WHO IS A FOREX BROKER
A forex broker connects retail forex traders with the forex market.That is, they give advice and offer assistance to currency traders. The forex market is a worldwide market that operates round the clock and such a vast market is filled with pitfalls. Using a forex broker will allow the trader to do business on the currency market 24- hours a day and the broker will also advice on the price of the leading currencies around the world at any point in time. Whether the forex trader records success or failure with a trade boils down to his or her own skill and decision- making, but the help of a competent broker is always recommended. Below are some of the services offered by forex brokers?
1. LEVERAGE- The capacity to use forex leverage comes with every account, and it differs in an amount anywhere from 10:1 to 100:1. A 10:1 leverage defines that for every $1 in your account, you have $10 to trade. Leverage is both positive and negative due to the fact that you can make exponential profits, but you can also suffer from mounting losses. The law requires forex brokers to explain this, and they typically do this in fine print. Recent traders often get excited and exhaust their accounts out quickly if they jump in too fast.
2. SPREAD- When a forex trade account is opened with a broker, they pass it through the market on behalf of the client. In the process of this, they offer a slightly different price than the price they can get. This is called collecting the spread. The spread is known as the commission that is mostly evident to trading from the trader’s point of view. However, the allure of the spread is the fact that it is taken from the leveraged trade size, not the account balance size.
3. TRADING PLATFORMS-Forex brokers offers multiple trading platforms that could be operated on multiple devices ranging from iPhones, Androids to Mac and Desktops.
4. EDUCATION-Forex is a relatively new phase for many investors who would like to come into the market. News that affects a stock price may have a radically different effect on the price of a currency. Also, learning how to figure out the price of currencies and invest in them in a relative environment is often uncomfortable territory when a prospective investor first comes into the market. To discard the lack of knowledge possessed by many, due to how unique the forex market is, many brokers have set up divisions dedicated to education and research to help traders get up to speed and informed on a day-to-day basis.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.