Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

Wednesday, March 26, 2014


After being introduced with the forex market, traders need to find a place to trade forex. Internet technology has brought the forex brokers at home. Forex brokers are the third parties who facilitate the forex trading. A forex broker provides the opportunity of opening a live account in forex market. 

With the real account with forex broker, traders can invest their money, trade to make profit, and withdraw the profit. Forex brokers also arrange the leverage providers e.g. banks. Leverage helps the traders to trade large volume of currency with small investment.

Source: fba-ag.ch
Commonly, forex brokers provide opportunities of trading with 1:500 leverage. Without leverage forex trading will require huge investment like stocks trading. Leverage is similar to loan. 1:500 leverage means if you have 1USD into your forex account, you will have another 500USD as loan to trade with.

For using the leverage traders are to pay interest on the used fund. In forex if an order is not closed within a day, the traders are to pay interest. The interest on the leverage is called swap in forex trading. Some brokers also offer swap free account for the Muslim traders as paying interest is prohibited in Islam. 

Forex brokers also offer demo or practice account to practice forex trading in real market environment to be introduced with. It is a great opportunity of testing your trading skills with out losing real money.Even some brokers also offer no deposit welcome bonus to start trading with out investment.

Forex brokers commonly facilitate the forex trading with specialized trading software also called trading platform. Most popular trading platforms are metatrader4 and metatrader5. Some brokers also provide some other platforms.

The benefits of a forex broker in providing the service is the spread they gain from every trades. On the platform of a broker you will see a difference between sell price and buy price of a currency pair. The difference between the sell price and buy price is called the spread. The spread is the commission brokers earn per orders. The profit gained by the broker for an order = spread times lot size.

From the above post you know the answer of the following questions,
  • what is a forex broker? 
  • What is forex leverage? 
  • What is swap? 
  • What is spread? 
  • How do forex brokers earn? 
  • Who are the leverage providers? 
  • How forex brokers facilitate forex trading?
  • What are the benefits of leverage?
If you have any questions, please drop a comment below.


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