Customer Profiling in the Hybrid Model. Let’s look at customer profiling in the hybrid model. The forex broker has to decide which customers go to A-book […]
The “Hybrid Model” Used By Forex Brokers. Let’s review the hybrid model used by forex brokers. In the previous lesson, we talked about why forex brokers are […]
What B-Book Brokers Don’t Like. Customers Who Win Consistently B-Book brokers don’t necessarily like customers who win consistently. These customers will grow their account balance over time. […]
What B-Book Brokers Like. A large number of similarly sized customers. B-Book brokers prefer to have a lot of similarly sized customers who trade as frequently as […]
How B-Book Brokers Make Money. You buy from the broker and sell to the broker. If you make money, the broker loses money, and vice versa. […]
Why Do Forex Brokers B-Book? Let’s take a look at why do forex brokers B-Book? And let’s start with the question, what is a B-Book broker? […]
Managing Residual Risk. Let’s look at managing residual risk from a forex broker’s perspective. They can manage it in two ways: The broker can transfer this […]
Internalization. Let’s continue our discussion of internalization. For example, the broker can see in its book that it has a total of 10 million units of long GBP/USD […]
Internalization. Let’s examine internalization, which is how forex brokers aggregate orders and hedge residual risk. How Forex Brokers Aggregate Orders and Hedge Residual Risk. With A-Book […]
Riskless Principal. When a trade is executed via STP, this type of transaction is known as a “riskless principal” or “matched principal” transaction. What is a […]
STP Execution. Let’s see how STP execution actually works. A-Book vs. STP A trade that is “A-Booked” is sometimes associated with being “STP’ed” or simply “STP”. […]
STP Execution: How Forex Brokers Manage Their Risk. Let’s explore STP execution and how forex brokers manage their risk using it. A-Book brokers are sometimes also […]
Challenges of A-Book Execution Continued Let’s continue our discussion from yesterday’s discussion of the challenges of A-Book execution. If a broker is going to rely on […]
Challenges of A-Book Execution. The A-Book execution model comes with its own unique challenges. An A-Book forex broker can only earn profits from markups IF the rates at which […]
Monthly A-Book Revenue Example. Let’s take a look at a monthly A-Book revenue example. Based on the numbers from yesterday’s post, here’s what an A-Book would […]
How an A-Book Brokers Make Money. Here is a simplified model of how an A-Book broker makes money: Spread Markup Example Showing How A-Book Brokers Make […]
How A-Book Brokers Make Money. Let’s take a look at a couple of other examples of how A-Book brokers make money. Scenario #2: EUR/USD Falls Let’s […]
How Does an A-Book Broker Make Money? Let’s take a look at an example of how does an A-Book broker make money. Price Markup Example: Buy […]
How A-Book Brokers Make Money. Let’s continue our discussion on how A-Book brokers make money. If your broker is not taking any risk on the trade, […]
How A-Book Brokers Make Money. Not sure you noticed in the previous two examples in the previous lesson, but the A-Book broker did NOT make any money. We […]
How Forex Brokers Manage Their Risk. Continuing our discussion on how forex brokers manage their risk, here are a couple of examples from an A-Book broker. […]