Forex trading is different from investing in shares or futures, because a broker can choose to trade against his clients. This system used by “Dealing Desk” Market Maker brokers is known as “B booking”. “No Dealing Desk” ECN/STP brokers send all of their clients’ trades to the real market or to liquidity providers. They therefore use the “A booking” system. However, many forex brokers use a hybrid model which uses a B Book for clients who lose money and an A Book for the profitable clients.
The term liquidity is generally used in the financial markets to describe the ease by which an asset can be converted into cash without difficulty. The importance of liquidity in the forex market is paramount and all market participants should be aware of how it works.
Wondering how to start a Forex brokerage? This is a very exciting business opportunity. But before opening a Forex company, there are a lot of important decisions from where to register a forex broker to how you will attract new customers (for example, by offering them high quality copy trading service). There are two major ways to start a forex trading business: open a company from scratch or use a white label solution.
Of course, everyone wants the cheapest license possible so the majority of available funds can be directed to generating forex leads and infrastructure. Most offshore jurisdictions will offer the most affordable licenses, they are not always the most appropriate, so careful consideration needs to be taken on selecting the right jurisdiction that fits the needs of the brokerage.
In order to source the best liquidity provider, brokers need to assess their own specific needs and address several factors. Primarily, a broker should look at the overall package on offer relating to what assets and the kind of liquidity being provided. It is essential that multi-asset liquidity is provided by the liquidity provider together with access to the FIX protocol and historical data.
Uncertainty over the US dollar for the first time, buying yen is a better option for risk avoidance.
The US dollar showed a one-time rise since Friday, September employment statistics surpassed expectations, but it fell against other major currencies concerned about the tension between the US and North Korea that became apparent after that. The US dollar index fell to 93.62 after marking 94.10 which is the highest price update for the first time in about two months at Friday, falling 0.16% from the previous day.
The USD is trading near its three month highs against basket of currencies. It is finding it strength from a growing view that a US rate hike is imminent. Fed Reserve chair, Janet Yellen, said on Friday that a rate hike would be “appropriate” if the US economy and labour market continued to improve.
In less than a months’ time, the United Kingdom will hold a key referendum to decide if the country will stay in the European Union or not. How should you be positioning yourself in the market to maximise the profit potential from the vote and its outcome.