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Even though most forex brokers enlist commission-free trades to be one of the benefits that they offer their clients, what this really means can be potentially misleading. If you are a forex trader, it is important to understand what commission-free means its proper context to avoid losing money due to a misunderstanding when it comes to the pricing of the currencies. If you want more info about forex trading Malaysia go ahead and visit http://teletrade.my/ now!
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Where Is the Commission in Forex Trading
Malaysia Brought to you by: http://teletrade.my/
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
Even though most forex brokers enlist commission-free trades to be one of the benefits that they offer their clients, what this really means can be potentially misleading.
If you are a forex trader, it is important to understand what commission-free means its proper context to avoid losing money due to a misunderstanding when it comes to the pricing of the currencies. During Forex trading in Malaysia, the stock market that you will be working with is most likely going to charge you a commission on every trade.
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
This is how the forex brokers earn a profit and also maintain the resources that are required for constant market liquidity.
This implies that forex trading is not commission-free as most brokers claim. It is not completely free to trade in the forex market but the commissions are priced in a different format.
On the stock market, you are free to trade stocks from any company as long as it is publicly traded.
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
Since the brokers are not so concerned about the companies you are trading with, they usually have a flat fee commission for buying as well as selling stock.
But in the currency market, the money that you will be charged for trading a certain currency pair is linked to the liquidity as well as market volume for that particular currency pair. If the market volume is lower, you will be end up paying more.
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
Instead of a commission, the forex market has something called a spread which refers to the small difference between the buying and selling price of a currency pair that a broker prices.
Forex traders are usually concerned about the 1/100th of a cent or the fourth decimal place that is known as a price interest point or commonly referred to as a pip. The forex broker determines the number of pips in order to separate the buy prices from sell prices for a currency pair.
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
When you start trading, you will need to gain a predetermined number of pips to be able to break even.
Some popular as well as highly traded currency pairs may have spreads that are as low as one or two pips. The less popular and less traded currency pairs may have spreads that may be twenty five pips and over.
When designing your strategy for a certain currency pair, you should make sure that the spread is included.
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
If the spread is too high, you might be required to maintain an open trade for a considerably long time before reaching the break-even point.
Due to this, many popular currency pairs, for instance the EUR/USD, are common day trading strategies whereby open trades do not last for so long.
This is because the spread is low and it does not require much time for an open position to be profitable especially if the market is in the right direction.
Where Is the Commission in Forex
Trading Malaysia
www. teletrade.my
If you want more info about forex trading Malaysia go ahead and visit Teletrade now!
Where Is the Commission in Forex Trading
Malaysia Brought to you by: http://teletrade.my/
