Forex commissions on the international foreign exchange market
The international foreign exchange market Forex is a trading space where currencies are bought and sold. To date, the foreign exchange market is one of the most widespread and profitable financial markets. The volume of operations performed is approximately $4 trillion per day. Market participants include banks, financial companies, as well as individuals – traders. The advantage of the Forex market is that it differs from other financial playgrounds as it operates 24 hours a day, 5 days a week, giving you a consistent opportunity to make profits. A trader working in Forex trading has the opportunity to make huge sums of money by investing meager funds. Although the trader profits from Forex, he also pays a commission. Forex market commission is a fee charged for managing trades. This can be a commission for buying or selling transactions in currencies. The main commission in Forex is the spread. Spread is the difference between buying and selling a currency. In addition, there is an ongoing commission that is charged daily while the trader’s trade remains open. There are commissions that the trader pays for, for example, withdrawing money or opening an order. As a rule, the Forex commission is a small amount of money, however, if a trader works in a short time and opens and closes several trades per day, the commission is slightly higher.
What is the commission value on the Forex market:
Currency pair liquidity. For example, popular currency pairs have a much lower trading commission than Forex. Most of the time, commission values can vary greatly between classic and exotic currency pairs. The size of the running process also makes sense. Do a very small operation or, conversely, a large one – the fee will be much higher. The market situation is of great importance for the amount of the Forex commission. In the period when macroeconomic news is released, forecasts of experienced traders – the size of the commission is growing. Daily or seasonal low liquidity also plays a role – the commission also increases.
Types of Forex Commissions or Spreads:
– There are a number of types of Forex commissions or spreads.
The spread can be fixed or variable, standard or for mini accounts. A fixed spread is a fee that remains unchanged under all market conditions. Floating Spread – is a fee of 2 points in case of a stable market, but it can be increased to 40-50 points if there are unforeseen events in the market area. A trader choosing a Forex broker to trade in the international foreign exchange market needs to consider the size of the spread offered. The trader should try to avoid the brokers who promise to take all the costs since the broker’s profit is made from the spread that the traders pay as a fee for executing the trades. The trader should give preference to this broker, which provides an opportunity to work in the market without additional commissions, using the spread as payment for completed deals. Before opening a trading account with a Forex company, make an analysis among the most suitable Forex representatives.
What is a trailing stop in the Forex market?
The trailing stop is its main task, making an automatic adjustment to the open position with a variable that shifts the stop-loss level depending on the price movement.
Working principle: the client opens an up trade and sets a distance from the current price in points to set the trailing stop. When the price goes up, the stop moves automatically to keep the same distance between it and the price. If the price falls, the stop will remain in place with no movement. This way the trader has a good chance of making the maximum profit without having to place a take profit order. In addition, the trailing stop order limits the loss.
As if the trader opened a buy trade at the price of 1.3400 and moved the floating stop back by fifty pips, i.e. H. at 1.3350.
In case the price moves up and crossed the 1.3400 level, the moving stop moves automatically to maintain the 50-point gap between it and the price. That means if the price touches the 1370 level, the stop will move to 1320. If the price moves down, the transaction prices will not change.