Forex trading online is usually done through a Forex broker. A broker is an online trading platform who offers the traders currency pairs they can buy and sell. Selecting a broker is a matter of trust and the traders have to collect information about the broker before they pick the right one for them. One concern traders have is the money they deposit. They are
concerned about how their money is placed and if they are sure to get their money back if they want to withdraw from the broker. It is a reason why it is important to collect information about the broker and read about their money rules. Information is usually found on their website and on the Internet where traders are sharing experiences with the individual brokers.
The mindset in this article is the advantages of trading Forex online.
Market hours
The market is open 5 days a week 24 hours a day as the market consists of the whole world. The market is split into four markets; New York, London, Tokyo and Sidney. They are open at various times throughout the days; it means when the London market close is the New York market still open; when the New York market close the Tokyo market will open and an hour later will the Sidney market open. The Tokyo market will close an hour earlier than the Sidney market; when the Sidney market closes the London market will open again.
Leverage
The brokers offer the traders to trade with leverage; it means that the traders with a small amount of money can trade with a larger amount. If a broker offer a leverage of 50:1 the traders can trade like they have 50 times more cash than they actually have. If a trader has 200 Euro and trade with a leverage of 50:1 he will have a monetary amount of 50 times 200 Euro which is 10.000 Euro.
Low transaction cost
The brokers offer low or no transaction cost as the transaction cost is built into the prices. It is termed as the spread between the buy and sell price. An example is the most traded currency pairs the EUR/USD; the spread is at some brokers 2 pips. It means the traders first have to earn 2 pips before they gain a profit on a EUR/USD trade. Another example is the currency pair GBP/USD where the spread is 4 pips at a lot of brokers. It means the traders first have to earn 4 pips before they gain a profit on a GBP/USD trade. As the examples illustrates is the spread depending on the currency pair and properly one of the reasons the EUR/USD is the most traded currency pairs.
A Further description of a broker and how to review a broker is on my Forex website under "Selecting a broker is a matter of trust". I hope you will watch the short video on my front page about a simple and user-friendly trading platform and consider the platform as your future trading platform.
Thank you for reading my article.
Article Source: http://EzineArticles.com/?expert=Martin_Grippen
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