What is A-Book & B-Book ?

Forex trading is a lucrative option for traders looking to take advantage of highs and lows in the value of global currencies. While the concept may appear simple to an amateur trader, it is quite the opposite. There are several layers within the forex trading industry. To understand the functioning of forex industry, it is better to have clarity about the different trading approaches adopted by modern-day forex brokers.

A-book and B-book trading are two contrasting approaches for forex trading which are adopted by brokers to execute the trades of their clients.

A-Book Trading: A Direct Approach Adopted by ECN Forex Brokers

A-book trading is a pure form of forex trading where a client’s order is directly transmitted to a liquidity provider without any intervention. This means that whenever a client places an order, the forex broker sends the order to the liquidity provider. Such kind of trading is one of the most common forms of trading approaches followed by brokers who promise true ECN connectivity.

Brokers earn from increasing trading volumes and there is no conflict of interest between the forex trader and broker. This means that brokers don’t benefit from your losses but grow as your trading volumes grow.

B-Book Trading: Tool for Market Maker or Manipulative Brokers

B-book trading is another trading practice where the broker doesn’t directly send the client’s order to the liquidity provider. Instead, the broker creates an opposite order which leads to the internal settlement of trade orders. For example, if a client places a buy order on a currency pair, the trader places a sell order with the same quantity.

Such a hedging technique for matching the opposite order is used by brokers to spread variations. But this generally means that a broker earns when a client encounters a loss. Simply, B-book approach means that your broker bets against your trading strategy in a bid to earn profits whenever you suffer from a loss.

This trading practice is quite controversial because of the development of a conflict of interest between the broker and the client. Many brokers execute a client’s trades in-house with an intention to earn from a client’s bad trading decisions.

B-book trading practices make loss-making clients an asset for a broker which means his services and packages are more focused on amateurs who are more prone to making losses because of a bad trade. Though this practice is not illegal, it certainly raises ethical questions about the role of brokers who adopt a B-book trading approach.

What’s best for a trader?

As a trader, it is always better to go with brokers who offer true ECN connectivity. That way, the responsibility of your loss truly rests with you. No one is benefiting from your loss. Instead, brokers will actually benefit only when you trade more and more. A broker would provide valuable tools and resources to help you increase your profits which will increase his trading volumes. So, going with a broker who follows A-book practices is better for any trader- amateur or professional.

How To Trade Forex Profitably

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Forex market is one of the most liquid markets around the globe. Every day millions of traders place orders in a bid to earn profits due to fluctuations in value of global currencies. Though forex trading is quite lucrative and easily accessible, not everyone is able to take advantage of this market. In this blog, we’ll provide some tips to help you be a better trader and turn profitable soon.

Diversify Your Risks

One of the best ways to turn profitable soon is to diversify your trade orders. Instead of just focusing on a particular market and investing huge sums, you should execute smaller traders in multiple unrelated markets. Such a strategy of not putting all eggs in the same basket brings better results.

Learn The Tricks of The Trade

If you want to succeed in the long term, you need to learn more about the forex market. There are several technical aspects that you can use and strategies you can apply to limit your losses and maximizing your profits. It’s better that you familiarize yourself with such strategies.

Grow On Your Profits

For new traders, it is always better to start trading with small amounts and invest only the sum you can afford at that time. And you should always focus on depositing a sum and maximizing the same by earning huge profits. Starting at a small scale will help you avoid huge losses due to high trading volumes.

Start Trading in a Single Currency Pair

Modern-day forex market is quite complicated for the uninitiated. This is mainly because of the unpredictable nature of the markets, external factors and hundreds of financial news and indicators emerging with each passing hour. So, if you really want to ace your trading game, it is better to start trading in a single currency pair. Choose a currency pair that you are familiar with and whose movements you can track easily. It’s better to start with your nation’s currency or a widely traded pair. This will help you understand the fundamentals after which you can move on to other pairs.

Be Patient and Stay Invested

One of the biggest mistakes amateur traders make is to trade for instant profits. Once their trade starts moving on the green side, they are quick to pull the plug and seal the small profit. At the same time, traders get disappointed if they suffer from losses early on. The best way to turn yourself into a profitable trader is to stay invested and wait patiently. You cannot win all the trades. It’s good to have a long term vision and focus on your profits rather than losses over time.

Quick Tips to Successfully Trade in Forex

    • Set stop loss for every trade order you execute.
    • Create a long term trading strategy.
    • Never pay heed to your emotions.
    • Don’t rush in to compensate for your accumulated losses.
    • Never be afraid of losses. Even the best traders suffer losses.
    • Try creating a positive balance in favor of profitable trades.

Forex trading can be a really profitable activity if a person is pragmatic and ready to learn every day. With the help of right learning resources and a thriving trading environment, you can also achieve desired profitability while trading in forex markets. At Copula Trade, we provide the best learning and trading environment to help you grow. So, why don’t you start by opening a demo account, today?

Benefits of Copy Trading

Copy trading is becoming an increasingly popular technique for trading online where traders can replicate the success of professional traders. Such a system automates an investors trading activity by allowing him/her to copy the signals and operations of successful traders.

Using copy trading techniques, even amateur investors can earn big within a limited time frame without learning to analyze the market signals or indicators in depth. Copy trading is a great way to save time, gain confidence and improve the profit margins of your trading activity. Here are some amazing benefits of copy trading:

Learn While Your Earn

Copy trading is a great technique for retail investors who are new to the trading industry. Most often, retail traders end up making a bad decision leading to heavy losses. Forex and other online trading markets operate live with several external risks, which are hard to understand for a naïve investor or trader.

Many times, traders don’t spend much time learning the fundamentals of online trading that lead to losses or even complete stoppage of trading activities on a trader’s part. Copy trading allows traders to earn while they learn and vice versa. They can copy the trading strategies of profitable and successful traders and can learn as they go for a better performing portfolio in the future.

Technical Expertise & Experience at Zero Cost

With the help of copy trading, it is very easy for a young investor or trader to get access to the technical experience and expertise of a renowned trader. There are several copy trading forums on the internet that allows investors to share their views about the market.

Also, many copy trading platforms provide chat or live support that educates investors about the best trading practices based on successful trading strategies. This means that without substantial experience in the trading market, a trader can learn to monitor trends like a pro and do well.

Saves Time

Copy trading is not only suitable for amateurs but also pro traders. Often, many traders do not have time to monitor the market movements and their trading activities. This is because they might be busy with their jobs or businesses.

In such a scenario, using a copy trading platform to replicate the trading plans and earn can turn out to be quite beneficial. Not only does this save your time spent on monitoring, but also ensures that you get better returns from your online trading activities.

Copy trading has turned out to be preferred forex trading strategy for thousands of traders around the globe. Owing to the inherent benefits of increased profits with minimum efforts, more and more traders are looking to adopt copy trading practices. Copula Trade is an advanced trading platform that provides effective copy trading features that allows you to earn more without spending too much time or effort. If you are interested in succeeding as an online trader, open an account with Copula Trade now.