What is Metals Trading?
Metals Trading is a term that is commonly used by metals trading investors and metal traders to describe trading activity in the metal market that is carried out by traders, investors & speculators.
In metals trading a trader can buy or sell metals. A trader will buy metals if they think the value of the metals is likely to appreciate in the future. A Metals Trader will sell metals if they think the value of the metals is likely to depreciate in the future.
The Metals Market is an over the counter market which means trading is carried out through a network of the big international banks; this metals trading network is commonly referred to as the interbank network. This interbank metals trading network consists of banks and metals brokers which are in different locations. These interbank network is responsible for providing the metals prices at any particular time to the traders and other metals market participants who want to buy or sell metals. In metals trading the metals price is constantly changing and this metals price is denoted by what is known as a Metals Trading Quote. In Metals Trading the Metals Price is displayed as a Metals Quote. This metals trading quote is constantly changing and the interbank network will update automatically the current metals trading quote and metal traders can then trade the metal at the current metals price.
Metal Trading Quotes
Metals prices of metals trading instruments is displayed using Metals Trading Quotes. This is the metals price at which any metals trader wanting to trade metals will trade at.
Because metals prices are constantly changing it means that metal traders can take advantage of these metals price movements to make profits by trading these metals price movements. The metals price of any metals instrument will keep moving because of demand supply. This is because there are many participants trading metals in the open metals market and therefore this means that the metals price quotes will get determined by the current market forces. These market forces may be determined by factors such as an increase in demand for metals.
Metal Trading Pips
In metals trading the metals price moves are measured in points commonly known as Pips in the metal market. The pip is used to calculate the profit or loss that a Metals Trader makes in a particular trade. For example if a trader makes a trade which moves 50 pips in his direction, then the profit of the trader will be calculated as 50 metals trading pips. Pip in metals trading is represented as the second last decimal point in the Metals Trading Quote and it is made up of pipettes - pipettes are fractions of a Metals Trading Pip.
Metal Trading Lots
In metal trading - metals is traded in units known as metals lots or metals trading contracts.
Metals Trading Leverage
Because not many metal traders can afford to trade large units of metals trading contracts, there is metals trading leverage in metals trading which means that metal traders can borrow money and use the borrowed money to make trades with. For example metals leverage of 100:1 means that a trader with capital of $10,000 can borrow up to 100 times using the 100:1 leverage option and therefore after borrowing using this metals trading leverage the trader will have a total of $10,000 multiplied by 100, which means the trader will have a total of $1,000,000. This metals leverage is what makes Metals accessible to retail metal traders because retail metal traders can start with little capital of their own and use metals leverage to borrow the rest of the money required for trading. Money that the trader deposits is referred to as a metals trader's margin & a trader can continue borrowing money using this metals leverage option as long as they have the required metals trading margin in their metal trading account. This is why metal traders must have the required metal trading account balance in their metal account to open the trades they want to.
