Forex market questions

Hello,
I'd be very thankful for answering following questions:
(I have some information about all the issues but I'd like to know the details to fully understand them all)

1.Where does a broker get the price that I see on my screen from ? On what basis and by who is it calculated ?

2.Does the leverage means that in practice the broker lend me money(it's a collateral but there no such word in my language, does my trade involve the broker capital ? Can it be profitable to lend 100,000$ - margin just to get 30$ from 3 pips spread ?

3.When we trade Forex we trade on spot market where the physical deliver i dated for two business days. When I open a position through my broker I don't get the physical delivery, I trade with huge margin and I have to close my position - so do I trade currency or some kind of derivative ?

4.Could you explain me the rollover in details ? I know that it is the result of interest rates difference but but how to calculate rollover cost/gain and what kind of operation (forward?) is it ?

5.How does a retail broker work ? - connect only customers orders; trade with other currency trading institution (what kind) and participate in the market; does a broker take the opposite position to a customer and if yes is it profitable for the broker ?

6.Who can be a counterparty in my trade - broker/individual trader like me/non-financial company(importer or exporter)/financial company (hedging, investment fund)/bank dealing currency/my or other broker? Who loose when I win ?

7. Do you know where can I find some data, information or statistics regarding history and development of retail forex broker and electronic individual investors market share ?

Thank you for sharing your knowledge and experience.

Paul_K

You need to go to the Broker Discussion Forum. Read the stickys at the top of the page, especially the one by Darkstar. These should answer many of your broker questions.

Forex trading can be a good or has potential to make money. However, it is not easy as new trader think of it. In reality most of the trader lose money in the market.

A broker is the most important element in the trading. If you choose the wrong broker you can lose all your money. So be careful when you are going to choose a broker for you.

broker is really important , honestly speaking right now its much difficult to choose the right broker because almost thousands of broker are available in this trading place and most of them are found to be scam.

It is not possible to make a profit in trading without trading practice. Developing skills as a trader is very important. If a trader trades without learning, it is never possible for him to achieve success.

It is never possible to make money in trading without trading practice. If you can't get proper knowledge in trading, you can never get success.

Hi I am new with forex, i ve been reading about it, but still couldn't get few simple answers. I hope you will be able to help me.
A pair is made of base and quote.
B/Q. Let's say B/Q = 1.20
If you anticipate that B/Q will be 1.30, you buy B and sell Q.
If you anticipate that B/Q will be 1.10 you sell B and buy Q.
Everything almost making sense, but... Let's say you have an amount of currency C, like 1,000 C. C can be same as B, same as Q or another currency.
When you go to the bank to get B or Q, it's easy, you trade yours (which is C) for B or Q.

Now let's get back to this case. You want to invest 1,000 C to buy or sell. What are you buying first or what are you selling ?

If you want to buy B/Q, it means that you convert C to Q in order to get B ?
If you want to sell B/Q, it means that you convert C to B in order to get Q ?

What happens when you close the trade ?

More practically
3 scenarios: you have Eur 1000 / GBP 1000 / USD 1000 (this is your C)
EURGBP = 1.2

In my mind it's like this:

EUR INCREASES
BUY -> You already have 1000 USD, you buy EUR at the rate of 1.2, which means that you buy 833.3 EUR (1000/1.2). EURUSD goes up to 1.3, and then you sell your EUR to buy USD and you have 1083.2 (833.3 * 1.3). Now you have a profit of 83.2 USD

EUR DEACRESES
SELL -> You already have 1000 EUR, you buy USD at the rate of 1.2, which means that you buy 1200 USD. EURUSD goes down to 1.1, and then you sell your USD to buy EUR and you have 1090.9 (1200/1.1), a profit of 90.9 EUR.

Let's say you have 1000 USD or EUR or other currency like GBP. First you convert to EUR or USD (using the rate at the time of purchase) and then you convert the money again (using the rate at the time of closing the trade).

Is it correct ?