Sunday, June 18, 2006
Learn Online Forex Trading - Whats the broker Commission?
Learn Online Forex Trading - What is the broker commission in forex trading?
Welcome to another week in the world of forex trading..As you know the forex market opens on Sunday at 2 PM EST with opening of Aussie and Kiwi markets.
Now many of you know that their are broker commissions associated with the trades you make in stocks or futures or commodity trading. The commissions vary between $7 to $20 per trade depending on the broker you choose...
However it is said that in online forex trading there are no broker commissions..Is it true???
Not entirely..I agree there are no DIRECT COMMISSIONS associated. So, how do they brokers earn?? They earn on the basis of SPREADS between bid and ask price of a currency pair.
How?? let me give you an example - Each currency pair has a bid and ask price. Like lets say that EUR/USD has a
Bid price of - 1.3000
Ask Price of - 1.3003
So, if you have to buy the EUR you will have to $1.3003 for each EURO. But, if you are selling EUR, you will get 1.3000..So, as you see there is a gap of 3 PIPS between buy and sell price.
(What is PIPS in forex trading?? Please read my previos article to understand it)
So, this gap, more called as SPREAD is the broker commission. So, if you have a mini account you are paying $3 per trade to your broker for forex trading EUR/USD and if you have a major account, you are paying $30.
The spread varies from currency pair to currency pair, however all the currency pais that have USD as one currency have the spread ranging from 3 PIPs to 5 PIPs
So, when you are opening online forex trading account don't forget to check the broker spread.
Now, how is the market looking right now??
I just now analysed the USD/CHF currency pair on a 30 min chart. I feel it is going to go upatleast till 1.2350 to make a double top as it has bounced from 200 EMA. There is a strong resistance at 1.2350 levels.
However if it breaks the level, the next stop could be 1.2410 which is also the 38.2 fib level on daily chart. Also on 30 min chart the MACDs are pointing up..So, its a buy call from my side...BUT..
But I am not going to trade since I don't do online forex trading on Sundays because of low liquidity in market. This is my trading rule..
So, thats all in today's article..Come back again tomorrow to learn more in online forex trading.
Welcome to another week in the world of forex trading..As you know the forex market opens on Sunday at 2 PM EST with opening of Aussie and Kiwi markets.
Now many of you know that their are broker commissions associated with the trades you make in stocks or futures or commodity trading. The commissions vary between $7 to $20 per trade depending on the broker you choose...
However it is said that in online forex trading there are no broker commissions..Is it true???
Not entirely..I agree there are no DIRECT COMMISSIONS associated. So, how do they brokers earn?? They earn on the basis of SPREADS between bid and ask price of a currency pair.
How?? let me give you an example - Each currency pair has a bid and ask price. Like lets say that EUR/USD has a
Bid price of - 1.3000
Ask Price of - 1.3003
So, if you have to buy the EUR you will have to $1.3003 for each EURO. But, if you are selling EUR, you will get 1.3000..So, as you see there is a gap of 3 PIPS between buy and sell price.
(What is PIPS in forex trading?? Please read my previos article to understand it)
So, this gap, more called as SPREAD is the broker commission. So, if you have a mini account you are paying $3 per trade to your broker for forex trading EUR/USD and if you have a major account, you are paying $30.
The spread varies from currency pair to currency pair, however all the currency pais that have USD as one currency have the spread ranging from 3 PIPs to 5 PIPs
So, when you are opening online forex trading account don't forget to check the broker spread.
Now, how is the market looking right now??
I just now analysed the USD/CHF currency pair on a 30 min chart. I feel it is going to go upatleast till 1.2350 to make a double top as it has bounced from 200 EMA. There is a strong resistance at 1.2350 levels.
However if it breaks the level, the next stop could be 1.2410 which is also the 38.2 fib level on daily chart. Also on 30 min chart the MACDs are pointing up..So, its a buy call from my side...BUT..
But I am not going to trade since I don't do online forex trading on Sundays because of low liquidity in market. This is my trading rule..
So, thats all in today's article..Come back again tomorrow to learn more in online forex trading.
