Understanding the Swap-Free Account, Bid, Ask, and Spread

There are many terms that are circulating in the world of Forex trading, but this article will only discuss the four of them. They are:

1. the Swap-Free Account
Swap free account is a special account that is given to traders who converted to Islam. This is because the owners of these accounts are usually Muslims. There are rules in Islam which prohibits a business transaction, where one party must pay or get interest from other parties.

Swap Free Account allows traders will not be getting interest from trading each currency pair, and if the trader determines his position while trading at the middle of the night. A trader with this account will not get the additional value of the pieces or the trader's account, regardless of the number of their open position volume.

Swap Free Islamic accounts can be referred to as, which was specifically created for Muslims, because the credit swap would be contrary to their religious beliefs. In this case the results of the transaction depends only on the currency exchange rate changes during a specific time period. Because of this difference, swap free accounts are given to those who want to wear Islamic accounts. Forex brokers provide swap-free service will not charge you an additional alias free.


Bid and Ask
When traders want to make order in the Forex market, they should know the currency pair and price of the pair. The price of the currency pair is represented by two symbols Ask and Bid, in which he has a specific digital notations.

2. the Ask price is the highest price in a currency pair, in which a trader buys a currency first in the abbreviation of the currency pair (for example, GBP, as shown in the picture). As a result, a trader sells a currency of the pair.

3. Bid price is the lowest price in the currency pair, where a trader sells a currency first in abbreviations, from other currency pairs. As a result, the trader buys currency, the second of the pair.

Let's see an example:

You have the currency pair EUR/USD quote 1.3652/1.3655. This means you can buy 1 euro to 1,3655 dollars or sell 1 euro for 1,3652 dollars.

4. Spread

The difference between the Bid and Ask prices is called the spread. Payment is spread over the opportunity to trade on the Forex market, the Commission awarded to brokerage firms (broker). Very small spreads in the currency market, they're ten or even a hundred times less than the "spread of banks". For most of the major currency pairs, spread the standards, which are generally 3 points.

Posted by Unknown on Monday, February 9, 2015 - Rating: 4.5

Title : Understanding the Swap-Free Account, Bid, Ask, and Spread
Description : There are many terms that are circulating in the world of Forex trading, but this article will only discuss the four of them. They are: 1. t...

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