Forex Broker Guide
  1. Forex Broker Guide: Introduction
  2. Forex Broker Guide: Broker Basics
  3. Forex Broker Guide: Platforms And Account Details
  4. Forex Broker Guide: Broker Support
  5. Forex Broker Guide: Advanced Features
  6. Forex Broker Guide: Conclusion

Forex Broker Guide: Introduction

As of January 2012, foreign exchange market accounts for more than $4 trillion in average traded daily value, making it the largest financial market in the world. No central marketplace exists for the forex market; rather, traders must conduct their trading activities through forex brokers. An increasing number of forex brokers are available, and traders should take the time to research, evaluate and compare options to find the broker that best fits their needs. This guide will explore the various important considerations when choosing a broker in today's competitive forex marketplace. (In this article we'll look at five considerations when choosing a forex broker. For more, see 5 Tips For Selecting A Forex Broker.)

Forex 101
What is Forex? Forex, often abbreviated FX, is the market where currencies are traded. It is the largest, most liquid financial market in the world, and trades 24 hours a day, five and a half days per week.
What are currency pairs? All forex trades involve the simultaneous buying of one currency and selling of another. In the popular currency pair EUR/USD (euro/U.S. Dollar), for example, the first currency (EUR) is called the base currency; the second (USD) is called the quote currency. When a trader buys a currency pair, he or she buys the base currency and sells the quote currency.
What are the major currency pairs? Four forex pairs are the most heavily traded in the forex market. They are called the majors and include Euro/U.S. dollar (EUR/USD); U.S. dollar/Japanese yen (USD/JPY); U.S. dollar/Swiss franc (USD/CHF); and the British pound/U.S. dollar (GBP/USD). The majors trade under the greatest volume and liquidity.
Why do forex traders need brokers? A forex broker acts as an intermediary between the two parties involved in a forex transaction: the buyer and the seller. While it is possible to buy or sell currencies directly through banks and other institutions, brokers offer services that typically benefit traders such as charting platforms, analysis tools, and access to leverage.
Forex Broker Guide: Broker Basics

  1. Forex Broker Guide: Introduction
  2. Forex Broker Guide: Broker Basics
  3. Forex Broker Guide: Platforms And Account Details
  4. Forex Broker Guide: Broker Support
  5. Forex Broker Guide: Advanced Features
  6. Forex Broker Guide: Conclusion
  1. Transfer Risk

    The risk that a local currency cannot be converted into the currency ...

    See LIBOR
  3. WM/Reuters Benchmark Rates

    Spot and forward foreign exchange rates that are used as standard ...
  4. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  5. Indirect Quote

    A currency quotation in the foreign exchange markets that expresses ...
  6. Competitive Devaluation

    A series of sudden currency depreciations that nations may resort ...
  1. What are the goals of covered interest arbitrage?

    The goals of covered interest arbitrage include enabling investors to trade volatile currency pairs without risk as well ... Read Full Answer >>
  2. Will technology ever disrupt the role of the custodian bank?

    Custodian banks, along with other financial institutions that hold custodian accounts, are likely to be disrupted but not ... Read Full Answer >>
  3. How do I close a long position in forex?

    Closing a long position in forex trading depends on whether you are using a broker operating under U.S. trading regulations. In ... Read Full Answer >>
  4. Where did the term 'pip' in currency exchange come from?

    The term pip is an acronym for percentage in point or price interest point. It measures a unit of change within a pair of ... Read Full Answer >>
  5. How do changes in national interest rates affect a currency's value and exchange ...

    All other factors being equal, higher interest rates in a country increase the value of that country's currency relative ... Read Full Answer >>
  6. What is the difference between pips, points, and ticks?

    Point, tick and pip are terms used to describe price changes in the stock market and other markets. While traders and analysts ... Read Full Answer >>

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