NEWS FUSE

The Forex trading market is quickly becoming one of the most popular markets for trading.

Not only are the experienced traders looking for this market to maximize your trading profits , but many new individual investors are now able to trade the Forex market - just as they do stocks and futures .

More and more people are seeing Forex not only as a new way to diversify your portfolio , but also are finding that it is becoming the most profitable component of their investments.

And that's because of the many advantages of Forex over other markets like stocks or commodities . This is what we normally see advertised on Forex:

- Liquidity unparalleled . It is the largest financial market in the world by far . Nearly $ 2,000,000,000,000 is traded daily !

- Excellent potential for leverage. Individual investors have access to leverage of 100:1 to 200:1

- No Commissions (more on this later)

- The low trading costs .

And yes, the Forex market really offers all these advantages .

But the last two points above speak of the costs , and that's what we like to focus in this article.

Like any negotiation, there are costs involved , and while these may be much lower than it used to be, it is important to understand what they are.
Let's start by looking at stock trading , something that most of us , investors are very familiar .

When trading stocks , most investors have an account with a broker somewhere and have funds deposited in that account.

The broker then execute operations on behalf of the account holder , and of course, in exchange for the provision of that service , the agent will want to be compensated.

With stocks , generally , the broker will earn a commission to execute the operation . They charge a fixed dollar amount per transaction , or a dollar amount per share , or (more commonly ) a fee scale based on how large your office.

And , they will charge for the two sides of the transaction . That is, buying stocks commission is obtained , and then when you sell the same shares they charge another fee .

With Forex trading , brokers constantly advertise " no commission " . And, of course , that's true - except for some brokers , who charge a commission similar to the actions .

But also , of course , runners are not performing their services free trading . They also make money.

The way to do this is by charging investors with a "spread" . In short , the spread is the difference between the purchase price and the selling price of the currency being traded .

The broker will add this spread in the price of the transaction and retain its share to trade.

Thus, while not a fee itself behaves in practice in the same way . It's just a little more hidden.

The good news is that although this differential is usually only if part of the transaction. In other words , you pay the expansion with the purchase and then again when you sell. Usually only charged on the side of "buying" trades.

So the spread is really the main cost of trading Forex and you should pay attention to the details of what is offered by different brokers .

The spreads offered can vary quite dramatically from broker to broker . And while it may not seem like much of a difference to be trading with 5 pip pip spread spread vs. 4 but it can add up very quickly when multiplied by the number of transactions you make and the amount of money than is trade. Think about it , 4 pips vs 5 pips is a difference of 25 % in their marketing costs .

The other thing to recognize is that the spreads can vary depending on the currencies that you trade and what type of account is opened .

Most brokers will give you different spreads for different currencies. The most popular currency pairs like EURUSD and GBPUSD usually has the lowest spreads , while coins that have less demand is likely to trade at higher.

Be sure to think about what coins are more likely to be trading and find out what their margins should these currencies.

In addition, some brokers offer different spreads for different types of accounts. A mini account, for example , may be subject to higher margins than a full contract account .

And finally , because the margins are actually the difference between the bid and ask prices determined by the free market , it is important to recognize that there are "guaranteed " . Most racers will tell you that there may be times of low demand periods or very active trading spreads widen and will charge such wider dissemination .

These tend to be more rare situations , because the Forex market is really big and the demand and supply are generally quite predictable , but occur , especially with some of the minor currencies . So it's important to be aware of it.

In short, when Forex trading , understand that the "spread" is really the most important factor in trading costs .

Spreads can vary significantly between brokers , account types and currencies negotiated . And small differences in the distribution can really add thousands of dollars in marketing costs more than even a few months .

So make sure you understand what the coins will be trading , how often and what type of account and the use of factors to help decide which broker can provide the best trading costs .

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