Financial return for the services provided by brokerage firms

You can find the opportunity available to trade a commodity worth more than what they pay in money a dozen times, and that becomes you're capable of maintaining the gross profit from trading the full and like you own the item actually is a great opportunity, no doubt.How are the people who complain of lack of capital that they have which prevents them from going into the field of trade?Many right ...?!!Work in the trading margin, the last interest is capital ..!!It is at your disposal and the amounts of simple you can get into the field of trading and wider doors ..!!The work on a margin is a wonderful opportunity not many people know already exist.But you might be wondering ..Why do I get for all these facilities?What Tstvidh brokerage firms when they allow me to trade a commodity worth more than 200 times what I pay and be complete without profit to me that it is shared?To answer this question we say:Benefit brokerage firms in the currency market from its customers in four major forms:Commissions.Simple margin between selling price and the purchase price Spread.Interest.Fees.And we'll talk in detail about every form.
 CommissionsIn the past, most brokerage firms take a fixed commission on each lot you sell or buy it, regardless of the outcome of the deal was a profit or loss.For example: if you purchase a lot of euros and then sold him was the result of this deal is equivalent to a profit of $ 500 was deducted from the profit the company $ 20, for example, every lot you have to trade him a commission, even if you have to trade B-2 lot of $ 20 will be deducted from your profit.If you purchase a lot of pounds and then sold him was the result of this transaction loss of $ 300 to add the company to deposit $ 20 for each lot you have to trade it deducted from your account as commission to them. And your loss will total $ 320 for that transaction.Valamolp take regardless of the outcome of the deal was a profit or loss.But do not worry ..The vast majority of currency brokerage firms now do not take commissions at all ..!!And the encouragement to its customers and as a result of competition with other companies.So now you can trade any number of any of the lute without being deducted commissions in return.In spite of the presence of brokerage firms that are still taking commissions on the customers, we do not really find any justification for dealing with such companies ..!!There are hundreds of giant corporations that do not cost customers any commissions, so why deal with if the other?!!That is why the brokerage firms currently only in return you get from other forms.
 SpreadWhich is the main source of income for the brokerage firms.Do you ever go to a money exchangers to replace the local currency and get a dollar, for example?Suppose that you have CHF and I wanted to buy dollars from a money exchangers What's going on?When you go to money changers and ask about the price of the dollar against the franc will ask you: Sell or buy?That is, it is intended to know: Do you have dollars and want to sell them and get Swiss francs, or you have and want to buy the dollar?If you asked him about the case will tell you an example:Dollar exchange rate against the Swiss franc is now: sale: 3.65 Buy: 3.50What does this mean?I mean, if you have CHF and I wanted to buy dollars Vsepeek dollar that you pay 3.65 francs.But if you had a dollar and want to buy Swiss will get for every dollar at 3.50 francs.Any Sepeek dollar at 3.65 francs to the dollar.And buy the dollar at 3.50 francs obtained for every dollar.May ask why there is a difference in price between buying and selling?This is because this difference is the interest earned by the cashier.Why give you the dollar and the franc takes you to that have not benefited from it?Will benefit from that when the dollar buys from others at 3.50 francs and sells to others at 3.65 francs.If the benefit is: 3.56 - 3.50 = 0.15 francs to the dollar sells, and what he buys and sells large quantities of many people this will become a great amount of difference is simple.This is called the difference between the price of buying and selling of a currency spread.The currency trading brokerage firms will deal with you as well to deal ATM._ek Currency at one price and you buy at a lower price a little and this difference is profit.So when you trade currencies, you will find that the prices of any currency pairs come: the price of the sale price and to buy.For example: will the price of the euro against the dollar EUR / USD = .9500-9505So if you have euros and you want to sell it and buy - you get - the dollar, Vststraeh you and pay you $ 0.9500.But if you want to buy euro and sell - pay - the dollar, you have to pay for each $ 0.9505 euros.A difference of $ 0.0005 will be the margin of profit.Called the purchase price of the currency ASKCalled the price you sell the currency BIDThe price will be similar to the view thus:

                                                BID ASKEUR / USD .9800 .9805GBP / USD 1.5235 1.5240USD / JPY 123.25 123.30USD / CHF 1.4828 1.4833What does this mean?Price, as you know: is the amount to be paid from the second currency for one unit of base currency.ASK: It means asking you to pay $ 0.9805 for one euro, that is, they _ek euro at $ 0.9805BID: You mean it shows the amount of $ 0.9800 to get you to one euro, that is, you buy the euro at $ 0.9800.IfASK: is the price at which you buy the base currency and sells - pay - the second currency.BID: This is the price you sell the base currency and buy - you get - the second currency.Notes here that the difference between the sale price and the purchase price in each currency is 5 points.Ie: SPREAD = 5 POINTSIf we assume that you bought 1000 euros depending on the rates listed in the table (1) will pay $ 980.5 InterviewIf you have to sell the 1000 euros that you will not immediately sell the same price you bought it, but you will get an interview on the $ 980 and had thus lost $ 0.5.This difference is exactly the benefit of the brokerage company as interest cashier.Currency prices are constantly changing up and down but always there remains a five-point difference between the purchase price and sale price, and this difference is a fixed profit for the brokerage firm.Take the examples:Example 1Suppose you looked at the plate prices at the workstation and found as follows:

                                     BID ASKEUR / USD .9800 .9805
 But you expect that the euro will rise 60 points, and soon will reach EUR / USD = .9860What do you do?Answer:We expect the euro to rise if we will have to buy euros to sell it later at a high price.Will be the price at which it will buy the euro is 0.9805 because the purchase price.Since ASK is the price at which it will buy the base currency and sell it to the second currency, and the base currency is always the euro against the dollar.If you will buy 1 lot at 0.9805 eurosIf ratified your expectations and the price of the euro might be considered by the panel prices in the workstation after a period of time Vtjd euro as follows:

                               BID ASKEUR / USD .9870 .9875
 You now have the euro and wants to sell at a higher price than the purchase price to the price When you look above you will find that the sale price (ie the price you sell it) is 0.9870Because the BID is the price you sell it you buy the base currency and second currency, and you have euros, and wants to sell, and the euro is always the base currency.If you want to buy the euro instead of Ststraeh to sell at 0.9875 to the price at which it buys the base currency.If you sell 1 lot of Euros that you have a price of 0.9870 to order the company to sell when the price reaches this limit.I bought 1 lot at 0.9805 and sold at 0.9870 and thus made a profit = 65 points profit.That is, you win $ 650 if you are trading in a regular account or $ 65 if you are trading in a mini account.Example 2Suppose you looked at the panel prices and the yen found as follows:

                          BID ASKUSD / JPY 123.50 123.55
 If you want to buy the yen now Ststraeh at any price?Answer:Remember, ASK: is the price at which you buy the base currency and sell the second currency.
      And BID: This is the price you sell the base currency and buy the second currency.And always knew that the dollar is the base currency against the yen and the franc.When you want to buy the yen (the second currency) and sell the dollar (the base currency), the purchase price will be the bottom of the BID.The purchase price would be 123.50.Are you the cause of some confusion in understanding?!!There is nothing wrong in principle you can take the following general rule:General ruleIf you want to buy the euro or pound price takes ASK.If you want to sell the euro, the pound take price BID.
 On the contrary ..If you want to buy yen, or franc take price BID.If you want to sell the yen or the franc price takes ASK.
 Elastosis and some things will become very clear for you.Take more examples:Example 3:Suppose that the price of the franc on the panel prices are as follows:

                              BID ASKUSD / CHF 1.4825 1.4830And predicted that the price of the franc will rise 50 points in the future, what do you do?Answer:We expect that the price of the franc will rise against the dollar means that the bullish market franc, franc will buy if the current price in the hope of selling it later at a higher price.When you buy Franc Snstraeh BID price because the price you sell the base currency and buy the second currency, and the second currency is the Franc.Will buy the franc at 1.4825.Example 4:Suppose that the price of the pound against the dollar is now as follows:

                                BID ASKGBP / USD 1.5235 1.5240And predicted that the pound will drop 80 points, what do you do?Answer:We expect the pound will fall against the dollar means that the market Fairy Steady, if we sell the pound at the current price in the hope that we buy it later at a lower price and keep the difference as profit.When we want to sell the pound now at Snabieh BID because the price at which we will sell the base currency is the pound, we will sell the pound at 1.5235.Example 5:Suppose that the price of the yen against the dollar on the board prices Malati:

                              BID ASKUSD / JPY 122.08 122.13And predicted that the yen will fall, what do you do?Answer:We expect that the yen will fall against the dollar, which means that the yen bearish market.If we sell the yen.When we want to sell yen at Snabieh ASK because the price you buy the base currency and sell the second currency, and the second currency is the yen.We will sell the yen at 122.13.As we have stated that in all cases and changed whatever currency there is a difference between a fixed selling price and the purchase price which is called the SPREAD.Vary among companies select the SPREAD some of which are determined by 5 points, including 4-points, including 8 points.In any case, the vast majority of brokerage firms have had the SPREAD = 5 points.We do not find an excuse to deal with being the SPREAD has more than that.I also saw the price difference between buying and selling is the basis of income brokerage firms in the currency market, although I have found some difficulty in understanding what we explained the difference between the sale price and the purchase price, especially since there is a difference between buying and selling currencies direct and indirect Flatqlq, with some of the training session These concepts will become very clear for you will not need to return to this subject later to understand or apply.Interest RolloverWhich is a form of income you earn brokerage firms in the trading currency as opposed to services provided by you.When you want to buy a lot of euros, for example, you buy 100.000 euro so do not pay them only $ 500 is deducted from your account temporarily margin user.You will have a temporary amount of 100.000 euro is required to be returned to the company and will retain the full profit for yourself that I sold at a higher price but if I sold at a lower price the difference will be deducted from your account and you will bear the entire loss.If, in fact, the brokerage firm gives you a temporary loan of $ 100.000 euro to be returned in full.In the international currency market is the loan period for one day.No you when you buy euros at a lot of hope to sell at a higher price they must sell this croaker on the same day to return the 100.000 euro for the company and retain the full profits for yourself.But what if the euro did not rise on this day?Do you sell a loss?It may be better for you to wait until the next day perhaps the euro rises and did not need to sell at a loss.It was Ajrif on this day too ..!!Feltentzer another day and so on until the price rises, is this possible?Yes possible .. But cost you some money.How so?Almlbg say that you buy you a brokerage firm based on your request is a loan must be fully back on the same day, if you want to wait for the next day will be required to pay interest on this amount, which is still reserved in your name.Why?You are still a barrier to the amount of 100.000 euro in your name if you have to end the deal for the company was able to lend to a customer or someone else to put it in a bank and get the benefit of a daily basis.Vhdzk of this amount for another day, demanding that you pay interest daily on each lot maintained by more than 24 hours.How much of this interest daily?This differs from company to company, but the vast majority of companies get an amount ranging between U.S. $ 8 - $ 20 for each lot every day in Pluto, which = 100.000 units of the base currency of any account the normal Standard In Allot, who = 10.000 units of the base currency of any Mini Mini in the account is calculated as interest amount of $ 1 per day for each lot.Change the daily interest rates between now and then because it is calculated on the basis of certain no need to mention here. Also differ from one currency to another.It will be through the workstation that you use in your business with the brokerage company to have constant value of daily interest to be paid for croaker for each currency purchase.For example: if you have a regular account where Lout = 100.000 per unit of base currency and you have purchased or sold the lot of euros and you want to wait and not close the deal for the next day you will be calculated amount of $ 10 a day until the end the deal. But if you have purchased or sold the lot of Japanese yen has calculated the amount you $ 15 a day until the end the deal.Valvaidp vary depending on the value of the currency also vary from time to time. Will be aware of the value of the interest that you will be prompted by an ongoing basis. But generally graduate from the border that we have mentioned before a small but rare.Of course if you buy a currency and then sold it on the same day will not be charged interest to you.In most cases the amount of interest is added after 5 pm EDT EST after 12 pm GMT.What does that mean?I mean, if you have to buy 1 lot EUR for example, did not sell because the price is appropriate for you until 12 pm GMT, the interest will be calculated daily on the lot and set off against the euro after the completion of the deal.So it is not recommended to enter the process at a time close to 12 pm EDT, because if passed at 12 at night and there is lot of you do not sell your name is still locked up so it'll cost you the daily interest rates.It is worth mentioning that at 12 pm GMT on Wednesday in particular are discounted interest rate for three days, or if you're in on Wednesday, you purchase a lot of yen did not sell before 12 pm GMT, it will be charged interest for the three days of profit after the completion of transaction, or in addition to your loss that ended the deal at a loss.Why Wednesday in particular?Because it compensates Day weekend Saturday and Sunday.As you can see the daily interest rates are among the costs of any transaction you enter must be put into consideration when calculating the profit and loss.We said earlier that the equation of profit and loss are as follows:Profit or loss = number of contracts (Lott) * * the value of the point spread pointIn order to develop a daily interest in mind, the equation for the profit and loss as follows:Profit or loss = number of contracts (Lott) * * points difference value point - the number of contracts (Lott) * * number of days the daily interest rates.

 This equation is the full and final profit and loss account and that they must save.We reiterate that the daily interest will not be counted against you only if you did not finish the deal before 12 pm GMT.Take the examplesExample 1I bought two Swiss francs Lott am at USD / CHF = 1.4520And then you sold them after 12 pm the same day at USD / CHF = 1.4580
 Calculate your profit or loss on the assumption that the value of the point = $ 6 and that the daily interest = $ 10 for each lot.Answer:First calculate the points of difference equation francs.Difference points = ((sale price - purchase price) * 10000) * -1
            = ((1.4580 - 1.4520) * 10000) * -1 = -60 points loss.Now we calculate the actual loss, but you did not end the process before 12 o'clock at night.Profit or loss = (number of contracts (Lott) * * points difference value point) - (number of contracts (Lott) * * number of days the daily interest rates).
                = (2 * -60 * 6) - (2 * 1 * 10 $) = $ 740Your loss is 720 $ on the deal added the $ 10 in interest per day on each lot you purchased be counted against you since you have not yet completed the deal only after 12 o'clock at night, even if you end the transaction before 12 pm, one minute you will not be counted against you interest, does that remind Psondrella?! !Example 2I sold three at Lotte £ GBP / USD = 1.5250Then passed 12 pm GMT for two consecutive months before to re-purchase of 3 pounds at a lot of GBP / USD = 1.5185.Calculate your profit or loss on the assumption that the value of the point = $ 10 and daily interest = 12 $ per lotAnswer:First calculate the difference in points of the equation for pound.Difference points = (sale price - purchase price) * 10 000
            = (1.5250 - 1.5185) * 10000 = 65 points profit.Now calculate the actual profit, has gone through 12 pm twice before the end of any deal, we will demand the benefits of two days.Profit or loss = (number of contracts (Lott) * * points difference value point) - (number of contracts (Lott) * * number of days the daily interest rates).
                  = (3 * 65 * 10) - (3 * 2 * 12) = $ 1,878It was a profit from the deal = $ 1,950, but $ 72 is deducted as interest on 3 lot for two days.Example 3You buy 1 lot JPY rate USD / JPY = 124.23And you by selling before 12 pm the same day at USD / JPY = 123.81Vahsb profit or loss on the assumption that the value of the point = 8 $ and a daily interest = 9.5 $ for each lot.Answer:First calculate the difference in points of the equation for Palin.Difference points = ((sale price - purchase price) * 100) * -1
            = ((123.81 - 124.23) * 100) *- 1 = 42 points profit.Now calculate the actual profit, and where we finished the deal the same day before 12 pm will not be charged daily interest.Profit or loss = (number of contracts (Lott) * * points difference value point) - (number of contracts (Lott) * * number of days the daily interest rates).
                  = (1 * 42 * 8) - (1 * 0 * 9.5 $) = $ 336
 Example 4You sell Lot 2 euros at EUR / USD = .9850Then you Bhraihma again after 12 pm on Wednesday at EUR / USD = .9875Vahsb profit or loss on the assumption that the value of the point = $ 10 and daily interest = $ 8 for each lot.Answer:First calculate the difference in points of the equation for the euroDifference points = (sale price - purchase price) * 10 000
               = (9850 -. 9875.) * 10000 = - 25Now we calculate the actual loss, but it passed 12 pm on Wednesday, particularly before the termination of the transaction will be charged interest for 3 days.Profit or loss = (number of contracts (Lott) * * points difference value point) - (number of contracts (Lott) * * number of days the daily interest rates).
                 = (2 * -25 * 10) - (2 * 3 * 8) = $ -548It was your loss on the deal, $ 500 has been the calculation of interest on the 2 lot for three days for the passage of 12 pm on Wednesday, the day the only interest is charged it for three days and to compensate for the holiday on Saturday and Sunday.