From Fasar Khan Wide spreads result in higher asking prices, meaning you pay more when you buy, and lower bidding prices, meaning you get less when you sell leading to a loss on your part and a gain by the broker. This is where brokers get their money and makes it harder for you to make gains. However, Forex brokers don’t usually earn the full spread using this method, most lose gains when they hedge client positions. This spread is helpful in compensating the market maker from the time of your trade to when the broker’s net exposure is hedged. The Forex broker’s net exposure when hedged could be an entirely different value. These spreads will affect the return on your trading strategy and should be taken into great consideration when trading. Your interest as a Forex trader is to ask low and bid high, similar to stock trading but…

July 16th, 2010
Money maker
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