Forex is the largest market for currency in the whole world. It is also a vulnerable area for traders. The most important aspects of trading Forex is doing it with accuracy and speed. This all depends on the brokers. This where 4 digit Forex Brokers come in.
What is a 4 Digit Forex Broker?
Forex brokers give data to clients on what is currently happening in the market. This can include information about forecasts of pricing, the fluctuation of pairs of currencies in addition to looking at market signals. By talking about 4 digits, we simply mean that the price of a currency has four digits after the decimal point. When looking at a price action’s accuracy, the numbers after the decimal point define how accurate it is. For example, if Trader X offers a price of the currency pairs USD/EURO for 1.4001 and there’s a forecast saying it will rise by 0.0007, the fourth digit shows the positive value of the USD against the EUR. It makes it easier to see the amount of loss or profit that a trader can make.
Here is a list of forex brokers that use 4 digits
MAS, JFSA, DIFC
Why Four Digits?
Profit and loss margins are decided by how many pips a trader gains. With a currency pair with up to 4 digits, traders can take advantage of small moves in the pricing. Let’s have a closer look at other reasons why.
Gaining from Forex means a trader needs to be accurate and this comes from understanding and exploiting the smallest of differences in price between pairs of currencies.
4 digit brokers allow traders to time their trades well. This is due to the fact that they offer a detailed price for currencies. Traders wait for the small decimal differences that occur within a pair and will make trading decisions based on the timeframe.
Trading Platforms that red 4 digits
The majority of trading platforms can read charts of Forex with 4 digits. If you choose 4-digit Forex brokers it will help you to use these platforms and gain from the fundamental and technical analysis that they provide.
Whether you choose a 4-digit or a 5-digit Forex broker, your main aim is to gain from price differences. However, it’s worth considering that 4-digit Forex brokers are actually rarer these days as more brokers opt for 5-digits as they provide optimal price differences.