What is Spread in forex market?

This is a question that most of the beginners ask, the answer is here. Spread is actually a difference between the buying and selling price. When you are going to buy the Eur/Usd currency pair, then the buy price will be different from selling price, that difference is actually spread. 

Some brokers offer fixed spread and most of the brokers offer floating spreads. If the spread is fixed then it is good, because it will not change while market fluctuates, but if the spread is floating then it will be very much difficult for some kind of traders who think that they will earn with small accounts, their accounts may wipe out. 

Spread between buying and selling price is 0.9 pips

Floating spread starts from 0 pips, but sometimes it widen up to 70 pips, that is enough to wipe out a small account, if there is a trade opened in an account and market fluctuate or any kind of rumor hover in market. Just like some times ago, it happened with Usd/Chf pair, at that time market fall terribly bad and it caused bankruptcy for so many institutions. So, if institutions may bankrupt then small traders will not sustain in market. You are thinking that if the market fall, then what is the matter of spread in this? Ok, let me explain you. When the rumor hover about swiss franc at that time, then suddenly the traders saw wide spread in their meta trader, and most of the brokers stopped trading in this pair, this is practice of market that when they see that there might be a sudden fluctuation in market, then they stop trading that currency pair, as I saw this thing in Russian Ruble, Swiss Franc and Britain Pound cases.

So, whenever you choose the forex broker, then you need to see that what kind of spread they are offering, what is spread, if fixed or floating? What meta trader they are using? I hope you will understand these terms when you get familiar with market.

What a trader do in forex market?

For some beginners in forex market, this is the big question that what a trader do in forex market, if you are heading to join forex market and start your career as forex trader then it is the most basic thing that you need to understand what a forex trader do in forex market. But if you are familiar with stock market then you will be familiar with forex market too. But if you are not familiar with stock market then you need to understand what's inside forex market.

Forex Market Chart

Actually, in forex market, a trader do three things that are most common. One thing is buying, second thing is selling and third thing is exchange of currencies at current or determined market rates. The big market traders or you can say "the market runner" are the world's largest banks. Central bank of country do not intervene into this market, this market is controlled by large international banks, they buy in huge volume and then we see market collapse and when they buy in same volume then we see market hike. 

What a trader do in forex market. A sensible and sharp trader always watch the market and its logarithm, He / She see market charts, the history of market, the expected movement of market so that he put an order whether buy or sell, and when market goes in favor of the trader then the trader earn money, the profit depends upon the volume of trade the trader opens. If you want to be a forex trader then you will have to see several aspects and a lot of work. 

What is Forex?

Well, there are hundred of thousand websites related to forex trading and forex information, this one is also for forex trading and its material, so what is new in this blog? why you shall keep reading and subscribe this blog? 

The answer is, I am a very old forex trader and I know so many things and some secrets of forex trading, that's why I think that I can give you some good information related to forex trading and forex market. In this post, I am going to tell you about the initial information about forex trading.

Basically, the word forex stands for "Foreign Exchange", but we know it as forex, so that's why it has become popular on internet. In ancient time, this business was done by manual dealing, in which some people come USA and they used their own currency, (it is a story that I heard somewhere).

Forex trading rules

They did not have american dollar and they were european, so they need to spend their vacations in america, that's why they decided to change the money to other currency and that was the beginning of this lucrative business. After all that dealing, the people involved in this business set the price with dollar against the counter currency, and then this business started between some businessman, and after the revolution of technology and access to internet, this limited business rose up and now it is more than three trillion US Dollars a day business in the world, if we call it the world's biggest business market, then it will be true.

This is just a basic information that I knew about forex. Nowadays a lot of people working and trading in forex market day and night. There are some sessions that make this business very much lucrative and attractive and that's why the traders in this market are rising day by day.

I hope you will like this post, I will wait for your comment, please comment below, if it helps you.