Forex exchange market is the largest market that sells and exchanges the currency. The concept for the Forex and Forex trading is changed and kept on changing for its improvements. It is the work of the bank, but now it is given to the private owners. The bank has given it to them because technology is very advanced and they pay them the necessary infrastructure. The banks sell and purchase the Forex trader at higher prices and sell them at lower prices because you cannot sell vice versa in this market.
Spread is only pay to the market and that is the main earning. This currency Forex exchange is categories in two currencies. First is base currency and other is quote currency. The spread is the difference of the bid and ask price of given currency. The brokers apply the altered quotes on the transaction fees and earn lot of money.
Forex do not know any rules and regulation because SEC cannot apply any type of regulation on it. SEC is regulates the orderly market, so it is the non regulated market. The innermost privates are the commercial banks that are now in the top most banks. Pips are the large digit of quotes. The currency trade with spread available is usually within 1 to 5 pips. EUR or USD bid and ask quote may vary among 1.3000 to 1.3001. It is having the spread of 0.01%.
Most of the currency quotes are purely driven by the supply and demand. Usually the USD hit divert from its direction for a second or minute. When the spread widens or worse you will not let you in at all. This is market, where the market maker has the compulsion to the honor trading to supply the quotes. He will let your order hand until the price slows down.
The brokers also make threat, when the market price slower downs. They will shift the quotes in the direction of the trend and make their markup and delay the execution. After waiting for some time it will gives lower price that occurred meantime. Some of the broker just shut down their server and do not distribute the information and say that there is some technical problem there.
Broker does not want to give the news to the customers. The broker does these types of manipulation and called a big market player. The customer should be bewaring of those brokers. They can trap your money from the lines of resistance and create the technical signals for breakouts. The bank must get some other sort of advantages but the customer might get the inevitable loss.
It is very less that Forex exists for longer, if you are having handful of currency. These currencies have different interest rates. If you are dealing with interest than accounts is reduced or increased with the interest rates. For the slower trend the betting option is good for a price change. The weak currency comes with the high interest rates.
There must be a comparison between Forex and stock market but there are many more good options in the stock market better than Forex. You can be exploited in some medium sized trends and technical analysis. In short Forex is just having no motors. Everything is having its pros and cons so Forex is also having the demerits. You are left with the risky entry and you will get your money, after very long settlement. It is the easy cash cow for the banks so the Forex is running just for their benefit. The new traders should keep in mind that you should focus more on currency pair.
Tags: forex spread trading