How Forex Brokers Manage Their Risk (C-Book)
You may come across the word "C-Book" in addition to forex brokers who "A-Book" or "B-Book." The term "C-Book" is used to represent "risk management procedures" used by forex brokers and CFD providers that are allegedly different from A-Book and B-Book.
Challenges of A-Book Execution
The A-Book implementation model comes with its own unique challenges. An A-Book forex broker can only earn profits from markups IF the rates at which it trades with the LP are better than the prices at which the broker trades with its customers.
A-Book: How Do Forex Brokers Handle Risk?
While your forex broker will always be your counterparty and take the other side of your trade, it does not imply it has to bear the risk of being on the losing end of the trade and losing money. If the broker does not want to "B-Book" or bear the market risk, a third party can be found and the risk can be transferred to them.
What is a Stop Out Level?
A Forex stop out is when all of a trader's active positions in the foreign exchange market are automatically closed by their broker.
What is Free Margin?
There are two types of margin: "used" and "free." In one of our last sessions, we looked at the Used Margin, which is the sum of all the Required Margin from all open positions. The gap between Equity and Used Margin is called Free Margin.
What is Equity?
Account equity also called equity by some people represent the current worth of your trading account.
What is Used Margin?
To understand what is used margin, it is also useful to understand what Required Margin is. Required Margin is the portion or part of margin needed to open your trade.
What is Margin Trading?
Margin trading in the forex market is the process of making a good faith deposit with a broker in order to open and maintain positions in one or more currencies. Margin is not a cost or a fee, but it is a portion of the customer's account balance that is set aside in order trade.
Why Trade Forex: Forex vs. Futures
It's not simply the stock market that's causing problems. Similar to its benefits over stocks, the forex market has a number of advantages over the futures market.
Why Trade Forex: Forex vs. Stocks
There are dozens of currencies traded in forex, but most of the market participants focus on the seven primary pairs. Isn't it much easier to maintain track of seven major pairs than thousands of stocks?
Why Trade Forex: Advantages Of Forex Trading
There are many advantages and benefits to trading forex.
Know Your Forex History!
This stabilized the exchange rate for a while, but as the world's major economies began to change and grow at different rates, the rules of the system soon became outdated and limited.
Forex Market Players
It is important to understand the nature of the Forex spot market and to understand who the key players in the Forex market are.
Forex Market Structure
Stock exchanges are forced by professionals to fulfill their clients' orders. Suppose the number of sellers suddenly exceeds the number of buyers. A specialist forced to fulfill a customer's order, in this case the seller, has a stack of inventory that cannot be sold to the buyer.
Best Days of the Week to Trade Forex
Now we’ve learned that the London session is the busiest session, but there are also certain days of the week when all markets tend to move more. Know when is the best days of the week to execute a trade.
Best Times of Day to Trade Forex
When do you choose the best time to trade forex? It is logical to choose while the two sessions overlap. If you thought so, you would be half right. Let's discuss some characteristics to see why the two sessions overlap.
When Can You Trade Forex: New York Session
When European traders return from lunch break, the US session starts at 8:00 AM EST when traders start walking to their offices. As in Asia and Europe, there is one major financial center the market is paying attention to in the US session.
When Can You Trade Forex: London Session
Their European colleagues are just starting their day, just as Asian market participants are closing stores. There are several financial centers throughout Europe, but market participants are focusing more on London.
When Can You Trade Forex: Tokyo Session
For traders residing in Muritz ("USA"), trading days starts on Sunday evening at 5:00 pm ET (10:00 pm GMT). However, liquidity won't really come in until Tokyo reopens in a few hours. When the Tokyo session starts at 12:00 GMT, currency trading starts in Asia. The Tokyo Session is sometimes referred to as the Asian Session.
Forex Trading Sessions
Now that you've learned what Forex is, why you should trade it, and who makes up the Forex market, it's time to figure out when a trading session is right for you to trade. It's time to see the differences between Forex trading sessions.
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