Product Statement And Execution Risks
Trading in forex involves substantial risks, including possible and complete loss of funds and is not suitable for all individuals. Clients should make an independent judgment as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors. Emporio Trading Limited (“Emporio”) does not accept account registrations from residents of the United States of America.
Emporio provides forex execution STP (Straight Through Processing). As the forex market trades OTC (over-the-counter), an STP environment allows traders to place their orders directly into the marketplace and taking advantage of multiple Tier 1 liquidity providers. Emporio uses the latest FIX (Financial Information exchange) protocol specifications to provide direct and transparent execution with real trading conditions to all market participants. With our STP model, customers receive direct access to the best bid and offer available from our Tier 1 banking partners. With Emporio your orders are executed under 100 sub mili seconds.
Advantages of our STP model
- Direct Market Access with true bid and offer available for quick, fair execution
- Market execution capabilities with instant fills on next available bid or offer
- Unique order management interface with institutional level market access
Although demo accounts manage to simulate real accounts, there are key factors that differentiate them to a real trading environment. The funds in the account are virtual, eliminating the risk factor of trading, which sometimes is the force of FX trading, and there’s no real dependence on real-time market liquidity. The operational capabilities when executing orders in a demo environment may result in atypically, expedited transactions; lack of rejected orders; and/or the absence of slippage. Additionally, updates to demo accounts may not coincide with those of real accounts.
Emporio aims to provide clients with the best execution available and to have all orders filled at the requested price. However, there are times when, due to an increase in volatility or volume, orders may be subject to slippage. Slippage most commonly occurs during fundamental news events or periods of limited liquidity. During periods such as these, your order type, quantity demanded, and specific order instructions can have an impact on the execution of your order.
Examples of specific order instructions include:
- Good Till Cancelled (“GTC”) Orders: Your entire order will be filled at the next available price(s) at the time it is received.
- Immediate or Cancel (“IOC”) Orders: All or part of your order will be filled at the next available price with the remaining amount cancelled should liquidity not exist to fill your order immediately.
- Fill or Kill (“FOK”) Orders: The order must be filled in its entirety or not at all.
The volatility in the market may create conditions where orders are difficult to execute. For instance, the price you receive in the execution of your order might be many pips away from the selected or quoted price due to market movement. In this scenario, you may be looking to execute at a certain price but in a split second, for example, the market may have moved significantly away from that price. Your order would then be filled at the next available price for that specific order. Similarly, given Emporio’ model for forex trade execution, sufficient liquidity must exist to execute all trades at any given price.
Emporio Market Opinions
Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice or financial advice. If it is determined or held that it is financial advice then it is general only. By using this website, you acknowledge and agree that the information set out on this website has been provided without taking your financial situation, objectives or goals into account. Emporio will not accept liability for any loss or damage (whether arising under contract or tort (including negligence) or otherwise), including without limitation any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
1. Internet Trading Risks
There are risks associated with utilizing an internet-based deal-execution trading system including, but not limited to, the failure of hardware, software, and internet connection. Since Emporio does not control signal power, its reception or routing via the internet, configuration of your equipment or reliability of its connection, we cannot be responsible for communication failures, distortions or delays when trading via the internet. To try and maximize your enjoyment and use of Emporio’ service, Emporio employs backup systems and contingency plans to minimize the possibility of system disruption or failure.
During the first few hours after opening, the market tends to be thinner than usual until the Tokyo and London market sessions begin. These thinner markets may result in wider spreads, as there are fewer buyers and sellers. This is largely due to the fact that for the first few hours after the opening, it is still the weekend in most of the world. There can be various other reasons in addition to the one stated for thinner liquidity. In illiquid markets, traders may find it difficult to enter or exit positions at their requested price, experience delays in execution, and receive a price at execution that is a significant number of pips away from your requested rate.
3. Delays In Execution
A delay in execution may occur for various reasons, such as technical issues with the trader’s internet connection to Emporio’ STP, a delay in order confirmation from a liquidity provider, or a lack of available liquidity for the currency pair that the trader is attempting to trade. Due to inherent volatility in the markets, it is imperative that traders have a working and reliable internet connection. There are circumstances when the trader’s personal internet connection may not be maintaining a constant connection with the Emporioservers due to a lack of signal strength from a wireless or dialup connection.
When the underlying market is very active, the volume of trade/orders entering the online trading platform increases tremendously, which affects the speed of execution. In these circumstances, it may also take longer for a trader to receive an order confirmation.
5. Fast Markets
A fast market is a high-volume trading session marked by extreme price fluctuations and order imbalances resulting from numerous investors entering buy or sell orders for the same currency simultaneously. Because of these imbalances, wide price variances in short periods of time are common. On any given day, fast markets can affect a particular currency, groups of currencies or the market as a whole. Fast markets can be caused by material news announcements, market developments and even trading halts taking place in less volatile currencies or in other securities. The ability to execute orders in fast market conditions may be severely limited, and order execution may be delayed significantly. Furthermore, market orders entered in fast market conditions may be executed at prices that are significantly different from the prices quoted at the time the orders were entered.
Sunday’s opening prices may or may not be the same as Friday’s closing prices. At times, the prices on the Sunday openings are near where the prices were on the Friday’s closing. At other times, there may be a significant difference between Friday’s close prices and Sunday’s opening prices. The market may gap if there is a significant news announcement or an economic event changing how the market views the value of a currency. Traders holding Positions or orders over the weekend should be fully comfortable with the potential of the market to gap.
7. Weekend Risk
Traders who fear that the markets may be extremely volatile over the weekend, that gapping may occur, or that the potential for weekend risk is not appropriate for their trading style, may simply close out orders and positions ahead of the weekend. It is imperative that traders who hold open positions over the weekend understand that the potential exists for major economic events and news announcements to affect the value of underlying positions. Given the volatility expressed in the markets it is not uncommon for prices to be a number of pips away on market open from market close. We encourage all traders to take this into consideration before making a trading decision.
8. Rollover/Swap Rates
Rollover is the simultaneous closing and opening of a position at a particular point during the day in order to avoid the settlement and delivery of the purchased currency. This term also refers to the interest either charged or applied to a trader’s account for positions held “overnight,” meaning after 5 p.m. ET on trading Platforms. The time at which positions are closed and reopened, and the rollover fee is debited or credited, is commonly referred to as Trade Rollover (“TRO”). It is important to note that rollover charges will be higher than rollover accruals. When all positions are hedged in an account, although the overall net position may be flat, the account can still sustain losses due to the spread that occurs at the time rollover occurs. Spreads during rollover may be wider when compared to other time periods because of liquidity provider’s momentarily coming offline to settle the day’s transactions. For more on rollover/swap rates and how it works click here Roll-Over and Swap Rates.
9. Margin Call Policy
Please note that Emporio does not provide a margin call warning to clients prior to liquidating open positions. Margin calls are triggered when your usable margin reaches zero. This occurs when your floating losses reduce your account equity to a level that is less than or equal to your margin requirement. Therefore, the result of any margin call is subsequent liquidation unless otherwise specified. Margin call is generated by your trading platform when your account value is equal to or less than a certain percentage of the Minimum Margin Requirement. We advise all clients and traders to strictly adhere to margin requirements when trading.
- Minimum Margin Requirements on Open Positions must be maintained by the customer at all times. Any or all open positions are subject to liquidation by Emporio should the Minimum Margin Requirement fail to be maintained.
- Margin requirements may change at any time. Emporio will do its best to inform the client about any projected changes by email and via the trading platform’s message system at least a week before changes go into effect.
- The placing of Stop Loss Orders, used to minimize losses, is the client’s responsibility
10. Reset Orders
Market volatility creates conditions that make it difficult to execute orders at the given price due to an extremely high volume of orders. By the time orders are able to be executed, the bid/ask price at which a counterparty is willing to take a position may be several pips away.
11. Limit/Stop Orders
All limit/stop orders such as stop loss/buy limit/buy stop/sell limit are executed as market orders. It’s not guaranteed that your limit/stop orders will execute at the price set by you. Though Emporio ensures that all orders are executed at your quoted price but due to increased volatility in the market, it is possible that you may experience a slippage of few pips under mili-sub seconds. In such volatile conditions Emporio still executes your order in less than 200 mili sub seconds.
12. Hanging Orders
During periods of high volume, hanging orders may occur. This is a condition where an order is in the process of executing but execution has not yet been confirmed. The order will be highlighted in red, and the “status” column will indicate “executed” or “processing,” in the “orders” window. In these instances, the order is in the process of being executed, but is pending until Emporio receives confirmation from the liquidity provider that the quoted prices is still available. During periods of heavy trading volume, it is possible that a queue of orders will form. That increase in incoming orders may sometimes create conditions where there is a delay from the liquidity providers in confirming certain orders.
Depending on the type of order placed, outcomes may vary. In the case of a Market Range order that cannot be filled within the specified range, or if the delay has passed, the order will not be executed. In the case of an At Market order, every attempt will be made to fill the order at the next available price in the market. In both situations, the “status” column in the “orders” window will typically indicate “executed” or “processing.” The trade will simply take a few moments to move to the “open positions” window. Depending upon the order type, the position may in fact have been executed, and the delay is simply due to heavy internet traffic.
13. Greyed Out Pricing
Greyed out pricing is a condition that occurs when forex liquidity providers that supply pricing to Emporio are not actively making a market for particular currency pairs and liquidity therefore decreases. Emporio does not intentionally “grey out” prices; however, at times, a severe increase in the difference of the spread may occur due to a loss of connectivity with a liquidity provider or due to an announcement that has a dramatic effect on the market that limits liquidity. Such greying out of prices or increased spreads may result in margin calls on a client’s account.
The ability to hedge allows a trader to hold both buy and sell positions in the same currency pair simultaneously. Traders have the ability to enter the market without choosing a particular direction for a currency pair. Although hedging may mitigate or limit future losses it does not prevent the account from being subjected to further losses altogether. In the forex market a trader is able to fully hedge by quantity but not by price. This is because of the difference between the buy and sell prices, or the spread. At Emporio, while a trader is fully hedged the margin requirement is zero, and when one leg of the hedged position is closed the remaining open exposure will be subject to the normal margin requirement for the specified pair. This can be monitored at all times in the simple dealing rates window. While the ability to hedge is an appealing feature, traders should be aware of the following factors that may affect hedged positions.
15. Diminishing Margin
A margin call may occur even when an account is fully hedged, since spreads may widen, causing the remaining margin in the account to diminish. Should the remaining margin be insufficient to maintain any open positions, the account may sustain a margin call, closing out any open positions in the account. Although maintaining a long and short p position may give the trader the impression that its exposure to the market’s movement is limited, if insufficient available margin exists and spreads widen for any period of time, it may result in a margin call on all positions.
16. Exchange Rate Fluctuations (Pip Costs)
Exchange rate fluctuations, or pip costs, are defined as the value given to a pip movement for a particular currency pair. This cost is the currency amount that will be gained or lost with each pip movement of the currency pair’s rate and will be denominated in the currency denomination of the account in which the pair is being traded.
17. Governing Law And Jurisdiction
By accessing this website, you agree that all matters related to your access to, or use of, this website shall be governed by the statutes and laws of Vanuatu, without regard to the conflicts of laws principles thereof. Emporio makes no representation that materials on this website are appropriate or available for use in other locations, and accessing them from territories where their content is illegal is prohibited. Those who choose to access this site from other locations do so at their own initiative and are responsible for compliance with applicable local laws.
* Leverage is a double-edged sword and can dramatically amplify your profits. It can also just as dramatically amplify your losses. Trading foreign exchange with any level of leverage may not be suitable for all investors
Notice To Online Traders
At Emporio, we want to encourage our clients to trade with caution, and not to rush with any decision-making process. We want to warn them that trading involves a substantial risk and both profits and losses can be made from trading. More importantly, we encourage our traders to arm themselves with knowledge and professional advice before undertaking such activity
Trading or investing in the forex market contains substantial risk and may not be suitable for all traders.
Three rules for trading:
- know what you are buying.
- know the ground rules under which you decide to buy or sell a currency.
- know the level of risk you are undertaking.
Our clients and prospective clients should remember that it is just as easy to lose money through the click of a mouse as it is to make it. Most people who jump into trading without a serious plan, lose money. For most individuals, the forex market should be a place to invest, not actively trade. The technology available at Emporio is in many respects similar to that which is used by professional traders. Retail investors should exercise caution before attempting to imitate the style of trading and assuming the risks undertaken by market professionals.
Trading Tips:Create a systematic approach to trading
- Trade with funds you can afford to lose
- Use the most efficient forms of execution
- Keep in mind that the lower the leverage, the less the risk
- Be psychologically prepared- reduce your fear and keep calm
Regardless of the platform used, every internet trader or investor should be aware of the effects of systems failure, the enormous price volatility of many stocks, the possible negative results of using margin accounts (Margin Call Policy) and the risks associated with active trading.
System failure can affect anyone conducting business over the internet; among other things, trades might not be executed at all or trade executions could be at prices significantly different from the price quoted at the time the order was entered. There is a variety of reasons why a user could experience delays or failures in order placements, order cancellations, trade executions or trade reports. Among them are: increase in volume and demand beyond system capacity; errors or defects in the software or the data services; internet service providers having technical problems; communications lines problems or failures; satellite dish problems or failures; extended power outages; and sabotage created by hackers. The point we are making is that no system is perfect. Delays and failures are risks that you must assume. In using our systems, you accept that solely you are taking those risks, and that we cannot be held responsible by you if they occur, regardless of the reason. To put it plainly, you should not always expect high-speed order placements, cancellations, executions and reporting. We recommend that you have a back-up plan to place, cancel, execute and confirm orders if you encounter problems using Internet software and systems.
You should also be aware of the risks associated with trading in a rapidly-moving and sometimes volatile market and make sure that you think about how to limit your risk. For example, volatility can significantly affect your execution price if you are placing market orders. In other words, just because you see a price on your computer screen does not mean that you will get that price. To avoid buying or selling a currency at a price higher or lower than is acceptable to you, you might consider using limit orders rather than market orders. A limit order is an order to buy or sell a currency at no higher or lower than a specified price. However, using a limit order often results in the trade executions failing to occur. As you can see, trading, and particularly active online trading, is complex. You must understand what you are doing and the risks you are taking before you decide to trade.