When looking for a profitable business capable of consistently generating substantial daily income, trading, and, more specifically, Forex is undoubtedly one of the best investments you should turn to right now. Indeed, nowadays, technological advances have made it easier to access the financial market so that it is possible to become a trader in a few clicks from home and start making your first earnings without further delay. The financial market sector thus brings together a whole series of profitable activities.
What is a Forex broker?
A Forex broker is simply an intermediary between you and the foreign exchange market, or more precisely, between the trader and the interbank market. The term interbank defines a network of banks, the Forex broker allowing traders to benefit from the best buying and selling rates provided by the banks they are in contact with. Forex brokers, or brokers, enable traders to access the market simply by opening a trading account quickly.
This is a relatively simple procedure requiring simple identity verification. Once the Forex broker team validates the trading account, it is possible to take full advantage of the market, invest, earn money, and withdraw earnings. Forex brokers also allow their traders to get their hands on the markets through demo trading accounts. These fictitious accounts do not require a few days’ validation processes and will enable them to practice trading with a virtual portfolio before investing their real money.
However, at the forefront of these activities is Forex, which is unequivocally the best financial market, which is the most beneficial. But before you think about your next Forex cash inflow, you should already think about finding the best Forex broker to get you there.
Selecting a Forex broker
There are dozens of different Forex brokers. They are suitable for beginners, intermediate traders, and expert traders. Select Forex broker carefully since it’s essential to get started in the world of Forex trading properly. The criteria for selection goes from regulation compliance, leverage, customer support efficiency to fees and spreads.
The spread is a kind of commission and the way for brokers to earn for the brokerage services rendered to traders. Once the trade is open on the Forex market, the broker offers a price slightly different from the best market price obtained. This price difference is the spread on the interbank network, a transparent commission that varies according to the brokers. We advise traders to consult the comparison of Forex spread.
What is leverage?
Leverage is one of the relatively interesting features that can be found in Forex brokerage websites. The use of leverage allows traders to obtain a greater investment capacity. Leverage varies depending on trading account types and brokers. Some online brokers will offer a maximum leverage of 10: 1. But some will allow leverage of 100: 1 or even 500: 1.
Difference between broker market maker and no dealing desk
There are 2 types of brokers:
- The NO dealing desk is intermediaries between the trader (you) and the interbank market. All your transactions are automatically placed on the market. There are two types of no dealing desk broker, STP (Straight Through Process) and ECN (Electronic Communication Network)
- The dealing desk (or market maker) allows their clients to trade on the currency market (Forex), not charge you a commission but offer you a spread. The spread is the difference between the purchase price (ask) and the sale price (bid). The advantage for a trader to trade with a spread is that there is no commission. The downside is in terms of timing. The market maker) will not allow you, once on the market, to exit as long as the price remains in a specific price range.