Cash Forex Trading - Counter-party Risk in Forex

 

In recent years, the cash Buy Forex Signals market has become one among the fastest growing financial markets within the us . The prevalence of online trading platforms and therefore the limited legal restrictions of the Forex market have literally caused dozens of companies to undertake their hand at Forex brokering.

And with numerous new brokering firms shooting up , it's inevitable that a number of them will come short in terms of the standard and even the morality of the services that they supply . Indeed, the most important source of risk in cash Forex trading might not be the market risk from currency fluctuations, but from counter-party risk.

Counter-party risk can generally be defined because the risk that the cash Forex broker will perform its obligations and deal fairly with its customers. you must thus be very careful about evaluating the creditworthiness and integrity of your chosen broker, because your trading accounts (and funds) are in danger .

Why Should I take care About Counter-Party Risk?

Not many of us know that some Forex brokers don't actually provide accurate market value feeds. for instance , the EUR/USD pair is also trading at 1.4657 within the market, but your broker may quote you 1.4659 to shop for (excluding any spreads).

Also, not many of us know that a lot of Forex brokers take the other position of their traders' trades. If you enter a buy trade for the USD/JPY pair for instance , your broker may then enter into a USD/JPY sell trade. This leads to a conflict of interest because now if you create money, your broker loses money and the other way around .

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