Hello All! I have been trading Forex on and off for the last couple of years. I am a Share trader (for those of you in North America that would be "Stocks") trying to make a transition into Forex. There is just something I don't understand about the whole Forex purchasing/selling process.
When you purchase a share/stock your transaction is processed by the exchange, verified then the number of shares you have purchased is allocated to you. What the hec happens in Forex?
I have read different things from different people about Market Makers and ECNs etc... but what actually happens? Is Forex like CFDs? Do you actually "own" the USD or EUR you're purchasing? or is it like CFDs where you're just speculating on the price? Do we own the actual asset when we make a purchase? How does it all work in the background with your Forex broker? When the broker offers you leverage at 1:100 or 1:500 does that mean they are "loaning" that money to you to speculate on the Forex market? Whats in it for them? If anyone knows anything about the whole process I would greatly appreciate your input.
This is one of the things that are keeping me from getting fully involved in Forex. I don't understand how it all it all works in the back end. Thank you all for reading and contributing!
Sincerely,
Azli1
When you purchase a share/stock your transaction is processed by the exchange, verified then the number of shares you have purchased is allocated to you. What the hec happens in Forex?
I have read different things from different people about Market Makers and ECNs etc... but what actually happens? Is Forex like CFDs? Do you actually "own" the USD or EUR you're purchasing? or is it like CFDs where you're just speculating on the price? Do we own the actual asset when we make a purchase? How does it all work in the background with your Forex broker? When the broker offers you leverage at 1:100 or 1:500 does that mean they are "loaning" that money to you to speculate on the Forex market? Whats in it for them? If anyone knows anything about the whole process I would greatly appreciate your input.
This is one of the things that are keeping me from getting fully involved in Forex. I don't understand how it all it all works in the back end. Thank you all for reading and contributing!
Sincerely,
Azli1