margin Level correlates with EPM, click here.

TIPS TO AVOID STOPOUT

Some methods to avoid liquidation include:

  • squareSetting up your own EPM (managed accounts clients only)
  • squareMonitoring your account
  • squareSetting up SL on each individual trade
  • squareUsing lower leverage
  • squareTrading with caution during important market news
  • squareHedging or closing positions in order to lower exposure and increase the amount of free margin in your account
  • squareDepositing more funds or transferring funds from another account. Remember to take into account the time required for funds to be allocated.

orders & execution

Market Execution

STP Market execution guarantee:

check-greenorder is filled at a fair and transparent market price

check-greenno dealer intervention

check-greenno re-quotes, only current market price

check-greenfast execution, no orders delays

Please note however that the price at which your order is filled may be different from the one you specified, as the entry price depends entirely on the current market price. For this reason, SL and TP can only be set once the trade has been filled.

launchapp small Read more: Trading FAQ’s.

Pricing and Spreads

As a STP broker, Tier1FX offers you direct market access, ensuring the most competitive and transparent pricing and spreads.

launchapp small See our live quotes and average spreads here.

Limit and Stop Orders

Pending orders
Buy Limit, Sell Limit, Buy Stop and Sell Stop
Stop Loss
Take Profit
placed as close as 0.1 pips away
from market Price

As this applies to certain trading strategies, please note that, as convenient, such proximity to market price may lead to your Stop/Limit order to be triggered instantly.


Lot Size

  • squareOne standard lot (1.00 volume on MT4 platform) = 100,000 units of the base currency.
  • squareThe minimum lot size you can trade on all platforms is 0.01 – the equivalent of 1,000 units of the base currency.
  • squareThe maximum lot size per trade for most pairs is 50 lots – the equivalent of 5,000,000 units of the base currency. The max lot size for Crude Oil (XTI/USD), Brent (XBR/USD) and Natural Gas (XNG/USD) is 20 lots.
  • squareThere are no limitations of the number of open trades, regardless the lot size traded.

Expert Advisors (EAs)

  • squareWith Tier1fx you can backtest, optimise and apply EAs of your choice with no restrictions.
  • launchapp small See our Client Agreement.
  • squareAvailable on MT4 and JForex (Java language required)

Contact our Support Team to use MT4 EA on JForex.
Choosing and using a robot/EA is entirely at trader’s own discretion.


Scalping

check-greenallowed and welcome

check-greenno limitations on the number of trades placed

check-greenno limitations on the number of pips in profit/loss.

Pending orders, SL and TP can be placed as close to market as 0.1 pips.

pencil Note: Tier1FX does not allow arbitrage.


Hedging

You can hedge your position at any time in order to protect a losing position or balance your equity, as long as your Free Margin is positive (Margin Level>100%).

When all positions are fully hedged, the Margin Requirement will be zero.

Please note however that even if your positions are fully hedged, you are still responsible for the spread cost and stopout can still be triggered.


News Trading*

Our fast and reliable execution, direct access to market liquidity and outstanding technology provide an excellent trading environment for the new trader – with no requotes and slippage at minimal levels.

*While Tier1FX imposes no limitations on news trading, remember that due to high market volatility during (and shortly before and after) major economic releases, news trading carries a high level of risk. Please note that while we endeavour to provide fast and flawless execution, high market volatility may cause slippage (orders may get filled at a price, other than the one specified) and in some cases lead to negative account balance.

leverage


Leverage represents the ratio between the funds required to open a trade and the actual size/cost of that trade. For example, 1:100 leverage means that you can trade a lot size of 100,000 units for only 1% of the cost (1,000 units of the base currency).

Leverage on T1 trading accounts is determined by account equity, as follows:

Equity Max Leverage

equity_maxLeverage

Statement: USD/CNH Leverage 1:10
Due to the current high volatility and low liquidity on USD/CNH, there is an increasing risk of significant price gaps, which may cause negative equity on client accounts. Because of that Tier1FX has taken the decision to reduce the leverage on USD/CNH to 1:10 as of market open on 14th Jan 2016

rollover


Rollover is the interest paid or earned for holding a position overnight. Remember, as Forex currencies are traded in pairs, you are simultaneously buying one currency and selling the other: for example, when you trade EUR/USD, you are buying EUR and selling USD.

If the interest rate of the currency you are buying (in this case EUR) is higher than the interest rate of the currency you are selling (in this case USD), you would earn interest and positive Rollover will be applied to your account. If the opposite is true and the interest rate of the currency you bought is lower than the interest rate of the currency you sold, you would pay interest (negative Rollover will be charged to your account).

Rollover rates are updated and applied daily at 21:00 GMT.

Please note that Rollover applied on Wednesday at 21:00 GMT are multiplied by three (3), in order to compensate for the weekend. This is because Forex spot transactions settle two (2) business days from the date of the actual trade.

launchapp small Click here. for our Rollover rates by instrument.

trading hours


INSTRUMENTTRADING HOURS (SERVER TIME)*
FX PAIRS
All FX MT4Sun-Fri: 00:05 -24:00 (23:55 on Friday)
All FX Jforex**Sun-Fri: 00:00 - 24:00
METALS
XAU/USDSun-Fri: 01:00 - 24:00 (23:55 on Friday)
XAG/USDSun-Fri: 01:00 - 24:00 (23:55 on Friday)
XAU/EURSun-Fri: 01:00 - 24:00 (23:55 on Friday)
XAG/EURSun-Fri: 01:00 - 24:00 (23:55 on Friday)
XAU/JPYSun-Fri: 01:00 - 24:00 (23:55 on Friday)
XPT/USDSun-Fri: 00:05 - 24:00 (23:55 on Friday)
XPD/USDSun-Fri: 01:00 - 23:00
XBR/USDSun-Fri: 03:00 - 23:00
XTI/USDSun-Fri: 01:00 - 23:00
XNG/USDSun-Fri: 01:00 - 23:00
CFDs
Please click here for full CFDs specifications.

*Server time can be viewed as GMT+2 from autumn to spring and GMT+3 from spring to autumn (subject to Daylight Saving Time).
Midnight Server Time correponds to 5pm EST.
**Most FX pairs offered by Tier1FX are tradable without interruption, however please note that some have Trading Breaks and might be interrupted due to liquidity limitations during Off Market Hours.
Such pairs include but are not limited to USD/PLN, EUR/PLN, USD/TRY, EUR/TRY, which have a trading break within 15:00h-04:00h server timeNOTE: Trading hours may change, subject to National Holidays or unexplected liquidity circumstances. Please make sure to check our main page for notifications on changes of trading hours.
X
  • Trading account currency: EUR
  • Currency pair traded: EUR/USD at 1.34500
  • Lot Size traded: 1.00 (100,000 units)
  • Leverage: 1:200

Margin = 100,000/200 = EUR500

  • Trading account currency: USD
  • Currency pair traded: EUR/USD at 1.34500
  • Lot Size traded: 1.00 (100,000 units)
  • Leverage: 1:200

Margin = 100,000*1.34500/200 = USD 672.50