How Forex Brokers Manage Their Risk (C-Book)
You may come across the word "C-Book" in addition to forex brokers who "A-Book" or "B-Book." The term "C-Book" is used to represent "risk management procedures" used by forex brokers and CFD providers that are allegedly different from A-Book and B-Book.
Challenges of A-Book Execution
The A-Book implementation model comes with its own unique challenges. An A-Book forex broker can only earn profits from markups IF the rates at which it trades with the LP are better than the prices at which the broker trades with its customers.
A-Book: How Do Forex Brokers Handle Risk?
While your forex broker will always be your counterparty and take the other side of your trade, it does not imply it has to bear the risk of being on the losing end of the trade and losing money. If the broker does not want to "B-Book" or bear the market risk, a third party can be found and the risk can be transferred to them.
What is a Stop Out Level?
A Forex stop out is when all of a trader's active positions in the foreign exchange market are automatically closed by their broker.
What is Free Margin?
There are two types of margin: "used" and "free." In one of our last sessions, we looked at the Used Margin, which is the sum of all the Required Margin from all open positions. The gap between Equity and Used Margin is called Free Margin.
What is Equity?
Account equity also called equity by some people represent the current worth of your trading account.
What is Used Margin?
To understand what is used margin, it is also useful to understand what Required Margin is. Required Margin is the portion or part of margin needed to open your trade.
Impress Your Date with Forex Lingo
You have to learn the lingo, just as you have to master any new skill ...... In other words, it's like trying to win the heart of your lover.
Latest News
Challenges of A-Book Execution
WikiFXJapanese Candlestick Anatomy
WikiFXCandlesticks with Support and Resistance
WikiFXBasic Japanese Candlestick Patterns
WikiFX3 Cardinal Rules of Elliott Wave Theory
WikiFXCarry Trade in Context
WikiFXHow Does Gold Affect the AUD/USD and USD/CHF Exchange Rates?
WikiFXImpress Your Date with Forex Lingo
WikiFXRatio of Reward to Risk
WikiFXExplanation of Leverage and Margin
WikiFX