9 Things to Consider When Choosing an Online Forex Broker

When you start trading Forex, you automatically become a part of this huge trillion-dollar trading environment. Biggest market in the world, Forex gives us opportunities to gain fortune or experience devastating losses.

If your Forex career is just to begin, there are plenty of things to consider: personal goals, your funds capability, trading strategy, etc. Since there is no marketplace for the FX trading, you must get yourself a broker to conduct the activity for you.

And yet, it’s even more! Both your trading success and broker’s assistance are quite tied up. So here are some important criteria to think of when choosing a FX broker:

1.    Foundation
No secret that the number of online Forex brokers is growing fast. So be attentive and double-check a brokerage before you put your signature elsewhere. As online Forex brokers are not alone-standers, they are commonly backed up by some large bank or lending institution. This is of course the result of high leverage offered. Mostly brokers are ready to please you with 100:1 leverage, which does mean “tons” of money for you to trade. That is why you should check a broker’s back up to find out how strong the foundations are.

2.    Legitimacy.
Know your broker before signing contract and “period.” The legitimacy of a brokerage can be verified through the registration with certain regulatory bodies. For instance, USA brokers must register with national Futures Association (NFA) or Commodity Futures Trading Commission (CFTC).   And there is FSA (Financial Service Authorities) for which controls the United Kingdom brokers. Anyway, the broker’s location does not really matter, except the registration with the correspondent bodies. Look through a broker’s website carefully or study forums to avoid fraud.

3.    Competitive spreads
As your potential broker is legitimate and has funds secured, now you need to find out how good the offer is. Forex brokers earn their “snatch” in the spread, which is the difference in pips between buy and sell price of a currency. Here, we can speak about the difference in commissions if we mention stock market brokers. As a trader you should look for the one with smaller spreads, which is “willing” to give you maximum profit.

4.    Resources and Emotionless Trading
Nowadays, an average Forex broker can offer you a wide range of services. The trading itself is basically done through a broker’s trading platform – you must test and evaluate it before choosing a Forex broker. The platform must compete with the market standard and include real time charts, live news and market data updated, integrated technical analysis tools, etc. Also the trading platform helps you to leave your emotions out by setting Stop Loss and Take Profit points. Sticking to them does much of successful trades. No emotions make your trading cold and calculated. So check of your broker has the features needed.

5.    Leverage Flexibility
This is one of the biggest FX market advantages. Leverage makes a $100,000 transaction possible with only $500 balance in your account. Don’t get too excited! The higher leverage means greater risk. If your capital is limited, higher leverage offers you more opportunities. And if money is not a problem, the saying “Less is more” about leverage is the right one. So check if your broker can please your trading needs.

6.    Account Types
Your trading needs define the necessary account type. You must be sure that your broker offers the accounts you need.

7.    Margin Rules Democracy
Since Forex market, leverage allows us to trade with some structure’s money, we don’t actually have total control over our transactions.  This means that your broker determines the risks you are taking with brokerage funds when you are making a new deal. If a brokerage has tough margin rules, some of your positions may be sharply declined. A margin call is the worst here: a broker can liquidate your account before the position gets a chance to make you profits. As a result, you get huge losses. So check whether your broker has strict margin rules.

8.    Accessibility
It is about customer service and support. Are they accessible enough? No matter the problem you have (technical or general); there must be someone to assist you in the best way. If there is none, you better say, “No, thanks!” to this broker as sometimes low quality customer support can cost you thousands of dollars or more.  Examine this feature before signing for a broker.

9.    Demo Account
Last, but not least. And probably it is the first in order of importance. Before diving into the ocean deep, it’s better to have some training on the shore. Open a demo account to check your abilities. Of course, one might say demos do not indicate the success until you trade real money. It may be true as natural pressures could cause different results. However, trading with a demo account will help to test your strategy and yourself as a beginning trader. Not the best option ever, but it’s worth starting with.

Now you know what to demand from your potential broker. Please, also mind that rushing into the global market could lead to a fail. Be consistent with checking your online Forex broker against the above-mentioned criteria, choose a trading strategy, and master the technical and fundamental analysis to get prepared to play the real money.

This article was written by Alexander Collins from Forexeasystems. He believes that automated Forex is a future of Forex market and propose all Forex traders to try his sophisticated Forex EA. Use Google and search “Forexeasystems Fx Pulse” to download free freebie that shows actual news on chart and has built-in trend detector.

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Forex Trading Psychology – 3 Easy Tips

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It is not too hard to understand why a lot of Forex traders do not succeed and lose a lot of money. This is especially true among those who are practically new in the business and find difficulty, understandably so, in even trying to get started. This can be highly stressful for anyone and obviously, stress can be the root cause of making the wrong decisions and well, losing money. The Forex trading psychology of being able to handle the stress of trading is definitely a way to deal with it, something you might find very useful.

 

Develop a trading scheme that works for you

What works for one may not work for another. One person may be very happy with his own trading method and getting the results he wants, and yet you find yourself doing exactly the same thing and get nothing. Find your own plan of action instead. Remember that a lot of the anxiety you may be experiencing could be caused by not having a dependable trading method that you have studied carefully. Once you have found it, stick with it, but don’t expect that you will always get the very best results as that would be unrealistic. Be happy with a strategy that can produce at least 65% success and work on it until it gets better.

 

Try your best to stand by your plan

I have a friend who has been in the trading business for some time now and he swears that he owes a lot of his success to staying consistent with his particular trading method. It is something that you just need to do. Not being able to get the biggest percentages you want is no reason to jump from one scheme to another. This practice is a sure way to get to nowhere. This means that if your plan works several times and fails a few, it does not follow that it is the wrong method altogether. Being patient is without a doubt, a virtue you must practice with Forex trading if you are really looking to succeed.

 

Avoid putting in money that you simply cannot afford losing

I don’t know why but I am reminded about gambling at this point. When a person gambles for fun, he only plays with money that he is not afraid of losing. Certainly, we all hope desperately to win but undue stress is caused by our own irresponsibility. I feel that this is no different with trading. It carries with it certain risks, just like any other business, and it would be to your benefit if you played it safe. Invest your money wisely.

 

Before getting into the business of Forex trading, it would be a very wise move to study it well. There is so much to learn before stepping into the risks that go with the business. It is not the same as any other market, and being wise means studying your options very carefully and asking yourself if you are prepared for it.

I’ve always been an advocate on sticking to the process and not the outcome. I write and teach people how to search people using various engines and one of the main things I’ve learned while doing that is that focusing on the process, not the outcome brings the best outcome, ironically.

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Forex trading tips and basic qualities of a successful trading

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Forex trading is becoming more and more popular nowadays and it’s no wonder why. When jobless rate is increasing and the chances to get sacked are getting bigger, everyone wants some safe and independent income with a perspective. Forex trading offers exactly that – you can trade at home, you will never be fired, no boss will be breathing over your Shoulder and the perspective is huge. In fact, there are traders making millions out there.

However, there are some issues that have to be taken into account when investing in forex. Many forex beginners open real accounts without any practicing in forex demo account and start trading without any knowledge and plan. The only outcome of this venture, or should I say “gamble” is lost money and time. Some of them experience frustration and have their high hopes crushed before even starting to feel what it’s like to trade.

So, first things come first. If you want to start trading successfully and earn some steady profits you will have to learn much about forex trading strategies, forex indicators, forex technical and fundamental analysis, money management and the like. If you have already started doing so, my forex trading tips might ease the whole learning process and clarify the most important questions.

Second – you have to use some trading strategy. There are many available on the internet, but what’s most important – you must develop and customize your own according to your character, working hours, capital amount and the like. It’s the same with anything else: buying a house, driving a car, fishing or swimming. While some methods work for me, they won’t necessarily work for you. Find your weak and strong points and use them to your advantage.

Third – trading with small amount of your invested capital is the best money management choice in this kind of business. It’s the same with anything else. Nobody builds a house in a matter of two hours or makes a car in a twinkle of an eye. It’s elaborate and complicated work which requires perfect precision and devotion. The process starts by laying brick by brick and attaching small parts to larger and complex compounds. It’s a long – haul process, with the breathtaking and inspiring results at the end. The same is applied in currency trading business. You make progress trade by trade, little by little multiplying your wining positions and accumulating your profit. It’s not about one trade that wins it all – it’s about large number of small trades that make the difference.

Fourth is the most important, though it might not seem such. It’s the emotional control and the ability to keep a balance and stop trading. The best example I can come up with is the casino. If you have ever watched movies about gambling and casinos, there is always a part where a gambler is overtaken by his brief hour of glory and success. What comes next is a direct nose dive into playing with high stakes, when the whole thing must be stopped right away. Blinded by greed, the player plays high until every penny is squeezed out of his pocket or even worse – he runs into debt. So, never let your emotions take over your plan and calculation. Always know when to stop.

These are just basic forex signals and alerts, but I have more than often seen their importance and wouldn’t ever consider ignoring them. Build your trading technique on those fundamental investment pillars and never try to get rich quickly. Instead, try to get rich slowly – there is no rush here.

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Four Reasons to Try Forex Trading

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The international Forex trading market has never been so popular, and many stock market professionals are turning away from the more traditional trading methods in favour of Forex. What is it exactly that makes the Forex market so attractive… and is it possible for a beginner to break into the Forex market with a sustainable level of success? If you’re considering starting up a Forex trading account of your own, here are four good reasons why you should go ahead and take the plunge:

1. The requirements for entering the Forex market are far less stringent than those for entering financial markets like stock trading or futures trading. Most Forex brokers MT4 will have a much lower requirement for minimum account size, and your broker will tell you just how quick and simple it is to get started – you can start trading on the very same day you open your Forex account.

2. With Forex, you can participate in foreign currency trades at any time of the day or night. The trading market is open 5 and a half days a week for 24 hours a day. This means that if Forex is an after-hours hobby, you can still find Forex trading opportunities online outside of your normal working hours. You’ll also find Forex trading offers a high level of convenience – you can trade from anywhere in the world provided you have an Internet connection.

3. Unlike futures and stock trading brokers, Forex dealers offer market analysis and news to traders for free. These companies essentially provide aspiring traders with a wealth of valuable Forex information and useful trading tools at no extra cost.

4. Most Forex brokers also offer free demo accounts; with a Metatrader 4 demo, you can gain valuable trading experience without risking your money.

Of course, it is wise to consider the potential drawbacks of the Forex trading market as well; there is no central marketplace and not much regulation, which makes it easy for unscrupulous dealers to take advantage of Forex traders. For safe trading, it is best to choose a reputable and well-known Forex dealer. It also pays to be aware of fluctuating interest rates and exchange rates when trading Forex, as these could work to your benefit or disadvantage, and may be subject to unexpected changes. These potential risks can be easily managed and should by no means deter you from trying your hand at Forex trading!

Sally Roberts is an enthusiastic writer keen to share news and opinions with others.

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Some Key Facts about Forex

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When businesses buy and sell products from countries other than their own, they have an issue of currency to deal with.  For example, the US currency is the dollar, while Japan uses the yen. However, this doesn’t have to be a problem, as the foreign exchange, commonly known as Forex, was designed to provide a solution in these situations. They also allow you to invest in the country itself, buying and selling their currency as values fluctuate, similar to stocks, but at a much bigger level. It also helps with speculation of currencies for both changes in value and changes in interest rates. Most transactions are simple, and begin when one party buys a particular quantity of one currency by paying a quantity of another currency. Following the previous example, an American company would buy a large quantity of yen from the exchange by paying US dollars. They could also buy these sums of yen and sell them back at a later date when the value of the yen inflates.

This market is unique from other markets in many ways:

  • due to its large trading volume alone, it represents the largest asset class in the world, and it has high liquidity;
  • geographically, it represents an enormous majority of the world;
  • it runs on a 24 hours schedule, minus weekends; and
  • it works around all the various factors that tend to affect the exchange rates, and it does this at a fast pace, creating high liquidity.

The forex market allows investors exclusive and lucrative opportunities for investing, such as commission-free trading and many communication methods allowing for easy accessibility. Compared to other investment options, more consumers have chosen this method of investing due to these great features.

Foreign exchange does business for countries and large corporations around the world, but also encompasses small currency exchanges, say if you travel to Europe and need Euros while on vacation. You would have to go to a kiosk and exchange your currency. The expansion of globalization has caused the numbers of these transactions to multiply. This global market is without a doubt the largest financial market in the world, and sees volumes up to billions of dollars circulating through it on a daily basis.

One huge factor that causes this market to stand apart from the stock market is its decentralization, as well as its deregulation, which allows individual buyers to choose their lenders themselves, finding the dealer with the best price that they want to do business with and cutting out the middle man. Usually, larger dealers have better access to lower pricing at the biggest banks worldwide, and will share those deals with their consumers, allowing for a cheaper exchange rate.

If you are one who is thinking of investing for your future, and know little about the topic, but do not want to pay a middle man to do it for you, this is an easy choice. With its large market, easy accessibility, and fast return rates, this is might be the option for you.

 

Article by Debbie who frequently writes about personal finance, foreign markets and currency exchange.

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How to use central banks in Forex Trading

Understanding the role which central banks play in the Forex market can be helpful for both fundamental and technical traders and investors. I find throughout my Forex trading course that depending on people’s confidence about the state of the global economy, the effect which central banks and interest rate policy makers have on the financial market can vary.  For example, imagine a stable economy with a highly predictable interest rate; such an economy will be of less concern to traders and investors across the world compared to an unstable economy such as Greece and Ireland as we’re experiencing in this current economic climate. Based on the education I received in my Forex trading course and my experience I would recommend that the main central banks to keep an eye an out for include the European Central Bank (ECB), The Bank of Japan (BOJ), The Bank of England (BOE) and finally The US Federal Reserve Board.

The decisions by the ECB mainly affect the countries within the Euro zone as well as countries such as the UK which are somewhat directly connected to the Euro zone but not part of it.  I mainly look to the ECB to identify what they prepare for their council meetings, their stance on monetary policy for the Euro area and how they exercise their regulatory powers of. The main thing to be aware of is that the ECB meets twice a month so I always keep my economic calendar up-to-date in order to avoid getting into the market when a speech or an important announcement is due. Additionally, I listen out comments by members of the governing council as their comments can move markets.

The BOE and BOJ have a Monetary Policy Committee and The Policy Board respectively; these committees are responsible for maintaining financial and monetary stability. Just as I keep an eye out for the actions of the ECB, I also attach huge significance to comments by members of the MPC for instance, as these can send markets into frenzy of speculation.

Most importantly, it is worth keeping an eye on the US because it is one of the largest economies in the world and one which most traders look to for direction. As a result I also keep up-to-date with the most current decision by the US Federal Reserve Board which is headed by Ben Bernanke. Actions and decisions by Ben Bernanke will generally affect US related currency pairs but is not limited to them as other global economies and currency pairs may also be affected.

The most important thing to keep in mind is that decisions and comments have the most impact when they are out of line with public consensus and expectations. Consequently, I aim to have no open positions or orders pending when significant news is due as the market may go into frenzy mode.

Dragan Lukic is a Forex trader at Forex Training Worldwide. Our Forex course is the most comprehensive Forex trading course for beginners to Forex. Visit www.forextrainingworldwide.com for more details or call one of our Forex mentors to see how they can help you throughout your Forex training to ensure you make money from trading the currency markets.

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