Forex foreign currency trading program

Self-regulation provides very effective control over the market because participants in FX must both compete and cooperate with each other. Furthermore, reputable retail FX dealers in the U. The FX market is different from other markets in some other key ways that are sure to raise eyebrows. USD is going to spiral downward? Feel free to short the pair at will. Before we leave you with the impression that FX is the Wild West of finance, we should note that this is the most liquid and fluid market in the world.

It trades 24 hours a day, from 5 p. EST Friday, and it rarely has any gaps in price. Where Is the Commission in Forex Trading? Investors who trade stocks, futures or options typically use a broker, who acts as an agent in the transaction. The broker takes the order to an exchange and attempts to execute it per the customer’s instructions. The broker is paid a commission when the customer buys and sells the tradable instrument for providing this service. The FX market does not have commissions.

Unlike exchange-based markets, FX is a principals-only market. FX firms are dealers, not brokers. This is a critical distinction that all investors must understand. In FX, the investor cannot attempt to buy on the bid or sell at the offer like in exchange-based markets.

On the other hand, once the price clears the cost of the spread, there are no additional fees or commissions. What Is a Pip in Forex Trading? Pip stands for “percentage in point” and is the smallest increment of trade in FX. In the FX market, prices are quoted to the fourth decimal point. What Are You Really Selling or Buying in the Currency Market? The retail FX market is purely a speculative market. No physical exchange of currencies ever takes place.