Where is the commission in forex trading?
The Forex trader should know that the broker takes a commission. It’s not a big one, as far as I know. But it’s affordable. My friend is a Forex broker and he is doing very well. At first I was skeptical about all this Forex nonsense. I thought it was a scam, or something like that. I just couldn’t believe you can make money from this. But my friend, being a broker, advised me on searching more information about it. I’ve read many articles, much information about everything related to Forex, including forex brokers. Now I can say that I’m pretty convinced that this is not a scam and I wish to get involved in it and try to make some profit. With the help of my friend, of course.
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 as per the customer’s instructions. For providing this service, the broker is paid a commission when the customer buys and sells the tradable instrument.
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 as per the customer’s instructions. For providing this service, the broker is paid a commission when the customer buys and sells the tradable instrument. 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. Unlike brokers, dealers assume market risk by serving as a counterparty to the investor’s trade. They do not charge commission; instead, they make their money through the bid-ask spread. 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. Every single penny gain is pure profit to the investor.
