The earnings of brokers are a topic of interest to all Forex beginners. As you’re just starting, all attention should be focused on the charts and news. However, you can avoid surprises if you understand how the broker works.
A trader must understand where their profit comes from so as not to lose money for nothing. You can visit the site https://fxcash.net/catalog/info/investizo and get acquainted with the reliable broker Investizo. It is convenient for beginner traders, as it offers adequate trading conditions, a stable platform, and fast technical support. FxCash has prepared a detailed review of this agent.
What is Spread and How Does It Work
A spread is the difference between a currency pair’s buying and selling prices. You pay this built-in commission every time you open a deal. The broker does not ask for a plan directly, but makes money on this difference. The larger the spread, the more you spend on each transaction.
Spreads come in two major varieties: fixed and floating. The first ones are convenient because the trader can calculate them in advance. Floating ones are dynamic and depend on the market’s volatility. When choosing a broker, consider the minimum values and the actual indicators in active trading.
What Are the Commissions and How to Evaluate Them
In addition to the spread, brokers may charge an additional commission on each trade. Such conditions are prevalent on accounts with a narrow spread. Thus, a trader can save significantly on the price difference but pay a fixed amount to the broker for each lot.
Sometimes, commissions are hidden in complex conditions. Therefore, you should not be lazy. Read the information about the tariffs so that you are fully informed. Another critical point is the commission for depositing and withdrawing funds. Reliable agents do not charge clients extra; they use standard payment gateways.
What Else Brokers Make Money On
Brokerage income is not limited to spreads and commissions. There are other ways to make a profit. They can also affect your trading. Here are additional sources of income for agents:
- withdrawal and deposit fees;
- account inactivity fees;
- position rollover swaps;
- trading against the client;
- affiliate programs and rebates;
- paid trading signals;
- advanced account types.
These elements are often not advertised on the first screen. Therefore, it is recommended that you review the user agreement and terms of service in advance. This is especially important if you plan to hold positions for several days. Or, if you do not intend to trade actively.
Each additional fee is part of your capital, leaving the turnover intact. Brokers who have everything clear and transparent usually immediately indicate the list of possible fees. Such open information is a good sign of the agent’s quality.
Conclusion
The broker makes money on every trade you open. This is normal because it provides access to the market. However, you need to understand how exactly the agent does this. Transparent commissions, clear spreads, and no hidden fees are the key to comfortable trading. With reliable information on each agent on the FxCash website, you can choose the perfect option for yourself.
