Retail Broker companies

What Is a Retail Broker Company?

Retail broker companies which acts as mediator or middleman between huge investment banks and Small investors these companies lend small investors big amounts of money to help them trade at forex market.

As small investors we need Retail Broker companies for two reasons

(1)

 The great value of contract. Every contract can reach to 1000000 Banknote, and this is a large amount, also the investor needs to buy a lot of contracts 

(2)

Small trading of this market. For example one dollar needs to move 100 pips to increase only 1 cent.

How can retail broker companies make profit?

Retail broker companies can make profit through the price difference between ask and bid.

What are ask, bid and spread?

.Ask: The ask price is the price at which buying processes are done.

Bid: The bid price is the price at which selling processes are done.

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Buying and selling processes

What is the meaning of  Base currency?

As we know in foreign exchange market,  we have currency pair in which currencies are traded in pairs. The base currency  is The first currency within the combine.  In other words we can say that The base currency is that the currency against that exchange rates square measure usually quoted during a given country.

Ex: CHF/JPY, the CHF is the base currency when we buy CHF we sell JPY at the same time.

we can divide trading in "Foreign Exchange Market  into 2 main processes:

Buying Long

 Our major concern is the price increasing of Base currency.

Entry Rule is buying the base currency.

Exit Rule is selling the base currency.

If we want to enter buying process of USD/JPY, at first we should buy USD then we should sell JPY .If we want to get a profit we should sell USD by buying JPY.

Selling Short

 Our major concern is the price increasing of Base currency.

Entry Rule is selling the base currency .

Exit Rule is to Buyback the base currency

If we want to enter selling process of Euro \ USD, at first we should sell Euro then we should buy USD .if we want to Get a profit we should buy Euro and exchange it  by USD .

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pair trading

?What is pair trading 

pair trading is a kind of trading in which we compare between the relative worth of a currency units in the interchange market. In other words we compare the counter currency and the base currency or group action currency

.The most listed currency try is that the relation of the monetary unit against the US dollar 

(There are 28 pairs of currency (=8x7)/2 

?what are the Majors

 .They are the most traded currency pairs within the world

NZD\USD	NZD\JPY	GBP\ JPY	EUR\GBP	CHF\JPY	CAD\CHF	AUD \USD
	USD\JPY	GBP\NZD	EUR\JPY	EUR\CHF	CAD\ JPY	AUD \CHF
		GBP\ USD	EUR\NZD	GBP\CHF	Eur\ CAD	AUD \JPY
			EUR\USD	NZD\CAD	CAD\GBP	AUD\NZD
				USD\CHF	USD\CAD	AUD \USD
						Euro\ AUD
						GBp\AUD

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