One critical concept in Forex trading is liquidity. The term ‘liquidity’ is thrown around a lot, but its understanding remains elusive to many, especially beginners. The next sections will explore the concept of liquidity, its role in the Forex market, and why every Forex trader needs to ...
The Ask price is always higher than the Bid price, so initially every trade starts at a loss. Spread in forex is the difference between the Ask and the Bid prices. This price difference is where the banks, brokers and dealers make their profits, in addition to commissions charged, if ...
Taking advantage of a longer time frame, the swing trader will sometimes hold positions for a couple of hours—maybe even days or longer—in order to call a turn in the market. Unlike a day trader, the swing trader is looking to profit from an entry into the market, hoping the change ...
Many people are interested in forex trading because it offers something other financial instruments often can't—access to significantly higher leverage. While the word "leverage" is tossed around frequently, its true meaning, mechanics, and direct influence on a trader's performance remain a mystery...
What Is a Real-Life Example of Scalping? In one of my recent trades, I was watching a stock with high liquidity and sharp price movements. The stock had just experienced a breakout, and I saw an opportunity to jump in. Using my trading tools, I identified a strong support level and en...
Money markets are meant for short-term lending and borrowing, usually for a year or less. It’s like a fast lane where businesses, governments, andfinancial institutionscan meet their quick funding needs. Thus, it is important forliquiditymanagement. These markets are known for their high liquid...
In most cases, the brokerage will liquidate on its own without needing SIPC intervention. In addition, brokerage firms are required to keep customer funds in accounts separate from their own. They must also have a certain amount of liquidity on hand, thus allowing them to cover funds in these...
Scalpers can choose to operate across a range of financial markets includingstocksandcryptocurrencies. However, the forex markets are a particularly popular choice due to the high levels ofliquidity. Higher liquidity can keep costs down by narrowingspreads. It also means that traders can nip in and...
in the vast majority of cases a more competitive trade can be delivered. This process is entirely seamless for spreadbets as the technology works behind the scenes to search out better prices and clients are presented with the best quote from all the underlying liquidity venues, with the firm ...
they can create a fragmented market where liquidity is spread across multiple venues. This fragmentation can result in less efficient pricing because liquidity may not be concentrated in one place. In other words, it might be harder to property measure how many shares are available, so the pricin...