Hello
i am a newbie in forex and there is somthing that
i dont understand.
what exactly broker is doing?
and why do you need a broker if you yousing fap turbo?
(sory for the bad english)
As a retail trader, your broker is the gateway to the market. What you have asked regarding fap-turbo is kind of like asking why you need an internet provider when you have a computer. You cannot just connect straight to the internet, you need a service provider in the middle to bridge your connection. The same applies to forex, major banks connect to the interbank network but retail traders are too small to have access.
thank you
but can you be more specific about what the broker is doing
iam realy sory for the stuppid qustions
simply put :
you - internet explorer - internet
you - forex broker - forex market
Broker gives you an account with access to their price feeds. Also he provides you with leverage so you can make money from the price changes.
Without a broker and leverage you could convert 1000 USD to EUR at the bank you would recieve roughly 1350 Euros, now say the price of the Euro might rise by 0.5cents against the dollar so you convert your Euros back to US Dollars you made 0.5cent profit per Euro so you made $7.50 profit.
You then need to subtract the fee the bank charges for the currency conversions, you would probably end up with no profit, or even more likely, a loss.
If you do this through a forex broker trading with a standard account with 100:1 leverage and Euros increase by 0.5 cents which in forex jargon is known as 50 pips, you would make somewhere in the region of $500 assuming you put your buy order in at the right time and closed it out at the right time.
What the broker actually does when you open a buy order is he loans you the money to buy a lot more currency than you could afford, then when you close out your order he sells it for you so you can pay him back and pocket the difference, or vice versa if you open a sell order the broker sells that currency for you at the current price then buys it back at the price its at when you close your order and you pocket the difference.
That difference is what you cover with your account balance so if you cause the broker to lose money by entering a losing order, he takes the loss from your account, so if you enter a buy order and the price falls by 0.5cents and you get a loss of $500 before you close out the order, the broker takes that $500 from your account. If your account balance is not enough to cover that loss the broker would have closed out your order before the loss got that high.
That is technicaly what happens when you open and close orders with a forex broker, in practice all you do is choose the right time to open and close orders. The broker and his software does the rest of the transactions for you.
thank you. you helped me alot
one lest thing can somone advise me for a good broker
One of the most well respected brokers seems to be Dukascopy based in Switzerland. You just don’t seem to hear complaints about them as you do with many others.
Having said that, I’m not entirely convinced all the complaints you read about other brokers are valid complaints, I wonder if so many of them who allow such small initial deposits attract people who havent really taken the time to learn forex properly and open an account with their $10 then lose it and blame the broker
thx man ./
I plan on going with MIG Bank (Swiss) when I go live. I am currently demo trading with them. One thing that I like is that they guarantee your deposit up to 100,000 CHF because they are a actual Swiss bank. Dukascopy offers this as well but as far as I can tell this only applies to accounts that have over $100,000 although they have partner programs with some banks, you should investigate this option on their website. They look great too but I like the reputation that goes with being an actual Swiss bank.
I am a new trader, not even live yet so I would be very interested if anyone has better info. I haven’t been able to find very many reviews on MIG Bank.