1/20/ · Banks enable forex trade for their clients and handle speculative trades on bank trading desks alongside their usual banking business. When banks play the role of dealers for customers, representing the bank’s profits, these currency trade speculations conducted by banks are a strategy to take advantage of currency fluctuations for blogger.comted Reading Time: 7 mins 10/3/ · Banks facilitate forex transactions for clients and conduct speculative trades from their own trading desks. When banks act as dealers for clients, the bid-ask spread represents the bank's profits Traders are influenced by the rates at central banks as well. When buying one currency against another in a forex transaction, you are essentially taking ownership of that currency using the counter currency as the funds of your transaction
Forex Trading through a Bank Account
It is becoming harder ever day to trust the brokers see the links I have posted at the bottom of this article. Therefore, Forex traders either have to forget about trading, or find another way of having access to the currency market.
Forex trading through a bank account looks like a good alternative. Because banks are more reliable and trusted organizations and governments have more supervision on them, you can trust them more than brokers, or at least you will not be faced with most of the problems that you have with the brokers. They are there to make money, and they will do their best to make more money every day.
Therefore, it is expected that even banks try to cheat their clients to make more money sometimes. However, it is less probable. Before trying to open a Forex trading account with a bank, first you have to make sure that you are already a consistently profitable trader, otherwise there is point to think about having a Forex trading bank account.
If you are not a consistently profitable trader yet, keep practicing and learning and passing the stages I have explained hereand then think about having a Forex trading bank account.
To do that, first you have to find a bank that offers such a service in your country. You have to refer to each bank and talk to the account managers and consultants. You have to tell them that you want to open an account to trade currencies against each other, forex trading through banks, not just to have a regular saving or checking account.
Trading through a bank account is different from forex trading through banks through a broker. The first difference is that there is no currency pair in your bank account. You should open a multi currency bank account and when you want to trade the currencies against each other, you have to convert one currency to another one. Your bank account has to cover all these currencies otherwise you will not be able to trade some of the currencies against the other ones:.
After having all these accounts under your bank account, you have to deposit some money in each account. It has to be a lot more, forex trading through banks. As you know, you can wipe out your account or even have a negative balance only when your account is leveraged. Although you can lose money even when your account is not leveraged I will explain howyou can never wipe out your account even if the market goes against you for thousands of pips.
The other difference is in the spread that the banks offer. Of course, you can always negotiate with the banks and ask them to offer you a good deal. They usually do it specially if you open a big account with them. They are prefect for Forex trading. It means you can convert the currencies to each other for free and without paying any fees or spread. As I mentioned, there is no currency pair when you trade through a bank. It means you pay USD to receive EUR, forex trading through banks.
In other words, it means you convert the money you have in your USD account to EUR. You can do this through the Internet and your online bank account. You forex trading through banks to use forex trading through banks online banking system to convert the currencies against each other.
But that is not a problem at all. You can use the demo platform of a broker to do your analysis. Of course, the prices you see on the MT4 forex trading through banks of a broker will not be exactly the same as the prices that your bank offers, but this is normal. There is no two banks or brokers that offer exactly the same price.
You hold EURs and the price moves accordingly which means EUR goes up against USD as you expected and it reaches 1. I mean your money is not wiped out. This is because there is no leverage here. If there was a leverage, then all your USD would be wiped out long time before the price reached 1.
As I mentioned earlier, avoid the banks that offer any leverage, because obviously they want to act like brokers and make your account wiped out as soon as possible.
You may ask what advantages it will have for the banks to offer such services to traders while they charge no fees and offer no leverage for converting the currencies to each other?
Banks want you to deposit your money with them, no matter if you trade Forex or you want to do something else. They use your money to offer loans and mortgages to their other clients to make more money. They use your money to work and make more money, forex trading through banks. Unlike the retail brokers, banks have too many ways to make more money out of your money. It is the brokers who have to cheat to cover their expenses and make profit.
I am not saying that banks are saints and angels. They just have some better options to make forex trading through banks than cheating their clients. Indeed, trading through a bank account, be it currencies or stocks, forex trading through banks, is what almost all professional traders and investors do.
You can hardly find a professional trader that trades through the retail brokers, not because brokers cheat and can hardly be trusted, but because trading through a bank account has several other advantages and is more trusted. One of the most important advantages of trading through a bank account is protecting your money while the sudden and strong forex trading through banks like The Swiss Franc Tsunami occur.
If this happens while you have a position and the price goes against you for thousands of pips like something that happened on Negative balance happens only when your account is leveraged. Although you will lose money if the market goes against you when your account is not leveraged, forex trading through banks, it will never get wiped out and will never end up with a negative balance. But the other reason which is even more important is that your account with a retail broker can be in one currency, forex trading through banks.
For example you open a USD or EUR account and then you can trade the currency pairs through it. After opening a multi-currency account with a bank, you have to deposit money in each of the accounts to become able to exchange currencies to each other. For example you deposit 10, unit in your USD, EUR, GBP, CHF, JPY, CAD, AUD and NZD. Therefore, your whole account will never be wiped out if something like the CHF tsunami happens.
The reason is that only those currencies that are involved will be affected, not the other currencies. Then the CHF tsunami happens and CAD loses its value against CHF. Then only the Forex trading through banks you have bought will be affected not the money you still have in your USD, EUR, GBP, CHF, JPY, AUD and NZD accounts. This is a big advantage of trading through a bank account, because your money will be safe automatically against the strong and sudden movements.
But there is a problem here which is money. You can keep on making and saving money through your routine job and the other opportunities while you are learning how to trade and you are improving your trading skills.
Maybe the money you make through your full time job is not enough even to cover your expenses, and so, you can never save any money to become able to open a trading bank account. This is the problem that many of those who are learning to trade forex have. Chances are the lose their interest and give up on trading for good. For this reason, we thought about creating a good source of income for our website followers. You need a good source of income, no matter if you are already a consistently profitable trader, or you are still learning how to trade.
If you are still learning how to trade, then you have to be able to cover your expenses and keep on learning how to trade with peace of mind. Even if you can afford to open a reasonable live trading account, forex trading through banks still need an extra source of income to cover some probable losses that can happen sometimes, and also to be able to survive when there is no trade setup for a long time.
Therefore, you need another source of income that makes money for you consistently while you trade and invest to make more money. This is what all professionals do. They have several sources of income including trading and investment. They make money, and then they make their money make more money for them through trading and investment. Here at LuckScout. com, we have thought about all these things. That is why we are working on creating some great opportunities to support you and help you to make your dreams come true.
Those who follow us properly, will become able to become financially free. very informative article!, forex trading through banks. I just have a question, is there any bank that does provide forex trading services. please tell me i have some money that i have win in my trading account with the forex trading now i want the money to be withdrawal they said i must open my bank account for forex trading through banks to do that is this wise please give me an answer thank you.
I had heard of Forex Trading through ones personal bank account before. It is a lot less risky than the brokers accounts, forex trading through banks.
How the banks trade Forex (using blogger.com)
, time: 11:09How Banks Trade Forex? - Forex Education
10/3/ · Banks facilitate forex transactions for clients and conduct speculative trades from their own trading desks. When banks act as dealers for clients, the bid-ask spread represents the bank's profits Traders are influenced by the rates at central banks as well. When buying one currency against another in a forex transaction, you are essentially taking ownership of that currency using the counter currency as the funds of your transaction 9/26/ · Bank traders only make up 5% of the total number of forex traders with speculators accounting for the other 95%, but more importantly that 5% of bank traders account for 92% of all forex Author: Bradley Gilbert
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