How Much A Forex Broker Makes From A Single Account?

By Hass67

When you open a forex trading account, you will be told by your forex broker that there are no commissions involved in currency trading. Most of the new traders take their broker words as true. They think that the cost of trading is minimal.

Forex brokers are also known as FCMs (Futures Commission Merchants). They make profits through the bid/ask spread they charge their clients for each currency pairs. This bid/ask spread is your trading cost and profit for your broker.

Lets take a practical example to make it clear how trading costs can effect your trading. Bid/offer spreads are usually overlooked by retail traders as the price they have to pay for trading. So lets calculate what your cost of trading can be annually.

Suppose you are day trading. 5 times every day, taking away the weekends, when you cant trade, there are 250 trading days for you.

As a day trader, you will open and close each trading position before the end of each trading day. That means each position is being traded 2 times, once when you open the trade and once when you close the trade.

Suppose; your account size is $ 50,000. You are using a leverage of only 4. So this $50,000 will control (50,000) (4) = $200,000.

Your Annual Turnover should be; (5) (250) (2)(200,000)= $500 Million. Isnt it huge! Now lets calculate how much FCM will make and what your spread cost is. Spread Cost= (Annual Turnover) (spread)/2.

Suppose further, the bid/offer spread charged by the broker is 3 pips. 3 Pips Spread Cost= (500M) (0.0003)/2= $75,000.

Suppose, the spread offered by the broker is only 2 pips. 2 Pip Spread Cost= (500M) (0.0002)/2= $50,000.

You can see now, the cost of trading with a 3 pips spread versus a 2 pips is $25,000. Huge for you, this is 50% of your account equity. You see now that a 1 pip difference can result in $25,000 more as trading cost for you.

You will need to make a profit of $75,000 simply to break even with a 3 pips spread. Trading costs are one of the primary reasons most active traders fail in the long run. - 23210

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading and swing trading stocks and currencies. Learn Forex Nitty Gritty. Read about Trend Forex System. Try Netpicks Forex Signal Service.

Learn Forex Essentials Through Forex Trading Courses!

By Bart Icles

If you're planning to invest in the foreign exchange market and interested in learning more about it, but aren't sure where to look, the best way to do this is by going online. There are many organizations and expert traders offering their services that may provide you with answers to all your questions, and help you in one way or another to becoming a successful Forex trader in the near future. Before committing to a Forex trading course, make sure that it's one that will provide you with all the essential information to make your trading a vial business venture.

Beware of websites that offer Forex training that promises to make you earn huge profits within a relatively short period of time. Instead, look for a training program that focuses on the basics of the trading, gives information about the market itself, its trade policies and practices, and how to manage your finances. Although profit is the an important factor in any trading business, it's how you go about doing it that counts; learning all you can about Forex trading and the foreign exchange market is a good foundation to have in ensuring that all your efforts produce positive end results.

Even if you already have a basic knowledge of foreign exchange, its still best to consider taking an online Forex training course that can give you additional information to help boost your chances of success in the foreign exchange market. Since Forex trading is a very dynamic market that is easily influenced upon by many socio-economic and political factors of the world's countries, having access to any information regarding this is surely a must for every Forex trader. There are also Forex trading courses that offer a more thorough study of basic foreign currency trading (e.g. foreign currency pairing, USD - EURO currencies).

Look for Forex trading courses within your allocated budget and not a penny more. Since the purpose of going into currency trading is to earn profits to supplement your current income, paying for an overcharged Forex trading course would simply defeat this. With all the information available today in the Internet, learning Forex is as simple as buying an ebook, cd or dvd course, or enrolling in an online class.

You may even come across plenty of Forex related websites that offer free information and demos to help you in your quest for learning; do some research of your own and you'll surely be rewarded for your efforts. Budget constraints shouldn't be made a reason for not getting that much wanted education about Foreign exchange market.

Sign up for a Forex training course now and begin your career in Forex trading in the right direction. - 23210

About the Author:

Your forex training software starts with a desire to learn and a drive to become a great trader. Using the best forex training takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Foreclosures versus Pre-foreclosure - Which one Can Make you Richer?

By Susan Wild

Pre-foreclosures properties are homes that are about to go into foreclosure. Some of the best real estate deals are made this way, before they hit the mainstream foreclosure market. Negotiations are usually with the owner directly, who would like to work out a deal before the bank forces them to leave the property.

The market for pre-foreclosures is reaching record levels namely because of the current sub-prime real estate issues and weakening economy. Real estate experts will tell you that investing in pre-foreclosure homes is one of the most prosperous ways to play real estate, and that the timing for great opportunities could not be better then it is now.

Depending on your situation buying a pre-foreclosure home can be an improved method of acquiring property rather then buying at an auction. Auctions more often then not require that you have the necessary cash on hand in order to bid. When buying pre-foreclosure homes, however, you don?t necessarily have to have cash on hand.

The main advantage of a pre-foreclosure is you get to meet the people who's house your interested in acquiring in a less anxious environment then at an auction. With an auction homeowners will usually remain anonymous.

One of the biggest advantages of purchasing a pre-foreclosure over an auction is that you can inspect the property before it goes into auction. At this point the property owner is still living in the home so obviously you want to call on them and take a look around the house to see what kind of condition it is in. If the owner feels you make be able to help them, they may disclose if there are any internal problems with the house (i.e. water damage, electrical issues, etc.). Also if the owner is co-operative and you have enough time it would be advised to get a property inspection done as well.

This allows you to determine how much effort, if any, will be required to repair the house and at what cost. This will eliminate much of the risk and will help you make a better decision about if the property would be a good investment or not.

Hopefully this article articulated some of the advantages that buying pre-foreclosures is a good alternative. All real estate professionals consider this method as one of your best value options when it comes to purchasing a home - 23210

About the Author:

To learn more regarding the top government auction & pre-foreclosures web sites check out government auctions reviews or pre-foreclosures.

Currency exchange is a very common way to get money while you're overseas. Loads of people use currency exchange services at the moment.

By Abby H Naylor

Due to the fact that people think that we now live in a global village, there is very much a feeling that the use of Currency exchange services is redundant. Who needs Currency exchange services when you can use a credit card? After all, everyone has credit cards and debit cards, so why would you need to use a Currency exchange services?

Well Currency exchange services can be an absolute bonus when things go wrong and when you are most in need. But when things go wrong and you are really desperate, Currency exchange services can really be useful. So your son or daughter goes off travelling and everything is going ok, but then disaster strikes. People travelling have a higher risk of losing credit cards.

What can you do? Just suppose that the traveller who is in distress is a member of your family, how can you help them? Well that is where the beauty of Currency exchange services comes into its own. If you use Currency exchange services then this is not a problem.

Currency exchange services can really help someone in his or her hour of need, but they aren't just there for the nasty things, they can also be used for other really nice things.Many people prefer to do business with a transfer of cash, because they distrust giving credit card details out to strangers.

If you have family living abroad it is also a great way to send them money for their birthdays or at Christmas time. You don't have to worry about the money going missing in the post, since you know that they will get it direct using Currency exchange services.

People who have overseas properties use transfers to pay bills overseas and there can be no arguments about money going astray! It is there and you can prove that it was received. Currency exchange services are still used to transport money all over the globe, from the North to the South Poles as well as east to west.

Currency exchange services are also very easy to organise and are not as expensive as you may have previously thought. Plus, the markets are so competitive that you can now send money very cheaply. There isn't much in the way of commissions on Currency exchange services.

Currency exchange services will give you a real sense of comfort, knowing that money can be sent at any time to any place in the world.You can also use Currency exchange services for high end products from overseas, meaning that Currency exchange services really are a great way to manage money from one country to another.

You shouldn't have a problem getting Currency exchange services to cover your financial needs while you're home or away. The Western Union or you bank can help you sort out Currency exchange services and it isn't difficult at all.

You will find that Currency exchange services is a fast and easy way to ensure that you're covered or that you can pay someone quickly. Making Currency exchange services is easy and fast and it's relatively secure because all you need is the bank account number and sort code.

Currency exchange services is becoming one of the most popular ways to get money if you're away on holiday and it's certainly worth while. Research is important though so make sure you understand the process before you do anything with bank details etc.

Currency exchange services is a great way to pay someone some money and is ideal for holidays and trips abroad. Currency exchange services is very popular these days and a lot of people use them to ensure they get their money quickly. - 23210

About the Author:

Writer Abby H Naylor talks about opting for foreign currency exchange services for your time abroad. www.purefx.co.uk has high quailty information on currency exchange, you should definitely be able to get offers that you like.

Things You Should Know About Forex Made Easy

By Chan Boldene

Forex (also known as Foreign Exchange or 4X) is an international exchange market in which currencies are sold and bought, bought and sold, 24 hours a day six days a week. The Forex market that we now know began in the early 1970s, when exchange rates and floating currencies were introduced.

Forex is unique because there are no external controls. With that comes the good and the bad. On the one hand, our societies all seem to be overregulated. On the other hand, the government regulators and private watchdog groups don't think we have enough regulation.

However, many government and private sector regulators want to change this. They feel that an unregulated market is extremely dangerous because people and accounts can be wiped out in minutes by greedy con artists and market manipulators. Probably regulation will occur later rather than sooner. Like any market this large, there are thousands of small and large players involved, and change is painstakingly slow.

It is not easy to manipulate the Forex markets. But investors need to be cautious, however, because the "big boys" can and do manipulate the market when it's convenient for them (and normally according to a fairly obvious schedule). Therefore, it would be wise and prudent to uncover when those times are (holidays or whenever regular Joes and Janes like you and me are able to carve out a little extra time to invest).

Forex is also the largest liquid financial market in the world, with trade reaching between $1 and 1.5 trillion US dollars (USD) daily, every day. Think about that figure. Because it is such a highly liquid and fast-paced market, it is clear that one investor could not significantly affect the price of a major currency.

Liquidity in the markets means that traders or investors can open and close positions within a few seconds (yes, a few seconds!) as there are always willing sellers and buyers.

In Forex, there are four major currency pairs: US Dollar-Japanese Yen (USD/JPY), Euro-US Dollar (EUR/USD), US Dollar-Swiss Franc (USD/CHF), British Pound-US Dollar (GBP/USD). The first currency in the pair is known as the "base" currency. The counter currency is the second half of the pair. The Euro-US Dollar is extremely liquid and is the most traded pair on the exchange.

The main currency pairs are typically traded in 100,000 base units. So, if you were buying EUR/USD at 1.09 you would be paying US Dollars (USD) for Euros as follows: 1.09 X 100,000 units = $109,000 US Dollars for 100,000 Euros. Don't worry, though, you won't need to come up with $109,000 USD to learn this skill. Instead you'll only need a small percentage of that amount, and it's called trading on margin or margin trading. This will be an entirely different lesson. Forex Made Easy is here to assist and we will be answering those questions as they arrive. - 23210

About the Author:

Chan Boldene is a technical writer who enjoys writing about many topics including Forex Made Easy, Chan also enjoys referring others to his close friend's Daily Devotions at Devotions ChopChopsite.