{"id":3520,"date":"2024-10-23T11:56:06","date_gmt":"2024-10-23T11:56:06","guid":{"rendered":"https:\/\/apex-aiexperts.com\/?p=3520"},"modified":"2025-04-28T14:50:05","modified_gmt":"2025-04-28T14:50:05","slug":"how-do-forex-brokers-work","status":"publish","type":"post","link":"https:\/\/apex-aiexperts.com\/es\/how-do-forex-brokers-work\/","title":{"rendered":"\u00bfC\u00f3mo funcionan los corredores de Forex?"},"content":{"rendered":"<p class=\"wp-block-paragraph\">Using a story, let\u2019s learn how forex brokers work\u2026<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once upon a time, two frenemies, Batman and Spider-Man, were hanging out.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They were lounging on the couch watching a movie, Justice League (Snyder\u2019s Cut), but after a couple of hours, their attention span started to drift.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even Batman began to get annoyed at watching himself as his character onscreen constantly growled in a low, deep voice due to his bitterness of not having innate superpowers like the others.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">All of a sudden, Spider-Man jumped to his feet and with excitement, and shouts:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Yo Bruce!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Call me Batman!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Whatever Bruce. Anyways, I have a fun idea!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Oooh!&nbsp; I like fun! What is it?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Let\u2019s play a guessing game on whether the price of something will go up or down.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">A guessing game? You spiders are so clever.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Dude I\u2019m not a spider. I just acquired spider-related abilities after a bite from a radioactive spider. There\u2019s a difference. Just because I wear a spandex suit with a spider symbol doesn\u2019t mean I\u2019m actually a spider.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Sure, whatever. My Batsuit is still better. It accentuates my nipples, and my absolutely chiseled set of abs. Anyways, I\u2019m interested. Not only am I wealthy, but I\u2019m brilliant. My conjectures always turn out correct. Please elaborate on the details of this game.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">The game works like this: Try to guess if the GBP\/USD exchange rate will go up or down. Let\u2019s say the current exchange rate is 1.4000. Do you think it will go up or down?<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman doesn\u2019t trust spiders. He unlocks his Batphone and looks up the current GBP\/USD exchange rate on Google and confirms that it is 1.4000. He wants to make sure Spider-Man isn\u2019t just pulling numbers out of his spider butt.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I think it will go up.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Oh really? Let\u2019s make a bet then.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">What kind of bet? How will it work?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">If GBP\/USD goes up, I\u2019ll pay YOU the difference between its price right now and whatever the price is when you decide to close the bet. But if GBP\/USD goes down, you\u2019ll pay ME the difference. Payouts will be in cash. Also, you can close the bet whenever you want. What do you say?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Let\u2019s do it! I\u2019ll take that bet.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman is now long 1 unit of GBP\/USD at 1.4000. This means that a 1 pip move equals $0.0001.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One hour later, Spider-Man mentions to Batman that GBP\/USD has risen to&nbsp;<strong>1.4100<\/strong>. It has gone up&nbsp;<strong>100 pips<\/strong>.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Yo Dark Knight, the exchange rate has gone up 0.01 or 100 pips.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman checks his Batphone and lo and behold, GBP\/USD has indeed risen to 1.4100.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Not sure how long this price will hold up. I\u2019m out. Let\u2019s close the bet.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">At the start of the bet, GBP\/USD was at $1.4000. And at the end of the bet, GBP\/USD was at $1.41000. So the difference is $0.01 or 1 cent.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Gosh darnit. My \u201cspidey-sense\u201d doesn\u2019t seem to work on the forex market. Looks like I lost. Your payout is $0.01. Don\u2019t spend it all at once.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man tosses Batman a penny.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Batman gladly accepts the money and after having some greedy thoughts, says:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">All I made was $0.01 profit. That type of tiny profit might be good enough for a spider, but not for a bat. If I had only made a bigger bet, I could\u2019ve made a lot more money and become even wealthier.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Okay, Mr. Spoiled Bratman, let\u2019s make the same bet. But this time, instead of betting 1 unit worth of GBP\/USD, let\u2019s bet 10,000 units of GBP\/USD!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">But I\u2019m not carrying \u00a310,000 worth of dollars! My Batsuit is too tight. It\u2019s like wearing black skinny jeans that cover my entire sexy body.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Oh. And here I thought you were rich. How much money do you have on you?<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman checks his Batwallet.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I have $20. Excluding the penny that I just won from you.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">No problem Batsy. How about we just pretend that I\u2019ve loaned you the entire amount. This way, for every 1-pip move, you\u2019ll gain $1. This means if GBP\/USD goes up 100 pips again, instead of making $0.01, you\u2019ll make $100!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I don\u2019t trust dudes who wear tight black suits with capes so I\u2019ll use your $20 as collateral to cover the initial risk if the price falls and moves against you.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Think of it as a security deposit. If you win the bet, you\u2019ll get it back.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">If GBP\/USD starts to fall, rather than pay up, you might decide to jump in your Batmobile and leave. I don\u2019t want to end up empty-handed so holding your $20 as collateral will protect me. If you try to leave without paying, your $20 will be forfeited to me.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Also, if the price falls more than 20 pips, you don\u2019t have any more cash to cover any losses beyond that, so I\u2019ll automatically close the bet and keep your $20.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">As long as the price doesn\u2019t fall below 20 pips, which is the value of your collateral ($20), the bet remains open until you tell me to close it.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Okay. Sounds good. But what about you? Are you sure you can pay up this time if I win again?<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man flashes an evil grin.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Of course. I\u2019m an Avenger. You can trust me.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Fine.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Fantastic. Let\u2019s begin!<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman checks his Batphone and verifies that the current GBP\/USD exchange rate is 1.41000.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I\u2019m betting that it\u2019ll go up from 1.4100, its current price. Here\u2019s my $20 to open the bet.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man suddenly senses GBP\/USD will continue to rise so he tries to stall by pretending not to hear Batman.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Hello? Did you hear me? Unlike snakes, spiders aren\u2019t deaf. Here\u2019s my $20 to open the bet.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">What was that? So you do want to open a bet? My price for GBP\/USD has changed. It\u2019s at 1.4150 now. You still want to make the bet?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Dude, what the hell. I thought you said GBP\/USD was at 1.4100. Now you change the price all of a sudden?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">That\u2019s my new price. So are you in? Better hurry, before I change my price again.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Fine. I\u2019m in. I bet it\u2019ll go up from 1.4150.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman is now long 10,000 units of GBP\/USD at 1.4150. A 1 pip move equals $1.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A couple of hours later, Spider-Man announces that GBP\/USD is now trading at 1.4350.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">GBP\/USD has gone up by 200 pips.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I\u2019d like to close the bet now.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">At the start of the bet, GBP\/USD was at $1.4150. And at the end of the bet, GBP\/USD was at $1.4350. So the difference is $0.02 or 200 pips.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But since the bet size is 10,000 units, Spider-Man\u2019s payout to Batman is<strong>&nbsp;$200<\/strong>&nbsp;($0.02 x 10,000).<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Fothermucker! Looks like you won the bet again! It\u2019s gone up by 200 pips, which means you won $200.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">With the imaginary \u201c10,000 units\u201d that Spider-Man conjured up, Batman has made $200.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man pays him $200 out of his own pocket and also returns the original $20 (that was used as collateral).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With just $20, Batman won $200. A 10x return!<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Let\u2019s play again. I think GBP\/USD will continue to\u2026.<\/p>\n<\/blockquote>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2021\/06\/03192832\/bat-signal.png\" alt=\"Bat Signal\" class=\"wp-image-204109\"\/><\/figure>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Damnit. The Bat-Signal! BRB!<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Twenty minutes later\u2026<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Let\u2019s play again. I think GBP\/USD will continue to go up. But I want to increase my bet size to 100,000 units.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Oh we got a whale over here! Looks like someone wants to trade bigger. You sure you don\u2019t want me to call you Whaleman? Batwhale?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Okay, I can increase my imaginary loan to you.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">My price for GBP\/USD is 1.4300. But this time, since your bet size is bigger, I\u2019ll need $200 from you as collateral.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman hands Spider-Man the $200 he just won.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Batman is now long 100,000 units of GBP\/USD at 1.43000. This means that a 1 pip move now equals $10.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A couple of minutes later, GBP\/USD has fallen to 1.4295, a drop of 5 pips.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">GBP\/USD is now down 5 pips. That means you have an unrealized loss of $50 (5 pips x $10).<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">If you want, I can close out the bet now and take $50 from your collateral as payment and return the remaining $150 to you.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Hell no! Don\u2019t be a pest! I still believe GBP\/USD will go up. The bet stays open!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Okaaay.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Five minutes later, GBP\/USD plummets.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">The price of GBP\/USD has quickly dropped to 1.4275. You\u2019re now down 25 pips. This means you have an unrealized loss of $250. Since your collateral ($200) isn\u2019t enough to cover this loss, I\u2019ve closed the bet and your collateral is now mine. Thanks for the $200!<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">In this simple story, there\u2019s a lot to unpack.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, notice how:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Spider-Man literally creates a \u201cguessing game\u201d from his mind where you could make bets on the direction of the price of&nbsp;<em>anything<\/em>&nbsp;and make money if your prediction is correct?<\/li>\n\n\n\n<li>Spider-Man can make up any price he wants?<\/li>\n\n\n\n<li>Spider-Man can move his price at any time even when Batman is about to open his bet?<\/li>\n\n\n\n<li>Spider-Man can make up any bet size he wants regardless of whether Batman has enough money?<\/li>\n\n\n\n<li>Spider-Man is always taking the other side of the bet? And nobody else?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This story provides a lot of hints on how trading with a retail forex broker works.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In case it wasn\u2019t obvious,&nbsp;<strong>Batman is you, the trader<\/strong>. While&nbsp;<strong>Spider-Man is the forex broker<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Notice how Spider-Man or Batman didn\u2019t actually own any British pounds. No actual quids were ever exchanged. They were simply making dollar-denominated bets on the price fluctuations of GBP\/USD.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With retail forex trading, you don\u2019t take ownership of the currencies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You\u2019re basically making a bet with your forex broker on whether the price of a currency pair will rise or fall.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The payout is the difference between the price when the bet was made and when the bet was closed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Either&nbsp;<strong>you or the broker<\/strong>&nbsp;will have to pay the difference depending on who ends up wrong.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The risk here for you is that your forex broker defaults or doesn\u2019t have the money to pay for any profits that you\u2019ve made.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s return to the story and see how this could happen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The next day, Batman and Spider-Man meet up for breakfast.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After finishing their avocado toast topped with chopped almonds and a drizzle of smoked olive oil, Batman stares deeply into Spider-Man\u2019s eyes and says:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Let\u2019s play that guessing game again. I think GBP\/USD will go up today. My bet size will be 100,000 units.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Okay. My GBP\/USD\u2019s price is 1.4300. I\u2019ll need $200 from you again as collateral.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman hands Spider-Man $200.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you didn\u2019t notice, Spider-Man magically created a 100,000 unit position size and required just $200 of \u201cmargin\u201d. This is an example of leveraged trading.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One hour later, Batman asks for the current price of GBP\/USD.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">GBP\/USD is now trading at 1.4600.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Booyah! GBP\/USD has gone up 300 pips! At $10\/pip, I\u2019ve made $3,000 in profit! I\u2019m gonna buy me a new Batboat.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Uh, congrats bro, but we have a problem.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">What?<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I can\u2019t pay up. I don\u2019t have the money.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">What do you mean you don\u2019t have the money?! But you took the bet!<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">I did. But I didn\u2019t think I\u2019d lose. The only money I have is the $200 you gave me as collateral. I can give you back that.<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">WTF?! What about my $3,000 payout?!<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man looks up and points to the sky\u2026.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Look at that! It\u2019s the Bat-Signal!<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Batman looks up and sees nothing. When he looks back down, he discovers that Spider-Man is gone!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this scenario, the \u201chouse went bust\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man took the opposite of Batman\u2019s bet but didn\u2019t have the capital to fulfill his obligation to Batman.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is known as \u201c<strong>counterparty credit risk<\/strong>\u201d (Can the other party of a transaction pay?).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When you open a trade with your forex broker, you and the broker become&nbsp;<strong>counterparties<\/strong>&nbsp;of the trade.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Just like Spider-Man, the broker takes the opposite side of your bet.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Are you sure it\u2019s able to fulfill its obligation to you?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While your broker makes sure that you can pay if it wins (and you lose), it\u2019s also important that&nbsp;<strong>you make sure that your broker can pay up if you win (and it loses)<\/strong>!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man also vanished without returning the $200 that was used as collateral so Batman also ended up losing all of the funds that he gave to Ant-Man.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man ran (jumped?) away with Batman\u2019s money never to be seen again until his next movie.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Legitimate forex brokers would prefer to stay in business, rather than go bust or disappear with your funds.&nbsp;Unlike shady Spider-Man, they do have ways to manage this risk.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a later lesson, we\u2019re going to look under the hood and explain to you what actually happens when a forex broker executes your orders. You\u2019ll learn how forex brokers manage their risk so they don\u2019t go bust.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But this is just one (of several) things to carefully consider when choosing your forex broker.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In order to properly evaluate retail forex brokers, it\u2019s important to know how a typical retail forex broker operates so here\u2019s what we\u2019ll cover:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Who are you trading with?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike Batman in the story above, you\u2019re not going to know who you are trading with. And even if you did, that doesn\u2019t mean you should blindly trust them. Even Batman was duped by a fellow superhero, who was supposedly a \u201cgood guy\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your forex broker is a faceless corporate entity that requires you to send it money so you can open trades with it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Are you sure they are who they say they are? Is it a legitimate company that really provides forex trading services? Or is it a fake fore broker? How do you know the company won\u2019t just take your money and disappear?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Who are you really trading with? Is it a reputable broker?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are you actually trading?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Notice how Spider-Man or Batman didn\u2019t actually own any British pounds. No actual pounds were ever exchanged. They were simply making dollar-denominated bets on the&nbsp;<strong>price fluctuations<\/strong>&nbsp;of GBP\/USD.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So if you\u2019re not actually buying or selling,&nbsp;<em>qu\u00e9<\/em>&nbsp;are you trading?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Where are you actually trading?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Notice how Spider-Man created a \u201cmarket\u201d (to bet on the price direction of GBP\/USD) for Batman with just his imagination?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Did you also notice how there were only two parties involved?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whenever Batman made a bet, Spider-Man did not go out into the \u201cmarket\u201d and search for another person to take the opposite side of the bet.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Spider-Man simply took the opposite side of ALL of Batman\u2019s bets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As long as both agreed on the terms, real bets were made and were expected to be honored. Nobody else was involved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So if you\u2019re not trading in the \u201cmarket\u201d,&nbsp;<em>where<\/em>&nbsp;are you trading?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How do forex brokers manage their risk?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">During the last bet made between Spider-Man and Batman, notice how the price of GBP\/USD moved unfavorably against Spider-Man and he ended up not having the money to pay?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because Spider-Man is the sole person taking the opposite side of Batman\u2019s bet, Batman should\u2019ve made sure that Spider-Man would be good for the money.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The same concern should be made with retail forex brokers since they operate in a similar fashion.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So if your forex broker is always taking the opposite side of your trades, how does it avoid the risk of going bust? And taking your money down with it?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Are the prices that your forex broker quotes you fair?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Notice how Spider-Man can quote any price he wants?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Fortunately, Batman was smart enough to use his Batphone and reference a third-party data source (Google) to verify if&nbsp;the price that Spider-Man was using was accurate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But what if he didn\u2019t? Once the bet was made, Spider-Man could continue to make up prices in his favor. For example, he could say that GBP\/USD has fallen 500 pips (even though it hasn\u2019t), and Batman would be forced to bet at a loss.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So if your forex broker is able to quote you any price it wants, how do you know that the prices you see on the trading platform are fair? Where do the&nbsp;<em>prices<\/em>&nbsp;come from?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is the quality of your forex broker\u2019s order execution?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Notice how Batman wanted to open a bet when the starting price of GBP\/USD was at 1.4100, but Spider-Man declined and changed the price to 1.4150 instead?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Esto se conoce como&nbsp;<strong>slippage<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Slippage is the difference between the expected price of a trade and the price at which the trade is actually executed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Slippage can occur for a number of different reasons and can work for and against a trader.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Batman\u2019s case, he experienced&nbsp;<strong>negative slippage<\/strong>, which is when Spider-Man gave him a worse price than expected. This results in a smaller profit or a larger loss.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Being quoted a specific price, even if it\u2019s accurate and fair, means NOTHING if your order can\u2019t execute at said price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How can you determine the quality of its order execution? Where orders will be executed at your requested prices?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We will cover these topics in detail (and more) in the following lessons.<\/p>","protected":false},"excerpt":{"rendered":"<p>Using a story, let\u2019s learn how forex brokers work\u2026 Once upon a time, two frenemies, Batman and Spider-Man, were hanging out. They were lounging on the couch watching a movie, Justice League (Snyder\u2019s Cut), but after a couple of hours, their attention span started to drift. Even Batman began to get annoyed at watching himself [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,49],"tags":[],"class_list":["post-3520","post","type-post","status-publish","format-standard","hentry","category-kindergarten","category-forex-brokers-101"],"_links":{"self":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/3520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/comments?post=3520"}],"version-history":[{"count":2,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/3520\/revisions"}],"predecessor-version":[{"id":5702,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/3520\/revisions\/5702"}],"wp:attachment":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/media?parent=3520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/categories?post=3520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/tags?post=3520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}