|
Dealing Handbook
Trading Hours
The trading desk is open 24 hours daily from 17:00pm ET Sunday through 16:30 ET on Friday. (TOP)
Currency Pairs
24-hour trading is available in 17 currency pairs: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY, AUD/JPY, CHF/JPY, EUR/AUD,
GBP/CHF, NZD/USD, EUR/CAD and CAD/JPY.
(TOP)
Dealing Spread
Our normal dealing spreads are 4-5 pips for the major currency pairs. (TOP)
Transaction Sizes (Minimum & Maximum)
Gold Standard Accounts:
On the dealing platform, the minimum transaction size is one lot, or 100,000 of the base currency, with a minimum margin deposit of 2% (50:1 leverage). For example, a US$100,000 position would require an initial margin deposit of US$2,000. The maximum deal size available online is 25 lots (2.5 million of the base currency). Trades over 2.5 million and up to 100 million may be executed over the phone. (TOP)
Silver Standard Accounts:
Minimum transaction size for Silver standard accounts is 1 lot, or 100,000 of the base currency, with a minimum margin deposit of 1% (100:1 leverage). For example, a US$100,000 position would require an initial margin deposit of US$1,000. (TOP)
Silver Mini Accounts:
Minimum transaction size for Silver mini accounts is 1/10th standard sized lot, or 10,000 of the base currency, with a minimum margin deposit of 0.5% (200:1 leverage). For example, a US$10,000 position would require an initial margin deposit of
US$50. (TOP)
Fees
Self Directed - Gold & Silver Accounts
MHFX Gold and Silver Self-Directed Accounts charge NO trading commissions or fees, regardless of account balance or trading activity.
MHFX is compensated through the Bid & Ask Spread. (TOP)
Managed Platinum Accounts
On managed accounts, a Performance Fee equal to 25% to 35% (depending on the size of the
account) of net new profits is charged on a monthly basis or upon exit
from the managed account. (TOP)
Price Quotes
Clients have the ability to execute trades directly from real time streaming bid/ask quotes. Live prices are continuously published to clients via the dealing software, and the traders can at any time click on the current bid or offer and instantaneously execute a trade. Prices are updated automatically as market conditions dictate. On average, the traders make 100,000 prices per day. More importantly, we publish the same dealing price to the entire client base and allow any client to deal on the available price. This ensures that all clients receive a firm, fair price on their FX transactions.
(TOP)
Trading over the Internet
Executing a deal via the Internet is a simple two-step process. Simply enter the number of lots and then click on the bid (buy) or offer (sell) for the currency pair you wish to trade - your deal is automatically executed. The dealing software automatically calculates the initial margin requirement based upon the notional amount of the deal, and if sufficient funds are available in your account, will accept the transaction. Deals are confirmed online, normally within one second, and the system instantaneously updates both your open position and calculates your current P&L. (TOP)
Phone Trading
Live clients may trade over the telephone with the trading desk 24 hours a day, from Sunday at
17:00 ET through Friday at 16:30 ET. All trades executed via the phone are subject to a pre-deal margin availability check and will be manually entered into the customer's account for integrated P&L analysis and reporting. All telephone calls are recorded for the safety of both parties.
Phone Dealing Procedure:
Immediately state your ID and Password.
State your interest. Always be sure to include the number of lots and the currency pair you are interested in.
Example: "I would like a price on 5 lots of Euro/Dollar."
The Dealer will then provide a 2-way price quote.
Example: "Euro/Dollar is 1.2416/20" (the first number being the bid, the second the offer)
State your trade.
Example: "At 1.2416, I sell 5 lots of Euro/Dollar,"
or
"At 1.2420, I buy 5 lots of Euro/Dollar"
If you do not wish to deal at the quoted levels, simply say "Nothing Done", hang up and call again later. Or, place a limit or stop order at your desired level.
Remember: A price given is the dealing price at that time; haggling is not allowed nor are Traders allowed to remain on the phone until the price changes.
It is important to remember that Dealing Desk phone lines are reserved for dealing/order purposes only, and that proper Phone Dealing Procedures be observed at all times. All other inquiries, such as account issues or general information, can be addressed via email:
forex_support@market-harmonics.com.
(TOP)
Order Types
The dealing platform provides sophisticated order entry and tracking. Orders may be entered at any rate - inside or outside the existing spread - using the following orders types:
* Limit orders
An order with restrictions on the maximum price to be paid or the minimum price to be received.
Using the above example, if a trader is long USD/CHF is 1.4627, a limit order would be entered to sell dollars above that price, for example, 1.4800
* Stop loss orders
Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor's position.
If the investor above is long USD at 1.4627, an investor might wish to place a stop loss order for 1.4549, which would limit his loss should the dollar depreciate, possibly below 1.4549
As a rule, sell stops are filled on our bid, and buy stops are filled on our offer. This allows
us to fill client stop orders at the rate they requested in almost every case. In the rare instance that the market gaps over a requested rate, the stop is filled at the best available price. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a stop order is placed to sell USD/CHF at 1.4549, the trader will be filled when the bid reaches 1.4549 (i.e. the bid/offer is 1.4549/54).
* One cancels other orders (OCO's)
A contingent order providing that one part of the order is cancelled if the other part is executed. This is a particularly useful order type in that it allows traders to execute specific trading strategies based on technical analysis - without having to watch the market tick by tick.
As above, with the trader long USD/CHF at 1.4627, a typical OCO order would be a stop loss at 1.4700 and a take profit (Limit) at 1.4562. If one part of the order is filled, the other is automatically cancelled.
If / Then Single
A conditional order providing that if the first order ("If" order) is executed, the second order ("Then" order) is activated as a live, single order.
In cases where the If order does not execute, the Then single order will remain dormant. When either part of an If / Then order is cancelled, all parts of the order are cancelled as well.
An example of an If / Then single order would be to first place an 'If' limit order to buy EUR/USD at 1.0690, fifty points below the current market rate of 1.0740. The 'Then' part of the order would be a limit sell order to take profit at 1.0770 (eighty pips above the 'If' order execution rate of 1.0690). If the market dips to 1.0690 the 'If' order will execute and the 'Then' leg of the order will become active. Note: the 'Then' order could also have been a stop loss order at 1.0650 (forty pips below the execution rate of 1.0690).
If /Then OCO
A conditional order providing that if the first order ("If" order) is executed, the second order ("Then" order) is activated as a live, One Cancels Other (OCO) order. Full description of an OCO order. The execution of either one of the two 'Then' orders automatically cancels the other.
In cases where the 'If' single order does not execute, the 'Then' OCO order will remain dormant. When any part of an If / Then OCO order is cancelled, including either leg of the OCO order, all parts of the order are cancelled as well.
An example of an If / Then OCO order would be to first place an 'If' limit order to buy USD/JPY at 118.80, fifty points below the current market rate of 119.30. The 'Then' part of the order would be an OCO order: one leg of the OCO could be a limit sell order to take profit at 119.60, (eighty pips above the execution rate of 118.80) the other leg a stop loss order to sell at 118.50 (thirty points below the execution rate). If the market reaches 118.80, the 'If' single order is executed, and the 'Then' OCO order is activated. If activated, the execution of either leg of the 'Then' OCO order automatically cancels the other.
For step by step instructions on how to place orders on the trading platform, see our User Guide.
All of the above orders may be entered as Day Orders, entered today and good until end of NY business day (16:30 ET). Or, clients may choose to may enter a
Good 'til Cancelled Order (GTC), which is valid until the order is executed or cancelled.
(TOP)
Order Execution
*First In First Out (FIFO)
Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.
* Stop Loss Orders - Execution Rules
As a rule, sell stops are filled on our bid, and buy stops are filled on our offer. This allows
client stop orders to be filled at the rate they requested in almost every case. In the rare instance that the market gaps over a requested rate, the stop is filled at the best available price. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate.
For example, if a stop order is placed to sell USD/CHF at 1.4549, the trader will be filled when the bid reaches 1.4549 (i.e. the bid/offer is 1.4549/54). This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. (For traders who are accustomed to this practice, entering a stop loss at 1.4544 would achieve their goal.)
Sell limit orders are filled when the bid reaches the requested rate; limit orders to buy are filled on the offer. For example, a limit order to buy EUR/USD at 1.0456 will be filled when
MHFX's offer hits 1.0456.
* Good Til Cancelled (GTC) Orders - Execution Rules
All GTC orders remain open until they are triggered or cancelled. If you close out a position manually, you must cancel any order(s) relating to that position.
* Orders left over the weekend
Orders left pending at close of trading on Friday at 16:30 ET or placed over the weekend are subject to a gap open on Sunday evening when trading starts at
17:00 ET. For both stop loss and limit orders - if your order is triggered due to news, events or other fundamental factors, it will not be executed over the weekend. Your order WILL be executed at the prevailing price when
the trading desk opens Sunday. Because of the additional gap risk involved, you may want to reconsider leaving open orders over the weekend.
(TOP)
Margin
Gold Standard Accounts:
The initial margin requirement is US $2,000 on a minimum trade size of $100,000. The system performs an automatic pre-deal check for margin availability, and will only execute the deal is if the client has sufficient margin funds in his or her account.
Margin calls may be made when a client's initial margin drops in value by 50% based on the value of any open positions. We reserve the right to liquidate any open positions should a client's initial margin drop by 75%. This is an important risk management strategy for both us and our clients; it ensures that clients do not lose more than their account balance.
Silver Mini and Silver Standard Accounts:
The maximum available margin is .5% (200x leverage) for mini accounts and 1% (100x leverage) for standard accounts. Traders always have the option of employing a lower degree of leverage.
The minimum margin requirement is approximately $50 per lot in a mini account and approximately $1000 per lot in a standard account. The requirements for leverage may vary with account size or market conditions, and may be changed from time to time, at the sole discretion of
Gain Capital, the clearinghouse for MHFX.
If maximum leverage is employed, traders must maintain the minimum margin requirement on their open positions at all times. It is the customer's responsibility to monitor his/her margin account balance. MHFX has the right to liquidate any or all open positions whenever a trader's minimum margin requirement is not maintained. This is an important risk management feature designed to strictly limit trading losses in your account.
Margin Example:
You have $500 in a Silver mini account. You execute 8 mini lots of USD/JPY (80,000 in notional value) at 200x leverage, using $400 for margin. This leaves a $100 balance in the account. If the unrealized P&L of your net total open position falls by more than $100, the position is under margined and MHFX will liquidate all open positions.
To avoid liquidation of your positions, do not use your entire account balance as margin for open positions. Instead, leave enough funds in your account to withstand a market movement against your open positions. We suggest you always use stop loss orders to limit your downside risk.
It is important to remember that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally great.
Please contact MHFX client services should you wish at any time to use a lower degree of leverage or otherwise adjust the margin settings in your
account.
(TOP)
Rollovers
A rollover is the simultaneous closing of an open position for today's value date, (normally at the end of the trading day) and the opening of the same position for the next day's value date at a price reflecting the interest rate differential between the two currencies. Clients either earn or pay away points on rollovers, depending on the direction of their positions and interest rate differential between the two currencies involved.
(TOP)
Unless specific settlement instructions are provided, all open positions are automatically rolled forward to the next value date each
N.Y. trading day at 17:00 ET.
MHFX clients have the opportunity to earn interest on rollovers, depending on the direction of their positions and interest rate differential between the two currencies involved. For example, UK interest rates are significantly higher than Japan's, so if a trader is long GBP/JPY (i.e. holding British Pounds), they will earn interest on the roll. Conversely, if a trader is short GBP/JPY (i.e. holding yen) they will pay interest on the rollover.
The spot forex market is traded on a two-day value date. For example, for trades executed on Monday, the value date is Wednesday. However, if a position is opened on Monday and held overnight (remains open after
17:00 ET), the value date is now Thursday. The exception is a position opened and held overnight on Wednesday. The normal value date would be Saturday; because banks are closed on Saturday the value date is actually the following Monday. Due to the weekend, positions held overnight on Wednesday incur or earn an extra two days of interest. Trades with a value date that falls on a holiday will also incur or earn additional interest.
Rollover credits or debits are reflected in the unrealized P&L of the open position, and a rollover report (available in the "Reports" tab of the trading platform) provides additional detail of rollover activity.
(TOP)
Daily Housekeeping
Daily Housekeeping will occur each evening from 17:00 to 17:15 ET. During that time, important system maintenance tasks will be performed and back office staff will conduct daily rolls. Online trading MAY be unavailable, but we will accept phone orders.
(TOP)
Confirmations
Deals are confirmed on screen, typically within one second. Full transaction details maybe accessed on screen, including date, time, rate, notional amount bought and sold, USD value, and reference number.
(TOP)
Interest
Client funds maintained in a non-segregated Gold or Silver account earn interest on deposited funds not used as posted margin. In addition, clients either earn or pay on overnight rollovers, depending on the direction of their positions. Open trades are rolled forward in the base currency of the position. At the end of each month, all accrued interest is credited to the client's US Dollar account.
(TOP)
Reporting
The dealing software tracks all trading activity in real time, allowing clients to view current open positions, real-time profit and loss, margin availability, account balances, and all historical transaction details directly on-screen.
In addition, by clicking on the 'reports' tab on the menu bar, clients may access five ad hoc reports:
Account Value Summary - an online monthly account statement. View current account balance (realized P&L) for a selected month, as well as all deposits, withdrawals, interest earned, and fees charged (if any).
Detailed Transaction Listing - lists complete trade detail for any selected date range, including deal date, currency pair dealt, trade direction (buy or sell), contract size for both currencies in the pair dealt, and executed deal rate.
Open FX Positions - a summary view of all open positions, including contract size, USD value, average rate of open positions,
reveal rate (current market rate), and unrealized P&L. This report supplements real-time position information available in the position management screen of the trading platform.
Order History - provides detail on all order activity for a selected data range, including order entry date and time stamp, listing of all cancelled and/or executed orders, along with its reference number. The Log Entry column provides a confirmation number and action detail for any order.
Rollover History - provides rollover details for any transaction held open past 1700 EST, including rollover rate and USD value. May be generated for any given date range.
Note: All reports can be printed and/or exported into Microsoft Excel via a simple cut and paste.
(TOP)
Account Statements
Customer account statements are provided online in the Reports section of the trading platform. Customers have access to a full suite of available reports, including account value summary, detailed transaction listing, open positions, etc. Reports may be generated for any date range, and printed or saved for future reference. For more information on the available reports, please see our user guide.
Monthly account statements are mailed upon request only. To receive monthly account statements by mail, you must complete and return a Request to Receive Monthly Account Statements by Mail.
(TOP)
Account Protection
GAIN Capital, the clearinghouse for MHFX, holds Financial Institution Bond and Bankers Professional Liability insurance policies to protect deposited funds against failure of service, dishonesty, forgery, alteration etc.
Also, accounts which are opened with $25,000 or more and are maintained
in a segregated account are FDIC insured.
Please note that investment products themselves are not covered by insurance, and therefore are not protected against losses.
(TOP)
Funding Your Account
There are three easy ways to fund your account.
Wire Transfer: The fastest way to fund your account
Funds sent via wire are typically received by the clearinghouse within 1-2 business days, and credited to client's account the day of receipt. All wire transfers should include the client's name and account number in the reference section of the wire.
Bank or Cashier's Check:
Once received, Bank or Cashiers Checks are typically credited to client's account within one (1) business day.
Personal or Business Check:
Funds sent via personal or business check take 5-10 business days (from date of receipt) to clear and be credited to client's trading account, according to our banking partner's posted schedule. This can vary depending on the bank and state of issue. International checks may take several weeks to clear.
(TOP)
Withdrawal Requests
To withdraw funds from an existing account, please email us for a withdrawal request form
(Adobe Acrobat
Required).
Withdrawal requests are processed within two (2) business days of receipt. There is no fee for withdrawal requests via check. Withdrawal requests via wire transfer will incur a $25 fee for wires within the United States, and $40 fee for international wires (including Canada).
To expedite processing, please indicate your account number on all wires, checks, and withdrawal requests and all other correspondence regarding your account. To avoid delays, please include intermediary bank information on all international (non-US) wires.
(TOP)
User Guide
A User Guide in PDF format that explains various features of the trading
platform (e.g., order entry, charting & tech analysis terms, etc.) is available for
download. (Adobe Acrobat Reader
required. If needed, click
to download Acrobat Reader.)
(TOP)
|
