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long long way so yeah you'd
really don't need to spend too
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such as stocks and what not
Forex you know in today's one
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take into account daylight
savings when that changes twice
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age is probably the cheapest
market there is to trade by a
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00:12:37,368 --> 00:12:39,888
Forex especially compared to
kind of other asset classes
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don't need to be doing that so
just make sure that is in your
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or back for you so also just
keep an eye out on that so that
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but the spreads are actually 10
pips and then you know they get
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00:11:03,948 --> 00:11:08,228
daily rollover happens on the
market close at 10 PM GMT each
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00:10:48,368 --> 00:10:52,288
start to ship away at your PNL
so you know it's not something
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00:11:08,228 --> 00:11:11,828
weekday night because at that
time a lot of market
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00:10:22,108 --> 00:10:25,148
be aware of with swaps is that
if you are planning to hold a
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00:11:11,828 --> 00:11:14,068
participants they don't want to
pay the swap on their
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kind of slowly eat away at your
profit you know if the trade's
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consideration because after a
while it really can start to
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00:10:28,408 --> 00:10:30,608
swing trader this doesn't
really apply so much to kind of
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00:10:16,228 --> 00:10:19,428
broker for this if you do
want to check it out but the
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because when you are long the
currency that pays a higher
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broker will have a lot of
detailed information on how you
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will earn nought. 65% interest
on your position each day
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00:09:28,328 --> 00:09:32,968
out nought. 75% interest so if
you are short pound dollar that
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you are short, right? Because
you're borrowing that currency
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trading on margin, so you know,
we are leveraged trading,
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00:09:18,048 --> 00:09:20,968
short pound dollar and let's
just say for example that the
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got an open position on day
one. If you decide to hold this
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the two currencies in the pair
that you were trading. So, at
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PM GMT every weekday. The
broker rolls your position over
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same. Now, aside from spreads
and commissions, there is one
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prefer those narrow spreads but
then you'll kind of have that
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of the fee that you should be
aware of in your trading
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a commission of $3 for a round
trip now round trip all that
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means is it's essentially the
full cost for both entering and
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but generally when they do that
the majority of their revenue
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let's say the spread at the
time of the instrument that you
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automatic cost of doing
business to enter a trade. Now,
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tighter the spreads will be
generally, right? You'll get
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sellers that have their orders
in the market, then, the
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So, the more liquidity that
there is, the more buyers and
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why you're instantly at that
loss the size of the spread is
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because for you to exit the
trade right you need to sell
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the bid so the moment you enter
the market you're going to be
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the spread right that's the
difference between the ask and
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if you were to look at your
brokerage platform you will
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00:05:07,048 --> 00:05:10,768
the bid and to exit out of your
position you need to sell at
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remember we buy at what the
market is asking now the very
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00:12:04,548 --> 00:12:07,348
know they get slippage as well
yeah it's just you know you
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instantly at that very second
you entered you'll instantly be
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dollar right so let's say you
buy Euro dollar then you would
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difference in the micro pips
there right so it's a spread of
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00:04:07,708 --> 00:04:11,608
this it would just show the mid
price so halfway between which
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00:11:32,568 --> 00:11:36,848
some pairs widen as much as 30
pips so a general rule that I
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show is one spot 18359 now if
you were to go long on Euro
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00:12:21,988 --> 00:12:25,288
a year in terms of when daily
close may shift an hour forward
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00:11:22,068 --> 00:11:26,568
close market liquidity is
extreme thin so the spreads
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00:08:11,208 --> 00:08:13,608
through the end of the trading
day, you will either be paid
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00:11:56,188 --> 00:11:59,268
trade around this time let's
say with the five pips stop but
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00:11:50,448 --> 00:11:52,848
traders do this where you know
they just have no idea that
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when you're looking at your
price chart you will only ever
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00:12:09,708 --> 00:12:13,108
plan so just wait at least an
hour after the daily close
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00:12:30,728 --> 00:12:33,888
brokers you know generally all
of the major regulated brokers
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00:11:26,568 --> 00:11:29,728
widen dramatically now again
this varies from broker to
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00:03:24,168 --> 00:03:26,888
are looking at a price quote on
trading view for example right
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00:11:36,848 --> 00:11:39,648
think is really important to
have in your trading plan is to
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00:12:49,048 --> 00:12:51,408
much time worrying about the
fees but obviously it's you
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00:12:51,408 --> 00:12:54,548
know pretty prudent to be aware
of what they how they work and
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00:11:47,368 --> 00:11:50,448
unnecessarily because you know
I I've seen a lot of new
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00:12:01,988 --> 00:12:04,548
in they instantly take a loss
and sometimes even worse you
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at and that is essentially the
market price or in other words
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00:07:08,248 --> 00:07:11,488
brokers they don't actually
charge a disclosed commission
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00:11:01,628 --> 00:11:03,948
thing that you should be
conscious of is that when the
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00:10:54,528 --> 00:10:57,828
long term as it's nearly still
always very minimal but you
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00:10:25,148 --> 00:10:28,408
position a long time you know
if you're if you're more of a
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00:11:39,648 --> 00:11:43,928
never enter positions between 9
and 11: 00 PM GMT because you
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the bid. Now an easy way to
remember this is to ask
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00:12:28,808 --> 00:12:30,728
wraps up the fees that you
should be aware with your
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00:10:13,188 --> 00:10:16,228
know they calculate swap fees
for each pair so just ask your
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will often see where price
kind of gaps are or down to
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reality it is slightly harder
to calculate the exact carry
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preference which style you
prefer whether you kind of
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00:12:15,508 --> 00:12:19,228
you'll see them start to narrow
and come in a bit so obviously
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00:11:14,068 --> 00:11:16,668
positions. So what they'll do
is they'll exit the market and
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00:12:13,108 --> 00:12:15,508
until you see those spreads
start to calm down again and
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00:11:19,788 --> 00:11:22,068
this means is that about an
hour each side of the daily
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00:10:46,048 --> 00:10:48,368
sideways for a long time you
know that's going to really
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00:12:33,888 --> 00:12:37,368
are extremely competitive on
their fees and you're trading
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00:08:04,648 --> 00:08:08,328
the end of each trading day if
you keep your trade open
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sell button so it's almost
impossible to get it
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00:10:57,828 --> 00:11:01,628
know you should be definitely
aware of it. Now one last final
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pay or receive swap on your
open position. Now, when you're
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interest, but maybe the U US
Federal Reserve they are paying
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key key takeaway that I kind of
want you to learn and kind of
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quoted with two figures where
we have the bid price and we
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are trading is nought point6
pips now if you have a position
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tend to have much wider spreads
than the brokers who actually
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view the full depth of the
order book instead our broker
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00:11:16,668 --> 00:11:19,788
then a lot of orders are also
temporarily pulled. So what
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00:11:52,848 --> 00:11:56,188
this happens or or they forget
and you know they even enter a
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00:07:03,608 --> 00:07:08,248
to execute that position now
what you'll find is that some
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them they tend to have narrower
spreads but generally the total
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that is if the net carry is
negative then obviously it is
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but you're in a position where
you're paying a negative swap
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is added directly to your
account but in the flip side to
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carry and traders are seeking
to profit from this are known
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charge a very small markup fee
for overnight swaps and there
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those narrow spreads, the more
liquidity that there is. So,
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00:10:04,788 --> 00:10:07,308
interested in learning a little
bit more about this I will post
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times the monetary pip value
and that will give you your
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massively to worry about but
unless you're kind of a really
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flat commission rate or whether
you're kind of you know happy
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00:11:43,928 --> 00:11:47,368
just do not want to be paying a
ridiculously widespread
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brokers who don't charge a flat
commission rate they generally
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interest fee that is either
paid or it's charged to you at
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you are long but you will pay
interest on the currency that
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are short then that is why it
is a net positive carry now in
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for or the market is bidding at
because you can only buy at
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00:09:04,368 --> 00:09:07,608
receive more in interest than
you were required to pay and it
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00:10:07,308 --> 00:10:10,788
a link to an article in the
lesson notes for you also each
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to the next trading day. So for
example, let's say that you've
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trade over into the next
trading day, you will either
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00:11:29,728 --> 00:11:32,568
broker and currency pair to
currency pair but I have seen
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that you will earn pay because
most brokers they tend to
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subtracted from your account.
So for example let's say you
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00:03:29,288 --> 00:03:31,928
see one price on the right hand
corner right that the price is
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00:08:44,848 --> 00:08:47,648
right? You will receive
interest on the currency that
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00:10:36,088 --> 00:10:37,808
then you're obviously going to
want to take this into
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00:08:08,328 --> 00:08:11,208
overnight. So, in Forex, when
you keep a position open
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deliberately wrong and one
thing to note is that the ask
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00:07:47,388 --> 00:07:51,848
to have the wider spreads but
generally the car will be the
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00:09:32,968 --> 00:09:36,008
would actually be a net
positive carry trade and you
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00:09:00,408 --> 00:09:04,368
as carry traders. So positive
carry that results when you
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00:06:38,068 --> 00:06:42,588
size of 10 lots on that trade
remember one lot is $10 a pip
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00:07:37,668 --> 00:07:40,068
different types of brokers so
it's just down to your
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of smaller and more obscure
exotic pairs so therefore the
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to calculate the total
transaction cost you can use
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00:07:57,208 --> 00:08:00,968
business and that is something
called Swap. So, Swap is the
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00:08:13,608 --> 00:08:16,928
interest or you will be charged
interest on that position but
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price is always slightly above
the market price and the bid
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00:10:02,228 --> 00:10:04,788
are a few more steps to the
calculation so if you are
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00:06:59,208 --> 00:07:03,608
be $100 so that means that the
total transaction cost is $63
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00:09:43,528 --> 00:09:46,568
interest than the interest
charge of the currency that you
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total transaction cost so let's
say for your broker may charge
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for us as traders so that's why
we stick to the major pairs now
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Bank of England at that time is
paying out not one nought. 1%
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try to think of it like eBay
where essentially you sell to
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00:06:51,768 --> 00:06:56,048
trip plus the spread of nought.
6 pips and then you multiply
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00:08:16,928 --> 00:08:19,768
it will depend on the
underlying interest rates of
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00:06:06,568 --> 00:06:10,528
this formula so it's the
commission plus the spread
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00:06:47,748 --> 00:06:51,768
means that the cost will be the
$3 commission right at round
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the major have a higher trading
volume then you know those sort
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00:04:03,708 --> 00:04:07,708
nought. 6 pips so on trading
view if you were to look at
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00:07:35,188 --> 00:07:37,668
transaction cost will still be
the same between those
152
00:10:30,608 --> 00:10:33,448
day trade but if you are kind
of you know swinging that trade
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00:06:56,048 --> 00:06:59,208
that spread by the monetary pit
value which in this case will
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00:01:25,228 --> 00:01:27,908
your house up for sale, there
will not instantly be someone
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00:08:53,408 --> 00:08:57,128
to go short. Now, the net
between those is known as the
156
00:07:11,488 --> 00:07:14,048
so they they might tell you
that they have zero commissions
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00:05:27,668 --> 00:05:29,948
nature of the Forex market,
spreads are obviously, you
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00:07:27,948 --> 00:07:30,868
do charge flat commissions and
those brokers who do charge
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00:07:17,768 --> 00:07:21,308
will come just from the spreads
alone so what that means is
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00:02:00,408 --> 00:02:04,008
will just show us the current
best market bid and ask price
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00:02:21,548 --> 00:02:26,228
have the ask price. Now the bid
price is the price at which you
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00:06:27,428 --> 00:06:31,988
just that total sort of cost in
terms of your commission now
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00:05:52,368 --> 00:05:55,888
majors generally have those
lower and narrower spreads and
164
00:06:24,788 --> 00:06:27,428
then also executing your
position so essentially it's
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outside your front door, you
know, ready to buy with the
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00:04:54,928 --> 00:04:58,528
your position at the bid price
remember we can only sell at
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00:01:06,028 --> 00:01:08,348
if you are a retail order and
you're not trading with you
168
00:02:04,008 --> 00:02:08,368
and the difference between both
of those is the spread now the
169
00:01:22,668 --> 00:01:25,228
market would be the housing
market. You know, if you put
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00:04:33,688 --> 00:04:36,968
you've gone long at the ask
price at that very very second
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00:05:29,948 --> 00:05:32,628
know, constantly changing
because the market's dynamic
172
00:03:20,328 --> 00:03:24,168
price is always slightly below
the market price so when you
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00:04:43,248 --> 00:04:48,328
in a minus nought point 6 pip
floating loss Now the reason
174
00:04:20,968 --> 00:04:26,688
be buying at the ask price so
you go long at one spot 18362
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00:03:50,708 --> 00:03:56,268
example the bid price for Euro
dollar is at 1 spot 18356 and
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one method by which brokers
make their money. So, given the
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the seller is asking for it now
most brokers make it extremely
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on a USD pair so that means 10
lots is $100 per pip so that
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00:05:55,888 --> 00:05:59,088
obviously lower spreads that
means lower transaction cost
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00:05:32,628 --> 00:05:35,268
and price and volume are
fluctuating throughout the day.
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00:05:02,088 --> 00:05:04,968
in that nought point six pip
loss because that's the size of
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00:02:08,368 --> 00:02:11,028
primary way bro make their
money in the forex market is on
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00:05:21,548 --> 00:05:24,828
slightly increasing the spread
beyond the cost price, that is
184
00:05:10,768 --> 00:05:14,248
the bid which is nought point6
pips lower than the ask price
185
00:03:34,968 --> 00:03:39,968
it's it's it's the mid price so
that's halfway between the bid
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00:01:43,648 --> 00:01:47,008
every buy order in the market
to be filled it must be matched
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00:03:43,748 --> 00:03:47,228
price that is obviously known
as the spread and the spread is
188
00:05:14,248 --> 00:05:17,428
that you bought in at so that's
why the spread is your
189
00:03:47,228 --> 00:03:50,708
essentially the transaction
cost of trading so in this
190
00:03:56,268 --> 00:04:00,908
the ask price is at 1 spot
18362 so just really the
191
00:02:26,228 --> 00:02:29,948
can sell to the market and the
ask is the price at which you
192
00:02:11,028 --> 00:02:14,348
the spreads of currency pairs.
So it's wise to develop a solid
193
00:00:25,988 --> 00:00:29,868
affecting its price. So this
diagram illustrates what
194
00:02:46,248 --> 00:02:49,888
what the market is asking so
you buy on the ask price and
195
00:04:31,248 --> 00:04:33,688
second that you actually
execute that trade right so
196
00:10:44,008 --> 00:10:46,048
not really going in your favor
and it's kind of just going
197
00:00:19,548 --> 00:00:22,748
is essentially the amount of
demand and supply in a market.
198
00:02:38,068 --> 00:02:42,008
yourself what is the market
doing. So the market is asking
199
00:01:19,268 --> 00:01:22,668
lower too. So, a typical
example of quite in a liquid
200
00:02:14,348 --> 00:02:17,908
understanding of spreads. So
obviously all Forex prices are
201
00:01:33,748 --> 00:01:37,268
So, in the FX market, a liquid
market conditions are where you
202
00:01:14,948 --> 00:01:19,268
levels and or the quantity of
supply and demand may be much
203
00:01:47,008 --> 00:01:50,168
with an equivalent sell order
and vice versa for every sell
204
00:03:39,968 --> 00:03:43,748
and the offer and it's this
between the bids and the ask
205
00:02:53,408 --> 00:02:57,368
at the bid price now if this is
a bit confusing at first just
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00:01:08,348 --> 00:01:11,748
know absolutely massive size
However, with the liquid
207
00:00:57,388 --> 00:00:59,828
because it's an extremely
liquid market and there will
208
00:02:49,888 --> 00:02:53,408
you can only sell at what the
market is bidding so you sell
209
00:03:00,328 --> 00:03:03,968
the highest bidder or you buy
from the market at the price
210
00:00:22,748 --> 00:00:25,988
So it's the ease to which a
market can be traded without
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00:02:29,948 --> 00:02:34,668
can buy from the market. So you
buy at the ask and you sell at
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00:01:52,688 --> 00:01:57,408
an equivalent buy order for a
trade to occur now we do not
213
00:03:07,768 --> 00:03:10,408
simple these days anyway they
literally just have a buy and a
214
00:01:30,308 --> 00:01:33,748
exact asking amount in cash in
their hands, would they, right?
215
00:00:12,828 --> 00:00:16,108
Now to understand how spreads
work first we must have a basic
216
00:01:11,748 --> 00:01:14,948
markets, there may not be any
bids or offers at certain price
217
00:01:40,408 --> 00:01:43,648
fill the next best available
order because remember for
218
00:00:39,908 --> 00:00:43,628
and offers at every price level
but also with a large amount of
219
00:00:04,628 --> 00:00:07,588
and fees that are associated
with trading a live account
220
00:01:50,168 --> 00:01:52,688
order in the market to be
filled it must be matched with
221
00:00:36,668 --> 00:00:39,908
the market so the market is
very liquid there will be bids
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So each of the horizontal lines
they represent a price level in
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your order to instantly fill
your trade you know especially
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00:00:29,868 --> 00:00:33,188
liquidity looks like in terms
of an order book in the market.
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00:00:47,828 --> 00:00:50,988
click buy or sell with a market
order on a very liquid
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00:00:59,828 --> 00:01:02,868
pretty much always be enough
liquidity on the other side of
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instrument you know let's say
you're a dollar via your broker
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00:00:43,628 --> 00:00:47,828
volume at each of those levels
so for example if you've ever
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00:00:54,348 --> 00:00:57,388
then you likely would have got
instantly filled and that is
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00:00:07,588 --> 00:00:12,828
namely commissions, spreads and
swap during the daily rollover.
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00:00:01,008 --> 00:00:04,628
In this lesson we're going to
cover the main trading costs
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understanding of market
liquidity. So market liquidity
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00:12:54,548 --> 00:13:00,028
there are certain times of the
day to avoid placing trades.
22043
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