Thursday, January 28, 2016

What is a Forex Broker

In our previous articles, we have discussed about the advantages of forex trading. We have also explained some of the most basic forex trading terms. Today, in this article, we will now talk about the role and significance of a broker in forex trading.

First of all, what is a forex broker? A broker is a company or an individual that acts as an intermediary between the interbank and the investor. Basically, the broker is the one who handles the transactions, and buys and sells orders according to the decision of the investor. Brokers earn money either through commission or by charging a fee for their services.


To provide enough funds for margin trading, the forex broker needs to be associated with a large financial institution – like a bank. Also, the forex broker must be a member of a regulatory authority, such as IFSC to protect yourself from illegal practices such as scam, fraud and abusive trade practices.

Setting Up a Forex Trading Account


Before you can work with a forex broker, you must first create a live trading account. However, doing so might be difficult at the beginning, as you might feel overwhelmed choosing from a multitude of forex broker that offers their services out there. You can read this article so you can carefully choose the best forex broker


Opening an account with a forex broker is very similar to opening a bank account. Doing so requires money, paperwork, identity verification and other similar things. The process itself might take a few days. However, if you’re not comfortable providing personal information and a substantial amount of money right away, you can test the broker by creating a demo account first.

To be more familiar with forex trading, you can count upon our educational blogs and articles. Spot who the best forex brokers are, visit our official website WibestBroker to find out :)

Monday, January 25, 2016

Brief Explanation of Currency Pairs

As we have learned in our previous article, Foreign exchange market, or simply Forex, is a market that deals with buying one currency in exchange of another, in an effort to make a profit. 

For example, you currently have 920 euros and you want to trade it for U.S. dollars, in hopes that the dollar would rise up against the euro. Let’s say that the exchange rate of EUR/USD pair is 0.92, which means you can buy 1000 USD for 920 euros. After a while, the dollar really rises against the euro, and the exchange rate of the EUR/USD pair has gone up to 0.95. At such rate, you will be able to trade 1000 USD for 950 euros. Doing so would give you a profit of 50 euros! See how much money can you make with forex trading?

Currency Pair


The currency pair is one of the most basic terms that you should understand before going into Forex trading. Currency pair is the ratio of the value of one currency in comparison to another. 

There are more than a hundred currency pairs in the forex market. A number of them are traded in bigger volumes, while some of them in smaller volumes. Most of the volumes traded comes from major currency pairs. These major currency pairs are comprised of EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD and USD/CAD. 

You might notice that all those major pairs involves the U.S. dollar. That’s because the dollar is a world reserve currency. While the majority of currency pairs includes USD, some of the currencies trade without the USD being involved. Those pairs are called “currency cross rate”. For example, a European company wants to trade their euros in exchange of the Japanese yen. The company doesn’t have to convert euros into dollars before converting it to yen. Instead, they can use the EUR/JPY cross rate to trade the euro directly into yen.

Base currency and Quoted Currency


The first currency that’s quoted in a currency pair is called the “base currency”. For example, in a EUR/USD pair, EUR is the base currency. The base currency is typically what you want to acquire in a trade. For example, in a EUR/USD currency pair, you’re typically using the USD you have in your account in exchange for the EUR currency. 

The second currency that’s quoted in the currency pair is called “quote currency”. The quote currency represents the amount of currency you need to trade to acquire the base currency. For example, the EUR/USD pair’s exchange rate is 1.0800, it means that you need at least 1.08 USD in order to buy 1 EUR. 

Forex trading terms might appear complicated at first, but with our easy-to-understand educational blogs, we’ll make it simple for you :) We’re aiming to provide an easier and safer environment for newbie and professional traders alike, that’s why we’re here, to provide unbiased reviews of the most popular and top rated brokers. Visit Wibestbroker to see who the best forex brokers are!

Monday, January 18, 2016

Fundamentals of Trading: Margin Trading

You probably know by now that trading is a very risky business. But, do you know what’s even more risky than trading? It is called trading on a margin.

First of all, let me explain to you what “margin” is. Margin is a loan that is provided to you by your broker so you would be able to enter larger trades using a smaller amount of funds. With the help of the margin, you would be able to leverage your funds, allowing you to purchase stocks bigger than your current investment.

To be able to use margin, you need to open and be approved for a margin account first. The borrowed money is collateralized by the securities and cash in your margin account. The money that is being loaned to you doesn’t come free, however; it has to be paid back with interest.


Now, you might wonder how does margin and leverage works. It’s pretty simple. It works by multiplying your investment based on the leverage offered by your broker. Say for example, your broker offers a leverage ratio of 2:1. Due to the anticipation that Microsoft’s shares would rise, you’re tempted to buy shares of the stock, which is worth $100 per share. Unfortunately, you only have $1,000 in your trading account, which means you could only buy 10 shares of Microsoft. Fortunately, with the help of leverage of 2:1, you were able to buy $2,000 worth of shares, or equivalent to 20 shares.

Say the Microsoft’s share price surges 50% higher. Your investment will now be worth $3,000 ($2,000 + ($2,000 x 0.5)). After the broker is paid with the $1,000 you borrowed, you’ll have $2,000 left in your account, showing a total profit of $1,000. The stock price has only increased by 50%, but with the help of the leverage, you were able to generate a 100% return on investment. See how powerful leverage is?

However, you should still be careful when using margin to leverage your investments. Yes, trading on a margin can significantly raise your potential earnings, but it can also dramatically increase your losses.

Trade with confidence. Never be a victim of a fraudulent broker. Come visit WibestBroker to see the ratings and reviews of the most popular top rated brokers.

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Wednesday, January 13, 2016

Why Trade Forex

In a world full of opportunities, money-making techniques are just around the corner as long as you have the knowledge, skill, and patience to do so. We’ve been already into most of it. Full-time jobs such as property marketing, web development and being a part of a corporate business are just some of it.

Unfortunately, we’re living in a silly, crazy world. Most often, those who are earning the income they want doesn’t have enough time to enjoy it. While those who have the time don’t have enough money. 

Having a source of an above-average income while living the life of your dreams seems like far from reality. Believe it or not, but it’s possible!


Forex trading provides the ease and comfort of earning money whenever and wherever you want. As long as you have an access to the computer and the internet, you could already start trading in Forex.

In most of the traditional jobs, you need a combination specialized experience, impressive and carefully-written resume, and the right kind of connections just to get yourself hired. Fortunately, to dive into Forex trading, one does not need to have extensive experience to get started. Just by having a right training course, and by familiarizing yourself into the forex market, you can get started right away.

Here are some other reasons to embark yourself into forex trading.

It’s accessible round the clock. Unlike the stock and commodity markets, forex is an over-the-counter market, and it is open 24 hours a day. This is a great advantage, as it gives you the privilege to trade whenever you have the spare time.

Leverage. Using leverage enables you to control bigger market positions using a lesser amount of money. Most forex brokers offer a leverage of at least 1:100, which allows you to control positions 100x bigger than your capital.


Accurately predict the outcomes. The changes that are happening in the prices and the strength of the currency often repeat themselves in a predictable cycle, which allows you to see the market trends. By reading the technical analysis, you would be able to see these trends and earn profit from it.

Profitable in both bull and bear market. In forex trading, you can make profit during any market condition, whether the trend is going upward or downward. Trading in forex market deals with different currency pairs, so when one currency is moving upwards, another currency is going down so it's just up to which currency you chose to buy or sell with. You could make money in both bear and bull market conditions.

Capability to practice trading for free. Most forex brokers allow you to practice trading through the use of their demo account, so you could be able to familiarize yourself with trading and the market first without worrying about the risk of losing your money.

Forex market carries a load of opportunities for everyone to make a substantial amount of money, as long as you know what you’re doing. While trading in forex can earn you a significant amount of profit, it also carries a considerable amount of risk. 

Boost your knowledge about Forex trading by reading our educational blogs and articles. Want to know who the best forex broker is? Visit Wibestbroker to find out!