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By Anthony Trister
Forex Brokers—Your Ultimate Partners In Success
A Forex broker is a broker dealing in foreign exchange, just like real estate
broker who deals in real estate and properties. Simply, a Forex broker is an
advisor who advises you about the forex market. However, the Forex market is
not the perfect place to play with as a novice and beginner as there are many
criticalities involved along with much risk bearing capacities. Novices can
very quickly get their fingers badly burnt. But inexperience is not the only
reason to consider using a Forex broker to trade in the high-risk
international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and
allows you to work for 24 hours a day with major currencies like EUR, JPY,
GBP, CHF etc against the US dollar on the spot, i.e. according to the current
prices on the forex international exchange market. But the level of profits
depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of
technological advancement and increased awareness, we cannot completely
underestimate his role. The new paradigm shift has had something of a
democratizing effect on the financial markets, and in the years that have
followed a plethora of banks and brokerages have extended the range of their
services to a new market by packaging up their online trading systems for the
retail market, enabling the more modest investor to trade from their own
computer screen - even on the previously out-of-reach currency markets. This
is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market,
currencies are always priced in pairs. The quoted price is the level where
we, acting as the market maker, are willing to buy/sell the currency pair. In
the wholesale market, currencies are quoted out to four decimal places, with
the last placeholder called a point or a pip. A pip in most currencies is one
/10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can
find for others).
Let’s see some more information about Spread. As with all financial products,
forex quotes include terms like `bid` and `ask”`. The `bid`, in its simplest
terms is the price at which a dealer is willing to buy (and clients can sell)
the base currency in exchange for the counter currency. The `ask` is the
price at which dealer will sell (and clients can buy) the base currency in
exchange for the counter currency. The difference between the bid and the ask
price is referred to as the spread. The spread defines the trader’s cost,
which can be recovered with a favorable currency move in the market. The
value of a pip is determined by the pair of currencies being traded, the rate
at which the currency pair is trading and the size of the position being
traded.
There are many great Forex brokers, like COESfx, who maintains tight,
competitive spreads in the four major currencies against the Dollar, and a
total of 17 currency pairs including USD/CAD and AUD/USD. Some of the major
features of COESfx are:
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
For details, about this forex broker as well as their offerings, please visit:
http://www.coesfx.com.
Anthony Trister is a currency trader and is an owner of OneDayTrades which
offers free, mechanical forex signals and an automated trading program for
those wanting to trade forex. Free access available here: http://www.
onedaytrades.com
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