The majority of the Forex brokers do not charge commissions. They are remunerated by revenues from their activities as currency dealers, including earnings from buying, selling, interest on deposited funds, converting and holding currencies, and rollover fees.
If you think that, because Forex brokers do not charge commissions, they are working for free, you need to go back to Forex school. Forex brokers make their money from you, by selling you currency at one price and buying it back from you at a lower one. The difference in the prices is known as the spread and it can mount in a hurry. How can you determine a spread?
Understanding The Spread
You may have thought a pip meant is a fruit seed, and you would have been right. But in the 21st century, the pip is far more widely known as the smallest monetary increment, usually one one-hundredth of a percent. On the Forex market, currencies are priced to the fourth decimal place, and that fourth decimal pace is thepip. Its also known as a basis point.
Forex brokers make their livings in pips. The number of pips they charge per trade is known as their spread. Some Forex brokers charge the same spread no...
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