What are pips and spread?

Every new trader has a question what is pip? and what is spread? 

So, I would like to tell those newbies that pips is actually last digit of any currency price, for example, if you see eur/usd pair, and if its price is 1.3022, then the last digit will be called pip, and we use this word pip to evaluate the earnings. 

Now, lets talk about spread, when a trader start trading in meta trader then he see two prices, one is bid price and second is ask price, a trader will see the difference between bid and ask price, for example if the price of Eur/usd is 1.3022 in bid, then the price of ask will be 1.3025. Now, when a trader open an order of 1$ trading volume, then he will see minus 3 (-3) in his status bar, this is the spread that a trader pay to broker when he open an order. and if you want to earn money then you will have to cover that spread first then above that spread will be your profits, if you close that order.

In this picture you can see bid and ask prices, you can also see the currency pairs name. There are some categories of currency pairs, some of them are in major pair group, some of them are in minor, some of them are called crosses. If you see the spread difference then you will find major pairs have low spread, the spread will increase when you trade in minor, and the spread may go up to 350 pips according to currency pairs. Most of the traders prefer to trade with major pairs, because of its volatility, the high fluctuation, the high earning.

This picture has been taken from instaforex broker, and this broker has almost 350 pairs to trade, so I like this broker very much due to hundreds of pairs to trade.

Who is broker?

When you intend to trade in forex market then you need a broker for your intention, because without broker it is very difficult to trade with world market, a broker is a company or entity who attach you to the world market, and this is broker who give you leverage to buy big lots with small capital. So broker is very much necessary to trade in forex market.

Nowadays there are several forex traders available on internet, they will offer you so many things, some of them will offer you high leverage, and some of them will offer you welcome bonus, but what qualities you should see in a broker? 

A broker should be reliable, how can you judge him? by searching in internet. You just will have to type the name of broker and after name write scam or review, then you will find reviews on that broker. There may be some negative reviews and some positive reviews. If you find some positive reviews then you should invest a little to give him a try. What things you should see in a broker? You should see the payment options available with that broker, then you should see the withdrawal duration, that how much time will broker take to withdraw your money and how long does it take, the money arrive in your account? You should see if the broker is registered with concerned regulatory authorities? 

After all that research, now come on the offers he is giving you. First of all spread is important, If he is offering tight spread then you should see the spread first, then the swap or commission. If the broker is offering tight spread then how he is earning? these are the things that you should see in a broker? Is there any hidden charges? Is he execute the orders according to market or what? Therefore, you should see these things if you are going to choose a broker.

You should also see the minimum amount to invest in a mini or micro account. Is the account swap free? if the account is fixed spread or floating spread? how long a broker is in the market? How much bonus he is offering, and what are the conditions of that bonus? because there are several types of conditions brokers imposed on bonuses.