tweetmeforexif forex brokers charge no commissions, then how do they make money. how do they charge the traders money based on pip spreads or bid/ask price?
so if forex brokers only make profit on the spread, then that means that the trader isn’t paying the broker anything? and the more a trader trades, the more the broker makes? that true?
| CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. Hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. All information on this web site or any e-book purchased from this web site is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold Forex Platinum Club and any authorized distributors of this information harmless in any and all ways. |
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November 23, 2010
8:43 am
It’s the spread. They just add a couple more pips onto the spread that already exists in the market, usually between 1 and 4 pips. So really there is a commission, it’s just built inot the price.
November 23, 2010
9:26 am
There is no commission. They make their money on the spread. When you are dealing with a forex firm, they are not brokers taking your order to the market, like with stocks. They are dealers; they are the market. They quote prices at a level where half their customers will buy at the ask and half their customers will sell at the bid. They take the pips in the middle of each deal. OK. It never works out exactly half and half, so there is some risk and if there is a sudden move, they do get stuck with some exposure, but they get it close enough to keep profitable.
November 23, 2010
9:28 am
Actually, the spread is not how brokers make there money. The broker dealers make their money by taking the customers trade and will make money on their losses. There is a big misconception about this topic and should be researched throughly.