Dealing is the execution of transactions in the markets in order to generate income on the difference between buying and selling currency, assets, stocks, precious metals. The most popular among novice traders is currency dealing.
Features of dealing companies
Dealing company (also called a dealing center, FX-company) is an organization that provides an opportunity for clients with small trading deposits to trade on the international Forex market, conclude contracts for price difference (CFD contracts). One dealing center can simultaneously provide various trading options - currencies, metals, CFDs.
A dealing center can only be a legal entity, which must be licensed to be admitted to the foreign exchange market.
All trades that are made through an FX company are speculative. This means that such currency cannot be cashed or used for purchases. It is acquired solely for the purpose of resale.
When choosing a dealing company, it is necessary to take into account the company's reputation, trading conditions, the convenience of transferring funds, and the availability of training.
As a rule, all trading is carried out through specialized software. The most popular Internet terminal is MetaTrader 4. Trading by phone is rare today, but many companies allow you to open and close positions in this way.
The company forms its own quotes based on data from several specialized news agencies (Reuters, Bloomberg). They are used only for trading in the system.
Working conditions of dealing companies
When choosing a dealing company, it is important to pay attention to a number of parameters, among them the most important are the company's trading conditions.
It is worth considering the types of trading accounts that can be opened with the company. As a rule, such a classification is given - demo accounts, micro or mini accounts, standard or VIP accounts. Trading on micro and mini accounts will allow you to try your hand at Forex with a small investment.
The main difference between a broker and a dealing center is that the broker can display clients' transactions on the interbank currency exchange.
A trader's profit largely depends on the size of the spread (the difference between the buy and sell prices) - the lower it is, the better. There are fixed and floating spreads. The normal value for a fixed spread is 2-3 pips. Floating - depends on market conditions. With volatility, its value can reach up to 10 points. Typically, the spread ranges from 0.5 to 1 pip.
Swap is the percentage difference between loans for each of the pairs, paid if the deal is active for more than 1 day (charged at midnight). The lower the swap, the more profitable the trade for the trader.
Finally, margin requirements or leverage are important. The higher it is, the better - the trader needs to leave less funds as a pledge to open a position. The leverage can be 1: 100, 1: 500, etc.
It is also worth paying attention to the additional services offered by the diding center. For example, market reviews, forecasts, training, PAMM management.
