Althought we are perhaps getting a little ahead of ourself in asking and answering the above question at these stage,you might well be wondering,how and where do we trade? who offer these prices for us to see?
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And the answer is the retail forex brokers.
Twenty years ago trading in the foreign exchange market could have been extremely difficult if not impossible,but the internet has change all that.
Now you can find hundreds of brokers,all offering a very popular platform know has MT4 and MT5 (meta trader 4 and meta trader 5 respectively)which is free.who will open an account for you and have you trading in minutes.
I hope that answers that particular question,which then lead on logically to who am i trading against?
Indeed these is a question which even season forex trader has difficulty answering,and is often one that new traders don't like to ask.
Let me answer it here for you.In the spot forex market we often trade against our broker.(although not always has you will see later)we often take a position against our broker or they are trading against us!
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This leads to the next question which is whether this raise a conflict of interest,and the answer is - it depends on your broker.
This is why it is important to ask the right question and also understand the different types of brokers in the market.
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Some will be trading against you directly,while others will pass your order through electronically with no dealer intervention,brokers that pass your order directly to the interbank liquidity pool,are called ECN brokers,and they are the brokers i prefer working with.
