The foreign exchange market (currency, FOREX or FX) trades different currencies. It lets brokers, banks and other institutions easily buy and sell different forex instruments, such as currencies, CFD, Futures, etc. The purpose of the foreign exchange market is to help international trade and investment in online trading. A foreign exchange market helps businesses convert one currency to another. Forex broker is an assistant-mediator who helps you in currency trading for commission fee. He is an intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices. You are able to enter the forex market due to the leverage – the ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 (you can trade currency worth 100 times the amount of your deposit), but best online brokers set the leverage up to 500:1 (sometimes called 1:500). Online FOREX trading is also known as real-time trading.

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