Market basics: what to know before your first trade
Forex is the currency exchange market; a CFD is a contract on the price difference without owning the asset. The outcome of a trade depends on how the price has moved, the size of the position and the leverage you use. Leverage magnifies both profit and loss, so a beginner's main task is learning to limit risk. On the WOCM platform, trading conditions and leverage adapt flexibly to your balance: from 1:10 on the entry-level Standard account type to 1:100 on the premium Gold account.
What is Forex?
Forex is the international market where currencies are exchanged. It is not tied to a single exchange and operates from Monday to Friday. The price of a pair such as EUR/USD shows how many dollars one euro costs. It is driven by central bank rates, inflation, employment data, the trade balance and political events.
What is a CFD?
A CFD, or contract for difference, is an agreement under which the trader receives or pays the difference between the opening and closing price of a position. The asset itself is never delivered. If you buy a CFD and the price rises, you make a profit; if it falls, you make a loss. When selling, the reverse applies.
What are a quote, a spread and a pip?
Every instrument has two prices: bid (the price you sell at) and ask (the price you buy at). The difference between them is called the spread. For example, with a bid of 1.1000 and an ask of 1.1002, the spread is 2 pips. A pip is the minimum standard price change; for most currency pairs it is the fourth decimal place.
Trading costs are tailored to each account type: on Silver and Gold, clients receive tight spreads and deep interbank liquidity.
Bid, ask and spread in a live example
Move the spread slider and see what it costs to "enter" a trade at different volumes.
What is a lot?
A lot is the standard trade size. One standard lot of a currency pair is usually 100,000 units of the base currency. The minimum trade size on the WOCM platform is 0.01 lot (a micro lot). The larger the lot, the more each pip is worth. For EUR/USD at 1 lot, one pip is worth approximately 10 USD.
What are leverage and margin?
Leverage lets you open a position larger than your own funds. Margin is the portion of your capital locked against an open position.
Examples for the different White Oak Capital Management account types with a position worth 10,000 USD:
- Standard (leverage 1:10): 1,000 USD margin required.
- Bronze (leverage 1:25): 400 USD margin required.
- Silver (leverage 1:50): 200 USD margin required.
- Gold (leverage 1:100): 100 USD margin required.
If market losses on a position reduce your free equity below the set level, the system closes your orders automatically. This is called a stop out. Protective orders are stored and executed directly on the WOCM server, so they remain active even if your terminal is closed or you are offline.
Margin and stop out
Choose an account type, deposit and volume, then move the price against the position. The diagram shows your margin level and the distance to stop out.
How do I calculate profit or loss?
Example: you buy 0.5 lot of EUR/USD, the price rises by 30 pips and the pip value is 10 USD. Result: 30 × 10 × 0.5 = 150 USD. If the price had fallen by 30 pips, the loss would be the same 150 USD.
Profit and loss
Enter the volume, the move in pips and the pip value; the result appears instantly.
What mistakes do beginners make?
Trading without a stop loss
On the WOCM platform, the risk and position size calculator is built right into the order window to help you avoid this mistake.
Using too much leverage and volume
On the entry-level Standard account type, leverage is conservatively capped at 1:10 to protect beginners' capital.
Opening trades on emotion
After a loss, the urge to "win it back" is where the most expensive mistakes are born.
Ignoring major news releases
To prevent this, an interactive economic calendar is integrated into the WOCM platform.
Expecting to get rich quickly
And taking on unjustifiably high risk.
Skipping demo practice
A demo account is a free way to test a strategy before committing real money.
Quiz: market basics
Six questions with an explanation for every answer.
Frequently asked questions
The minimum deposit at White Oak Capital Management is $10,000 for the entry-level Standard account type. What matters more than the absolute balance, however, is strict adherence to risk management rules and the share of capital you put at risk in a single trade.
You can both make and lose money. A significant proportion of retail traders lose money when trading on their own. That is why we recommend starting on the entry-level Standard account type, which includes Trading Academy training, or choosing a higher tier (Bronze, Silver, Gold) that comes with personal portfolio manager support, analyst sessions, market signals and ready-made diversification strategies.
For a beginner it is safer to use the minimum volume of 0.01 lot, which keeps the potential loss at the stop loss within a pre-calculated, acceptable level of risk.
Test the formulas on a demo account
The position size calculator in the WOCM order window does the maths for you.
Risk warning. All materials provided are for educational purposes only and do not constitute personal investment advice. Trading CFDs and currency pairs with leverage carries a high level of risk and may result in the loss of all invested capital.