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Trade
Transaction cost is the spread, Commission, etc.
Forex is becoming more popular because of the advantages it possesses in comparison with other markets, in particular stock or commodity exchange:
• Unsurpassed liquidity. Forex is the world's largest financial market. Its daily turnover exceeding 2 trillion US dollars!;
• No fee for transactions;
• The ability to use high leverage even for small private investors.
• Minimum costs in the trading process.
A common practice when trading in stock or commodity market – the participation in the transaction broker intermediary, the earnings which is generated from commissions deductions investors for conducting the purchase or sale of shares or consignment. This can be a one-time payment for each transaction, often tied to its volume, or a fixed monthly "subscription fee". It is worth noting that commissions are paid and the seller and the buyer.
In contrast, Forex brokers (with rare exception) don't charge a Commission.
It is clear that the Forex brokers are not just "sport". They also earn on their customers.
Their main source of earnings is the "spread", or in other words, the difference between the demand price and supply of a currency pair. That is, if you buy a currency pair, you buy its a little more expensive than you can sell at the same time. But the size of these costs will be small, due to high competition among brokers, electronic brokers and the huge liquidity of the currency market.
In a sense, this is also an option of the Commission, but only slightly veiled. Moreover, the spread is charged only for the first time, with the purchase of the lot, and can not cope with its further sale.
Brokers compete for customers, all the while reducing the spreads. Be careful when choosing the broker, try to understand their proposed course of trade, because the spreads at different brokers may vary significantly. Should not be taken spread as a constant, it changes all the time depending on the situation on the market, and sometimes at the request of the broker.
In addition, the spread differs from couple to couple, and in some "rare" pairs its value greatly exceeds the size of the spread for liquid pairs such as EUR/USD or USD/JPY. Thus, the brokers in advance to insure their risks in Your dealings with illiquid pairs.
In addition, the amount of spread often depends on the type open in the brokerage account. For cent accounts he's more for big deposits he will be lower
So Your first task will be selection of the best currency pairs to trade and broker with the lowest spreads and claimed the best conditions for withdrawal from the account. To do this, You should definitely observe the dynamics of spreads at a specific broker in the process of trading volatile, you should listen to the opinion of more experienced colleagues, the benefit of discussion, work through various brokers – the "standard" theme for the Forex forums and independent sites on Forex-related topics, one of which is our portal. On our website you will find the rating of Russian Forex brokers and reviews of their services.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 336
| Rating: 0.0/0 |
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