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When you are searching out an online forex trading broker, it is worth making sure that you get a broker who will send you forex alerts. This is simply an email or cellphone text message alerting you to the latest developments in the forex market. Often the broker will recommend a particular course of action in the message, which you can follow or not as you like.
Until you get into foreign exchange trading, you may not see the value of this. It's simple to explain. Forex is a 24/7 trading platform because currency trading happens in all 24 time zones across the world. This means massive opportunities for traders with billions of transactions happening every day. But it also means that, unlike stock market traders whose day ends when their national market closes at 5 or 6 pm, forex traders have to keep track of a constant flow of information.
Nobody can be watching markets 24/7. Brokers and companies can do it, of course, by employing staff on shifts, but a sole trader has to take time out. Even if you stick with just the top five markets -- US, Euro, Britain, Australia, Japan and Switzerland -- you have 15 pairs of currencies to monitor in 4 different time zones. And sometimes big money can be made on the more volatile minor currencies. If you want to have any kind of life away from your computer without missing out on the majority of opportunities, see your kids and save your marriage, the best way to manage this is by receiving alerts.
Showing posts with label Brokers Tips. Show all posts
Showing posts with label Brokers Tips. Show all posts
Wednesday, November 12, 2008
Currency Trading Investment Techniques
I wanted to take the time and talk to you about currency trading investment techniques. There is a lot of money to be made in this $3 trillion dollar a day market, but if you don't have a strong knowledge of investing than you're really jumping into rough waters without a life jacket. It is estimated that an overwhelming majority of people that enter this market are losing money and they lose for the simple reason that they jump right in without knowing how to protect themselves from a loss. I've been doing this for a few years now, so I'll share a little of what I learned.
Your broker is the most important part of trading. It is the middleman. It holds your money and it is the gatekeeper. Having the best quality broker will take a lot of headaches and anxiety away. The first point I want to make is that all brokers are not equal. There are a lot out there that are of poor quality and some which are just scams. You need to do the necessary research to find a broker that is of quality and meets your needs. The best thing you can do is use online forex forums to read about brokers. These forums are typically full of currency trading investment talk, but there are a lot about brokers.
Your broker is the most important part of trading. It is the middleman. It holds your money and it is the gatekeeper. Having the best quality broker will take a lot of headaches and anxiety away. The first point I want to make is that all brokers are not equal. There are a lot out there that are of poor quality and some which are just scams. You need to do the necessary research to find a broker that is of quality and meets your needs. The best thing you can do is use online forex forums to read about brokers. These forums are typically full of currency trading investment talk, but there are a lot about brokers.
Forex Brokers – What you Want From Them and What you Don’t
Choosing a forex broker is simple and there are services that you want and don’t want so let’s look at how to choose a forex broker that can increase your chances of forex trading success.
Your broker’s role
Your forex broker’s role is simply to transact your forex trading signals in the market smoothly and efficiently. Many traders however think they can learn forex trading from their broker or their broker can give them advice – This is NOT their function.
If brokers were good at trading and had currency trading systems that made money they would not be brokers!
Forget getting trading advice or help from a broker concentrate on the cost of doing business with them.
Spreads
You see a lot of brokers who say they deal commission free and technically they do but you pay a cost for doing business and that’s the spread. You need to keep this as tight as possible - 2 – 3 pip spreads are common now, so look for a broker who will charge at this level
Other fees
Many brokers slip in “other fees” look at these closely and never pay an additional commission to the spread.
The trading platform
If you are trading via an online forex trading platform make sure it works and is flexible, reliable and secure. A broker will normally let you test drive a forex trading platform via a demo account which is useful in terms of judging it for yourself.
Support
Look for a broker who provides around the clock support 24 hours a day 7 days a week just in case you do run into problems.
Margin and Leverage
Look at the leverage your broker will give you. A level of 200:1 is ample for most but you can get up to 400:1 with many brokers should you require it.
Guaranteed Stops
Many novice traders are nervous about trading with a forex broker sue to the unlimited losses that trading on margin can cause. With these traders in mind many forex brokers will provide guaranteed stops and negative balance protection for peace of mind.
Minimum Deposits
A few years ago it was hard to open an account for under 10,000 today you can open one online with as little as $100.00. If you are new to currency trading and simply want to dip your toe in the market then shop around.
Look for forex brokers with online payment methods as these will enable you to fund quickly and also get your profits back quickly too.
Size and standing
There are many brokers that look big but are small and don’t offer the support or service of the bigger brokers. As a general rule look for bigger brokers and see how long they have been in business and look for a minimum of 3 – 5 years.
Your FX partners
Your broker is an important part of your forex trading strategy, not from the point of view of providing trading guidance but making sure your cost of business is low and the order process is smooth.
If you follow the above tips when choosing your forex broker you will find one that right for you and who can help you maximize your FX profits.
Your broker’s role
Your forex broker’s role is simply to transact your forex trading signals in the market smoothly and efficiently. Many traders however think they can learn forex trading from their broker or their broker can give them advice – This is NOT their function.
If brokers were good at trading and had currency trading systems that made money they would not be brokers!
Forget getting trading advice or help from a broker concentrate on the cost of doing business with them.
Spreads
You see a lot of brokers who say they deal commission free and technically they do but you pay a cost for doing business and that’s the spread. You need to keep this as tight as possible - 2 – 3 pip spreads are common now, so look for a broker who will charge at this level
Other fees
Many brokers slip in “other fees” look at these closely and never pay an additional commission to the spread.
The trading platform
If you are trading via an online forex trading platform make sure it works and is flexible, reliable and secure. A broker will normally let you test drive a forex trading platform via a demo account which is useful in terms of judging it for yourself.
Support
Look for a broker who provides around the clock support 24 hours a day 7 days a week just in case you do run into problems.
Margin and Leverage
Look at the leverage your broker will give you. A level of 200:1 is ample for most but you can get up to 400:1 with many brokers should you require it.
Guaranteed Stops
Many novice traders are nervous about trading with a forex broker sue to the unlimited losses that trading on margin can cause. With these traders in mind many forex brokers will provide guaranteed stops and negative balance protection for peace of mind.
Minimum Deposits
A few years ago it was hard to open an account for under 10,000 today you can open one online with as little as $100.00. If you are new to currency trading and simply want to dip your toe in the market then shop around.
Look for forex brokers with online payment methods as these will enable you to fund quickly and also get your profits back quickly too.
Size and standing
There are many brokers that look big but are small and don’t offer the support or service of the bigger brokers. As a general rule look for bigger brokers and see how long they have been in business and look for a minimum of 3 – 5 years.
Your FX partners
Your broker is an important part of your forex trading strategy, not from the point of view of providing trading guidance but making sure your cost of business is low and the order process is smooth.
If you follow the above tips when choosing your forex broker you will find one that right for you and who can help you maximize your FX profits.
Forex and Forex Brokering - The Cheapest Way to Transfer Money Overseas
The foreign exchange market exists wherever one currency is traded for another. This is an international exchange market where simultaneous buying of one currency and selling of another is done. Currencies are traded in pairs, for example Euro/US Dollars (EUR/USD) or US Dollars/Japanese Yen (USD/JPY). It is by far the largest market in the world, in terms of cash value traded and includes trading between large banks, central banks, multinational corporations, governments and other financial market and institutions.
The foreign exchange market is unique because of its trading volume, the extreme liquidity of the market (i.e. price stability even with the fastest buying or selling), the large number and variety of traders in the market, its geographical dispersion, its long trading hours (24 hours a day - except weekends) and the variety of factors that affect exchange rates.
The minimum trading size in this market is usually $1 million, with an overall trading volume of about $1.9 trillion per day worldwide. Buying and Selling of currencies is basically for two reasons. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is mostly for profit. In fact, this market has the potential to earn almost $100,000 with an initial capital of only $500!
The ten most active traders account for almost 73% of trading volume. These are Deutsche Bank (17%), UBS (12.5%), Citigroup (7.5%), HSBC (6.4%), Barclays (5.9%), Merrill Lynch (5.7%), J.P. Morgan Chase (5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), Morgan Stanley (3.9%). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually only 1-3 pips. One pip is the smallest measure of price move used in forex trading and refers to 1/10,000 of the bid/ask spread. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 (i.e. 3 pips difference).
Although the banks get the least and most stable bid/ask spread they never offer the same rates to their customers, since their key purpose of participating in this market is for profit.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar. According to April 2004's BIS (Bank for International Settlement) study, the most heavily traded products were: EUR/USD (28 %), USD/JPY (17 %) GBP/USD (14 %). The US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%) - (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers). Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus still largely dollar-centred. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the inter-bank market.
According to the BIS study, 53% of transactions were strictly inter-dealer (i.e. inter-bank), 33% involved a dealer (i.e. a bank) and a fund manager or some other non-bank financial institution, and only 14% were between a dealer and a non-financial company. The inter-bank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.
On the other hand, retail forex brokers handle a minute fraction of the total volume of the foreign exchange market, estimated at $25-50 billion daily, which is about 2% of the whole market. In the retail forex industry market makers more often than not run two separate trading desks- one that they use to actually trade foreign exchange (essentially serving as a proprietary trading desk or "non-dealing desk") and one that is set up for the expressed purpose of off-exchange trading with retail customers (called the "dealing desk" or "trading desk"). The dealing desk operates much like the currency exchange counter at a bank. Inter-bank exchange rates, those coming in from the inter-bank system and displayed at the non-dealing desk, are adjusted to incorporate spreads that safeguard the bank's (in this instance the market maker's) profit before they are displayed in the lobby (at the dealing desk) to the retail customer. Dealing desk pricing is, therefore, not a direct reflection of the currency exchange but artificial pricing created and controlled by the originating broker.
The foreign exchange market is unique because of its trading volume, the extreme liquidity of the market (i.e. price stability even with the fastest buying or selling), the large number and variety of traders in the market, its geographical dispersion, its long trading hours (24 hours a day - except weekends) and the variety of factors that affect exchange rates.
The minimum trading size in this market is usually $1 million, with an overall trading volume of about $1.9 trillion per day worldwide. Buying and Selling of currencies is basically for two reasons. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is mostly for profit. In fact, this market has the potential to earn almost $100,000 with an initial capital of only $500!
The ten most active traders account for almost 73% of trading volume. These are Deutsche Bank (17%), UBS (12.5%), Citigroup (7.5%), HSBC (6.4%), Barclays (5.9%), Merrill Lynch (5.7%), J.P. Morgan Chase (5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), Morgan Stanley (3.9%). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually only 1-3 pips. One pip is the smallest measure of price move used in forex trading and refers to 1/10,000 of the bid/ask spread. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 (i.e. 3 pips difference).
Although the banks get the least and most stable bid/ask spread they never offer the same rates to their customers, since their key purpose of participating in this market is for profit.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar. According to April 2004's BIS (Bank for International Settlement) study, the most heavily traded products were: EUR/USD (28 %), USD/JPY (17 %) GBP/USD (14 %). The US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%) - (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers). Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus still largely dollar-centred. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the inter-bank market.
According to the BIS study, 53% of transactions were strictly inter-dealer (i.e. inter-bank), 33% involved a dealer (i.e. a bank) and a fund manager or some other non-bank financial institution, and only 14% were between a dealer and a non-financial company. The inter-bank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.
On the other hand, retail forex brokers handle a minute fraction of the total volume of the foreign exchange market, estimated at $25-50 billion daily, which is about 2% of the whole market. In the retail forex industry market makers more often than not run two separate trading desks- one that they use to actually trade foreign exchange (essentially serving as a proprietary trading desk or "non-dealing desk") and one that is set up for the expressed purpose of off-exchange trading with retail customers (called the "dealing desk" or "trading desk"). The dealing desk operates much like the currency exchange counter at a bank. Inter-bank exchange rates, those coming in from the inter-bank system and displayed at the non-dealing desk, are adjusted to incorporate spreads that safeguard the bank's (in this instance the market maker's) profit before they are displayed in the lobby (at the dealing desk) to the retail customer. Dealing desk pricing is, therefore, not a direct reflection of the currency exchange but artificial pricing created and controlled by the originating broker.
Find the Best Broker of Foreign Exchange
Foreign exchange refers to exchanging of money in one currency for another which is traded on foreign exchange market or forex. Having an average daily trade of US$ 2 trillion and above, forex is the largest trading market in the world. Everyday new investors are jumping in forex to earning substantial profits. It’s good till they garner high return on investment but what if they tumbled down in the very first effort? Well, it may happen; especially when one is not at all exposed to the odds and calculated risks of foreign exchange. Therefore, it is suggested to move with a broker of forex, who knows foreign exchange more than him. Now how to hire an honest broker of forex? You may get the answer below:
Before hiring a forex broker make sure you know his job well i.e., for what he is assigned and how much he can do for you. Your expectation should be in tune with the experience of your broker. You may find a broker of the forex market, who is chic and cool with a long list of satisfied customers. But it’s not what you want from him. Before hiring a broker of forex, you should check out the spread of the forex broker. Go through his terms and agreements. Have an insight into the stipulations of service.
Embracing a broker who promises no risk may lead you to loss. You should not go after words of such brokers as forex involves certain amount of risks because of the nature of the market. Add to this, while selecting a broker of forex or foreign exchange market, see whether the broker has mini account or not. Mini account is designed for newcomers in the online currency trading and those who have limited investment capital.
Before selecting a broker of forex market, check out the leverage option. Leverage can be expressed as a ratio that held between total capital which is available to be traded and your actual capital. Also try to find out a broker of forex market, who has expertise in offering best resources and information about foreign exchange. A good broker of foreign exchange should offer real time news, website support, meticulous data interpretation service, updated charts, technical analysis to name a few.
Forex is the largest market marked for its geographical dispersion and 24 hour activity. Your broker should also offer you 24 hour support. He should know the demand of foreign exchange and need of urgent trade agreements of forex. Check out all possible support systems offered by the broker of the forex market.
Before hiring a forex broker make sure you know his job well i.e., for what he is assigned and how much he can do for you. Your expectation should be in tune with the experience of your broker. You may find a broker of the forex market, who is chic and cool with a long list of satisfied customers. But it’s not what you want from him. Before hiring a broker of forex, you should check out the spread of the forex broker. Go through his terms and agreements. Have an insight into the stipulations of service.
Embracing a broker who promises no risk may lead you to loss. You should not go after words of such brokers as forex involves certain amount of risks because of the nature of the market. Add to this, while selecting a broker of forex or foreign exchange market, see whether the broker has mini account or not. Mini account is designed for newcomers in the online currency trading and those who have limited investment capital.
Before selecting a broker of forex market, check out the leverage option. Leverage can be expressed as a ratio that held between total capital which is available to be traded and your actual capital. Also try to find out a broker of forex market, who has expertise in offering best resources and information about foreign exchange. A good broker of foreign exchange should offer real time news, website support, meticulous data interpretation service, updated charts, technical analysis to name a few.
Forex is the largest market marked for its geographical dispersion and 24 hour activity. Your broker should also offer you 24 hour support. He should know the demand of foreign exchange and need of urgent trade agreements of forex. Check out all possible support systems offered by the broker of the forex market.
Forex Brokers - 9 Essential Points to Consider When you Open an Account
Here are 9 points to consider when choosing a Forex broker.
1. Pip Spreads Offered
Spreads between brokers vary dramatically and the difference can be as much as double so first and foremost when trading FX you need a tight spread
Transaction costs mount up - especially if you are trading frequently and impact on your profits and add to your losses. The tighter the spread, the more profits
you will make.
Today, many brokers offer 3 - 5 pips - and this is what you should look for.
2. Deposit Online & ease of account operation
Look for a broker who will take online payments to your Forex account via and secure online payment method. This is great for funding your account quickly - and getting your trading profits back to.
3. Negative Balance Protection
Leverage or gearing is one of the main reasons that people are attracted to online currency trading. Of course, leverage is a double-edged sword - and where there are high rewards, there is high risk.
With this in mind many Forex brokers now offer guaranteed stops and negative balance protection which is a big comfort to those traders who are new to the market or want to have a finite risk.
Fees for the service tend to be quite competitive and their a popular option with many traders
4. Leverage Offered
The leverage brokers will give you varies from broker to broker, but today 100 – 200:1 leverage is common and some brokers will go as high as 400:1 meaning you have the potential to leverage your account for greater FX profits
5. Other Charges & Broker assist accounts
Your only transaction cost should be the currency spread - you should NOT pay other commissions.
Avoid broker assisted accounts where a broker supposedly will help you make money from Forex trading they wont! If brokers were good traders they wouldn’t be brokers!
If you trade in this way you will lose and you will extra commissions to.
You are responsible for your FX profits so accept this fact and go with an execution only broker.
6. Investment Minimum
Today, currency trading is not just the preserve of wealthy individuals and banks - anyone can get involved and minimum deposits have dropped dramatically.
You can open a trading account online with some Forex brokers with as little as $100.00.
This means that novice traders can start off with small amounts.
7. Trading Platform
If you are trading online, you will go through a Forex trading platform.
You want ease of use and reliability – Many brokers offer demo accounts so try them out.
8. FOREX Trading Education
While you should always make your own investment decisions, it’s good to get some freebies that can help you with your Forex trading strategy such as:
• FREE trading guides
• Forex trading seminars
• Trading news and charts
• Trading recommendations & ideas
• Forex trading systems
• Trading books etc
9. Look at the overall package
When choosing a Forex broker you have a lot of choice and the above tips will help you while there are a lot of small brokers around and many are good go for someone who has been around for a while and is established.
1. Pip Spreads Offered
Spreads between brokers vary dramatically and the difference can be as much as double so first and foremost when trading FX you need a tight spread
Transaction costs mount up - especially if you are trading frequently and impact on your profits and add to your losses. The tighter the spread, the more profits
you will make.
Today, many brokers offer 3 - 5 pips - and this is what you should look for.
2. Deposit Online & ease of account operation
Look for a broker who will take online payments to your Forex account via and secure online payment method. This is great for funding your account quickly - and getting your trading profits back to.
3. Negative Balance Protection
Leverage or gearing is one of the main reasons that people are attracted to online currency trading. Of course, leverage is a double-edged sword - and where there are high rewards, there is high risk.
With this in mind many Forex brokers now offer guaranteed stops and negative balance protection which is a big comfort to those traders who are new to the market or want to have a finite risk.
Fees for the service tend to be quite competitive and their a popular option with many traders
4. Leverage Offered
The leverage brokers will give you varies from broker to broker, but today 100 – 200:1 leverage is common and some brokers will go as high as 400:1 meaning you have the potential to leverage your account for greater FX profits
5. Other Charges & Broker assist accounts
Your only transaction cost should be the currency spread - you should NOT pay other commissions.
Avoid broker assisted accounts where a broker supposedly will help you make money from Forex trading they wont! If brokers were good traders they wouldn’t be brokers!
If you trade in this way you will lose and you will extra commissions to.
You are responsible for your FX profits so accept this fact and go with an execution only broker.
6. Investment Minimum
Today, currency trading is not just the preserve of wealthy individuals and banks - anyone can get involved and minimum deposits have dropped dramatically.
You can open a trading account online with some Forex brokers with as little as $100.00.
This means that novice traders can start off with small amounts.
7. Trading Platform
If you are trading online, you will go through a Forex trading platform.
You want ease of use and reliability – Many brokers offer demo accounts so try them out.
8. FOREX Trading Education
While you should always make your own investment decisions, it’s good to get some freebies that can help you with your Forex trading strategy such as:
• FREE trading guides
• Forex trading seminars
• Trading news and charts
• Trading recommendations & ideas
• Forex trading systems
• Trading books etc
9. Look at the overall package
When choosing a Forex broker you have a lot of choice and the above tips will help you while there are a lot of small brokers around and many are good go for someone who has been around for a while and is established.
Currency Exchange Concerns
One of the country's leading economists, and Investment Editor of the Financial Times, John Authers says, "That the chances of an acute recession have receded significantly..."
Plus to the advantage of our economy and unstable currency is benefited by the chances of a recession in the US falling. Although the market isn't stable, varying prominent economists have all suggested there are suggestions of a slight improvement. In previous times leading up to a recession there has been different signals. In 2000 the ISM has fallen to 41 and a decade previous to 39.2.
Such credit squeezes on the banking systems affect our currency exchange rates; and therefore any subsequent overseas spending.
In business, such a poor exchange rate means that exports become so much more expensive. However individual clients on a personal level will find that there are two downfalls, either of which is when we exchange our money into other currencies.
For those who travel there is an upside and a downside. For those choosing to travel to Europe will find a downside as their purchase of holiday spends into Euros will be drastically reduced if compared to previous years. Those traveling to the US will discover the upside and their pound will get them more dollars.
The other downside is for those individuals choosing this year to re-locate into Europe, more especially those countries that have adopted the euro. Imagine for one moment those with a £100,000... In July of 2007 they would get around 142,000 Euros; today however they would only get 122,000 euros. That's a difference of 20,000 Euros. That of course could be the difference between 2nd or a third bedroom, or a finca and a small apartment.
Currency Brokers have seen an upsurge in business, in a natural way, as people find a need to work harder in getting the best out of their money. Our High Street Banks, although they do change large amounts of currency, cannot compete with the Currency Broker. Lower overheads and fewer staff help to trim off their costs.
Currency Brokers charge less than 1% as opposed to the hefty 3 to 4% charged by the banks. This may not sound much until you consider exchanging £100,000; that would be a nice 'shareholders meeting bubbly session' costing almost £4,000, if you catch my humour.
Plus to the advantage of our economy and unstable currency is benefited by the chances of a recession in the US falling. Although the market isn't stable, varying prominent economists have all suggested there are suggestions of a slight improvement. In previous times leading up to a recession there has been different signals. In 2000 the ISM has fallen to 41 and a decade previous to 39.2.
Such credit squeezes on the banking systems affect our currency exchange rates; and therefore any subsequent overseas spending.
In business, such a poor exchange rate means that exports become so much more expensive. However individual clients on a personal level will find that there are two downfalls, either of which is when we exchange our money into other currencies.
For those who travel there is an upside and a downside. For those choosing to travel to Europe will find a downside as their purchase of holiday spends into Euros will be drastically reduced if compared to previous years. Those traveling to the US will discover the upside and their pound will get them more dollars.
The other downside is for those individuals choosing this year to re-locate into Europe, more especially those countries that have adopted the euro. Imagine for one moment those with a £100,000... In July of 2007 they would get around 142,000 Euros; today however they would only get 122,000 euros. That's a difference of 20,000 Euros. That of course could be the difference between 2nd or a third bedroom, or a finca and a small apartment.
Currency Brokers have seen an upsurge in business, in a natural way, as people find a need to work harder in getting the best out of their money. Our High Street Banks, although they do change large amounts of currency, cannot compete with the Currency Broker. Lower overheads and fewer staff help to trim off their costs.
Currency Brokers charge less than 1% as opposed to the hefty 3 to 4% charged by the banks. This may not sound much until you consider exchanging £100,000; that would be a nice 'shareholders meeting bubbly session' costing almost £4,000, if you catch my humour.
Tips For Selecting A Forex Broker
Would you like a piece of the largest market in the world? What is it and how do I get it? It is the Currency of Forex Market. To actually start trading Forex one of the first things you will need to commence is select a forex broker. Selecting a forex broker will be a key decision in your future forex trading success. Getting it wrong now may lead to problems down the road.
Before you select an online Forex broker, you as a new investor should carry out your due diligence and carefully check the services offered by a broker and the operational policies by which they conduct themselves.
It is important that you are aware that as with any business there are scammers out there looking to trick you into handing over your money without providing the service they advertise. Do some research into the broker you are looking to use.
There are at least 20 online foreign exchange brokers nowadays. When deciding on who to choose you should try the demos of around 6-8 to get a feel for their trading platform.
Using the demo platform is also a valuable learning tool as is most cases the forex broker's demo uses live data. The only difference is that you are using a paper account and not real money.
Some things to consider when selecting a forex broker include:
* The broker's hours of operation
* the minimum trading unit size
* the bid/ask pip spread on major currency pairs
* the reliability of the forex trading software
* is there a phone line backup to the forex trading software?
To execute trades you will need software that allows you to place by or sell orders. Other forex related software is used for either providing forex trading signals or providing graphical information (charting), which is used to analyse data. The forex trading software provided by your broker is normally free. The forex signal software would typically come on a subscription basis. With forex charting software there are both free and subscription options.
Once you have your trading account opened and have installed the forex trading software you will be ready to place some orders. They would include some of the following:
Market orders - this is an order to buy or sell at the current market price
Limit orders - this order is placed to buy or sell at a certain price as the market price moves up or down
Limit entry orders - this order is executed when the exchange rate touches a specific level without breaking that level
Stop-loss orders - this is a type of limit order linked to a specific order aimed at stopping the order when a loss level is reached
Before you select an online Forex broker, you as a new investor should carry out your due diligence and carefully check the services offered by a broker and the operational policies by which they conduct themselves.
It is important that you are aware that as with any business there are scammers out there looking to trick you into handing over your money without providing the service they advertise. Do some research into the broker you are looking to use.
There are at least 20 online foreign exchange brokers nowadays. When deciding on who to choose you should try the demos of around 6-8 to get a feel for their trading platform.
Using the demo platform is also a valuable learning tool as is most cases the forex broker's demo uses live data. The only difference is that you are using a paper account and not real money.
Some things to consider when selecting a forex broker include:
* The broker's hours of operation
* the minimum trading unit size
* the bid/ask pip spread on major currency pairs
* the reliability of the forex trading software
* is there a phone line backup to the forex trading software?
To execute trades you will need software that allows you to place by or sell orders. Other forex related software is used for either providing forex trading signals or providing graphical information (charting), which is used to analyse data. The forex trading software provided by your broker is normally free. The forex signal software would typically come on a subscription basis. With forex charting software there are both free and subscription options.
Once you have your trading account opened and have installed the forex trading software you will be ready to place some orders. They would include some of the following:
Market orders - this is an order to buy or sell at the current market price
Limit orders - this order is placed to buy or sell at a certain price as the market price moves up or down
Limit entry orders - this order is executed when the exchange rate touches a specific level without breaking that level
Stop-loss orders - this is a type of limit order linked to a specific order aimed at stopping the order when a loss level is reached
When Searching for a Forex Broker
Forex brokers are valuable to those that wish to enter into a forex currency trading. With the advent of online businesses assisted by the technology of the Internet, online forex brokers are popping up like plants in the World Wide Web because of the ease and inexpensive ways of establishing a corporate appearance. If you are a novice forex trader, you need a very good broker at your side. However, with so many of them to choose from, what should you look for in a broker?
First, brokers should offer competitive spreads, or the difference between the selling and buying prices of a certain currency. Good forex brokers offer anywhere between 3 and 5 pips, the ideal spreads that can make sure you are gaining from your investment. Avoid as much as possible those brokers that offer variable spreads, as you may find a spread that suddenly widens during a busy market, which is where you would gain money, but only if the market is bullish.
Another good indication of a reliable broker is one who uses a secure online connection to take payments and funding for your forex currency account. This ensures smooth trading, because you don’t have to make time-consuming e-commerce transactions just to get money into your account, and another transaction to transfer profits to your bank account. Remember, you don’t only trade, but you also have to look at forex brokers’ data in order to make decisions. You don’t have the time to make time-consuming transactions in between.
Next, as a way to maximize your potential profits when engaging in the trade, you need to have a broker that will grant a leverage of about 200:1. This is the ideal leverage that forex brokers should have; however, there are some that offer higher leverages. These leverages even reach 400:1 as a maximum, offering your higher potential profits from your forex currency trade.
Of course, you should not be paying brokers extra charges beside the forex currency spread. This is where brokers earn money, and nothing else. Avoid those brokers that charge brokerage commissions because by law, these brokers are not allowed to make charges such as these commissions as well as anything else. You should only be paying for the information they give you, and that is the currency spread.
Of course, there is the unspoken rule of verifying the legitimacy of your broker. By law, all brokers are required to register with the Futures Commission Merchant. Check with this agency if any potential brokers you have in mind have a record in their database. You can also check if there is any derogatory information in the Commodity Futures Trading Commission, the agency regulating forex brokers, before you entrust your forex currency trading with any of them.
First, brokers should offer competitive spreads, or the difference between the selling and buying prices of a certain currency. Good forex brokers offer anywhere between 3 and 5 pips, the ideal spreads that can make sure you are gaining from your investment. Avoid as much as possible those brokers that offer variable spreads, as you may find a spread that suddenly widens during a busy market, which is where you would gain money, but only if the market is bullish.
Another good indication of a reliable broker is one who uses a secure online connection to take payments and funding for your forex currency account. This ensures smooth trading, because you don’t have to make time-consuming e-commerce transactions just to get money into your account, and another transaction to transfer profits to your bank account. Remember, you don’t only trade, but you also have to look at forex brokers’ data in order to make decisions. You don’t have the time to make time-consuming transactions in between.
Next, as a way to maximize your potential profits when engaging in the trade, you need to have a broker that will grant a leverage of about 200:1. This is the ideal leverage that forex brokers should have; however, there are some that offer higher leverages. These leverages even reach 400:1 as a maximum, offering your higher potential profits from your forex currency trade.
Of course, you should not be paying brokers extra charges beside the forex currency spread. This is where brokers earn money, and nothing else. Avoid those brokers that charge brokerage commissions because by law, these brokers are not allowed to make charges such as these commissions as well as anything else. You should only be paying for the information they give you, and that is the currency spread.
Of course, there is the unspoken rule of verifying the legitimacy of your broker. By law, all brokers are required to register with the Futures Commission Merchant. Check with this agency if any potential brokers you have in mind have a record in their database. You can also check if there is any derogatory information in the Commodity Futures Trading Commission, the agency regulating forex brokers, before you entrust your forex currency trading with any of them.
Online Forex Brokers - for Novice Traders
Will you make money at currency trading? This is a question most traders try and answer by trading a demo account - but the problem with demo accounts is there is no pressure, i.e no money on the line and it proves nothing.
Most traders who make money with demo account lose when they open an account with a forex broker. Now there is a fantastic way for traders to see if they have what it takes. There is a new account called a protected account and it acts as a bridge between a demo and a full trading account. The concept is:
The Protected Account works as a funded demo account in which the client pre-determines their risk level. Among its features are:
-Trade up to 100 times your initial deposit, even with a negative balance.
- Make as many trades as desired, 24 hours a day, using any currency pair.
- At the end of the a set period, (normally two weeks) any positive balance is the clients to keep the broker covers the losses.
This has significant advantages over a demo account, as it simulates the feeling of trading real money on the Foreign Exchange and let's face it when money is on the line we feel and act differently.
Trading is probably 20&% method and 89% mindset and it's a fact that most traders fail because they don't trade with discipline.
The Protected Account acts as a bridge between a demo account and a real one, providing an authentic trading experience, but of course the risk is managed and a huge advantage is - even if you go debit on the first day you can still keep trading so you get plenty of trades and plenty of practice.
Most traders who make money with demo account lose when they open an account with a forex broker. Now there is a fantastic way for traders to see if they have what it takes. There is a new account called a protected account and it acts as a bridge between a demo and a full trading account. The concept is:
The Protected Account works as a funded demo account in which the client pre-determines their risk level. Among its features are:
-Trade up to 100 times your initial deposit, even with a negative balance.
- Make as many trades as desired, 24 hours a day, using any currency pair.
- At the end of the a set period, (normally two weeks) any positive balance is the clients to keep the broker covers the losses.
This has significant advantages over a demo account, as it simulates the feeling of trading real money on the Foreign Exchange and let's face it when money is on the line we feel and act differently.
Trading is probably 20&% method and 89% mindset and it's a fact that most traders fail because they don't trade with discipline.
The Protected Account acts as a bridge between a demo account and a real one, providing an authentic trading experience, but of course the risk is managed and a huge advantage is - even if you go debit on the first day you can still keep trading so you get plenty of trades and plenty of practice.
Forex Brokers - Helping to Maximize Your Success
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair.
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair.
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
Sunday, July 13, 2008
8 Basic Tips on Choosing Best Forex Broker
8 Basic Tips on Choosing Best Forex Broker
Author: Mostafa Soleimanzadeh Author Ranking Blue | Posted: 01-11-2007 | Comments: 0 | Views: 7 | Rating: (50) Article Popularity - Green (?) Got a Question? Ask.
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See Your Money Gaining. Make Gold Online With Our Forex
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Mostafa Soleimanzadeh
There are some basic notices that you should consider when you want choosing online forex broker.
#1- Spread Amount
The spread, which is calculated in pips, is the difference between how much you can buy or sell a currency at a specific point in time.
Forex currencies are not traded through a central exchange market, so the spread can be different depending on the forex broker you use. Some online forex brokers have variable spread; some of them have two spread amounts that depend to day and night.
Some of them their spread depends to the position of market. When market is quiet the spread is small and when market is busy the spread is high. I prefer forex brokers that have fixed spread, because over the long term fixed can be safer.
#2- Execution
- How fast is the broker's order execution?
- Do they offer automatic execution?
- How much can you trade before having to request a quote?
- Do they trade against their clients?
The best way to find out is to open a demo account and give them a test drive.
#3- Leverage Options
Leverage is expressed as a ratio between the total capital that is available to be traded and your actual capital. For example, when you have a ratio of 100:1, your forex broker will lend you $100 for every $1 of actual capital you have. Leverage is a necessity in forex trading because the price deviations in the currencies are set at fractions of a cent.
Before choosing an online forex broker notice that what is their leverage. Many brokerages offer a flexible margin that allows you to choose the leverage that's right for you.
#4- Account Types
Notice the forex broker you choose has mini account or not. Mini account is designed for those new to online currency trading and those with limited investment capital. There is a smaller deposit required to start trade of just $300 or less.
#5- Trading Platform
Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it.
#6- Dealing tools and value-added services
Find out online forex broker that offers the best resources and information to help you make the smartest trading decisions. A good company should offer real-time charts, technical analysis tools, real-time news and data, and software or website support. Be weary of any company that refuses to share information or trial versions before opening up an account. You will want to try out their system before you choose to invest money in it.
#7- Support
Forex is a 24 hour market, so your online forex broker should offer 24 hour support. You should also check if you can close positions over the phone - essential in case your PC or internet connection crash at a critical moment. You could contact to their Internet help desks to see how quickly they respond to enquiries.
#8- Get Referrals
Ask around and read forex forums to find out which forex brokers other people use and why they selected a specific broker.
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Mostafa Soleimanzadeh
There are some basic notices that you should consider when you want choosing online forex broker.
#1- Spread Amount
The spread, which is calculated in pips, is the difference between how much you can buy or sell a currency at a specific point in time.
Forex currencies are not traded through a central exchange market, so the spread can be different depending on the forex broker you use. Some online forex brokers have variable spread; some of them have two spread amounts that depend to day and night.
Some of them their spread depends to the position of market. When market is quiet the spread is small and when market is busy the spread is high. I prefer forex brokers that have fixed spread, because over the long term fixed can be safer.
#2- Execution
- How fast is the broker's order execution?
- Do they offer automatic execution?
- How much can you trade before having to request a quote?
- Do they trade against their clients?
The best way to find out is to open a demo account and give them a test drive.
#3- Leverage Options
Leverage is expressed as a ratio between the total capital that is available to be traded and your actual capital. For example, when you have a ratio of 100:1, your forex broker will lend you $100 for every $1 of actual capital you have. Leverage is a necessity in forex trading because the price deviations in the currencies are set at fractions of a cent.
Before choosing an online forex broker notice that what is their leverage. Many brokerages offer a flexible margin that allows you to choose the leverage that's right for you.
#4- Account Types
Notice the forex broker you choose has mini account or not. Mini account is designed for those new to online currency trading and those with limited investment capital. There is a smaller deposit required to start trade of just $300 or less.
#5- Trading Platform
Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it.
#6- Dealing tools and value-added services
Find out online forex broker that offers the best resources and information to help you make the smartest trading decisions. A good company should offer real-time charts, technical analysis tools, real-time news and data, and software or website support. Be weary of any company that refuses to share information or trial versions before opening up an account. You will want to try out their system before you choose to invest money in it.
#7- Support
Forex is a 24 hour market, so your online forex broker should offer 24 hour support. You should also check if you can close positions over the phone - essential in case your PC or internet connection crash at a critical moment. You could contact to their Internet help desks to see how quickly they respond to enquiries.
#8- Get Referrals
Ask around and read forex forums to find out which forex brokers other people use and why they selected a specific broker.
Rate this Article:
*
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Current: 0 / 5 stars - 0 vote(s).
Article Tags: Best Stock Broker
Article Source: http://www.articlesbase.com/finance-articles/8-basic-tips-on-choosing-best-forex-broker-249346.html
Print this Article Print article Email to a Friend Send to friend Publish this Article on your Website Publish this Article Send Author Feedback Author feedback
About the Author:
By Mostafa Soleimanzadeh. Learn Forex Trading Online in his website.
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!
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When building a new custom home, either as an owner builder or with a general contractor, you'll need to decide on the right home plans. Do you buy stock blueprints or have them custom designed? Choosing incorrectly can lead to unforeseen construction costs that will blow your budget.
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More from Mostafa Soleimanzadeh
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By: Mostafa Soleimanzadeh | 17/10/2007 | Finance
In part one of this article, I noticed some advantages of technical analysis and emphasized that technical analysis is superior to fundamental analysis. At the end of this article, I've put the link to part one.
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By: Mostafa Soleimanzadeh | 03/07/2007 | Investing
why technical analysis is superior to fundamental analysis.
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By: Mostafa Soleimanzadeh | 23/03/2007 | Investing
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By: Mostafa Soleimanzadeh | 23/03/2007 | Investing
Fibonacci is known for discovering a series of numbers that was called after him the Fibonacci numbers or the Fibonacci sequence.
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It is important to know that markets environment isn't like other social environment in your every day life. To become successful in markets environment you require a very high degree of self-control and self-trust.
How to Get a Good Forex Broker for a Winning Forex Trading
Foreign exchange means exchanging of one currency for another in foreign exchange market or forex. With an average daily trade of US$ 2 trillion and above, forex market is hailed as the largest market for trading in the world. With an aim to earn substantial profit, new investors are jumping in the market everyday. Investors, who move with information and basic knowledge definitely earn high return on their investment. However there are cases, when investors fail to do anything great in the market because of lack of information and awareness regarding a winning foreign exchange trading. Thus, it is suggested to select a forex broker before landing in forex market. A forex broker can understand things better than a new trader and can prove out to be a great help for the latter. Now, how to select a good forex broker for a winning foreign exchange trading? A few tips are given below:
While selecting a forex broker, make sure he is the right person for you. It is not a tedious task to find out a foreign exchange broker with a long list of customers. But it is not enough for you. You should judge him by having an insight into his service and conditions. Understanding of his terms and conditions will help you penetrate his working in an in-depth manner.
It is not good to believe a foreign exchange broker, who promises no risk. Being an awakened foreign exchange trader, you should not go after words of such high toned forex brokers. It is because, foreign exchange involves certain risks. Thus apply your reason while selecting a forex broker. Apart from this, it is also suggested to check out whether your forex broker has mini account or not. Mini account is actually designed for those, who have limited investment capital and who are new to online currency trading.
While selecting a forex broker for your foreign exchange trading, it is better to find out the leverage option. Leverage can be articulated as a ratio held between total capital which is available to be traded and your actual capital. You should also find out a forex broker, who has the capability to offer real time information and best resources about foreign exchange. A good forex broker usually offers up to date news regarding fx trading. He offers 24 hours website support, updated charts, data interpretation services to name a few.
Foreign exchange market is known for its high trading volume. It is active 24 hours, except the weekends. Considering the fact, you should also select a forex broker, who offers you 24 hour support regarding foreign exchange trading. With 24 hour support from your forex broker, you can analyze the market from its root with every latest development.
To get the best forex broker for your foreign exchange trading, you should ask around. Ask those, who have experience in the foreign exchange trading. They can suggest you the best broker. You can also check out the online forex firms, who offer foreign exchange brokers. With their assistance, you can easily come up with a good forex broker, who is pledged to deliver the best.
While selecting a forex broker, make sure he is the right person for you. It is not a tedious task to find out a foreign exchange broker with a long list of customers. But it is not enough for you. You should judge him by having an insight into his service and conditions. Understanding of his terms and conditions will help you penetrate his working in an in-depth manner.
It is not good to believe a foreign exchange broker, who promises no risk. Being an awakened foreign exchange trader, you should not go after words of such high toned forex brokers. It is because, foreign exchange involves certain risks. Thus apply your reason while selecting a forex broker. Apart from this, it is also suggested to check out whether your forex broker has mini account or not. Mini account is actually designed for those, who have limited investment capital and who are new to online currency trading.
While selecting a forex broker for your foreign exchange trading, it is better to find out the leverage option. Leverage can be articulated as a ratio held between total capital which is available to be traded and your actual capital. You should also find out a forex broker, who has the capability to offer real time information and best resources about foreign exchange. A good forex broker usually offers up to date news regarding fx trading. He offers 24 hours website support, updated charts, data interpretation services to name a few.
Foreign exchange market is known for its high trading volume. It is active 24 hours, except the weekends. Considering the fact, you should also select a forex broker, who offers you 24 hour support regarding foreign exchange trading. With 24 hour support from your forex broker, you can analyze the market from its root with every latest development.
To get the best forex broker for your foreign exchange trading, you should ask around. Ask those, who have experience in the foreign exchange trading. They can suggest you the best broker. You can also check out the online forex firms, who offer foreign exchange brokers. With their assistance, you can easily come up with a good forex broker, who is pledged to deliver the best.
Forex Brokers – What I Learned as a Broker Trading 5,000 Clients
I spent 10 years as a forex broker and traded thousands of clients, here I will give you a broker’s view of trading clients.
I will reveal who won, who lost, how we made money and how we treated them.
I joined as a rather green salesman and had no idea about the reality of forex and futures trading.
I was excited about joining an industry where millions were made and millions were lost by clients – It was very exciting!
The company
I was rather shocked at the reality which was:
Clients didn’t appear to win very often and the company based its balance sheet on commission to equity.
The view was that about 95% of clients would lose and they would do it all on their own, with no help from us.
The clients we liked (from a financial perspective) were the ones who made commission for the company and top of the list were:
Day traders:
They lasted for short periods, never won and made loads of money for the company.
If they believed it worked, let them get on with it and we would take the commission.
Shoot from the hip traders
The action men.
They loved the buzz, in and out all the time, trading the news and advice from gurus and with no discipline.
Again, they wiped themselves out and made us plenty of money.
The company did not dislike its clients.
We treated all clients well and did what a good broker should:
Help them with queries and made sure they got fast accurate executions.
We just let them do as they wanted and in most cases they lost – that’s simply the reality of trading.
The clients
We had clients from all walks of life, from retired people, to highly educated mathematicians and the few that did win surprised me.
The ones I personally hated were the ones I will refer to as “educated fools”
Cocky as anything and believed they had a divine right to win, because they were clever.
They would ignore my warnings, that they would not win with systems that were too complicated and tell me to mind my own business.
If I am honest, when they learned the reality of a wipe out, I felt a little inclination to say “told you so”, but never did.
Perhaps my favorite client was a retired lady, 81 years of age, who lived on a sheep farm in Australia.
A lovely lady and she taught me a few things, that I remember to this day.
She devised a system and showed it to me.
It was a simple buy and sell strategy and relied on holding big trends for months on end and you could learn it in a few hours.
Personally I thought it was to simple to work, but she built a $5,000 account to $39,000 in three months and had passed $100,000 in under a year.
She drew her charts by hand ( this was the late eighties) and didn’t have a TV and never read the papers.
Each day she would check her prices draw her charts and make her trades if she needed to.
A polite, humble trader, who was loved in the office by all.
We all had respect for the way she was our most profitable trader, even above some quite well known money managers.
We had many other clients.
Most lost and some won ( very few), but the ones who did win were humble, had simple systems, traded only when their systems told them to, had iron discipline and believed they were right.
This is just my experience.
I did trade a lot of people.
They from all walks of life and I learned very few won, but the ones who did, kept it simple, the ones who didn’t, had big ego’s, or liked excitement and traded with their emotions lost.
I will reveal who won, who lost, how we made money and how we treated them.
I joined as a rather green salesman and had no idea about the reality of forex and futures trading.
I was excited about joining an industry where millions were made and millions were lost by clients – It was very exciting!
The company
I was rather shocked at the reality which was:
Clients didn’t appear to win very often and the company based its balance sheet on commission to equity.
The view was that about 95% of clients would lose and they would do it all on their own, with no help from us.
The clients we liked (from a financial perspective) were the ones who made commission for the company and top of the list were:
Day traders:
They lasted for short periods, never won and made loads of money for the company.
If they believed it worked, let them get on with it and we would take the commission.
Shoot from the hip traders
The action men.
They loved the buzz, in and out all the time, trading the news and advice from gurus and with no discipline.
Again, they wiped themselves out and made us plenty of money.
The company did not dislike its clients.
We treated all clients well and did what a good broker should:
Help them with queries and made sure they got fast accurate executions.
We just let them do as they wanted and in most cases they lost – that’s simply the reality of trading.
The clients
We had clients from all walks of life, from retired people, to highly educated mathematicians and the few that did win surprised me.
The ones I personally hated were the ones I will refer to as “educated fools”
Cocky as anything and believed they had a divine right to win, because they were clever.
They would ignore my warnings, that they would not win with systems that were too complicated and tell me to mind my own business.
If I am honest, when they learned the reality of a wipe out, I felt a little inclination to say “told you so”, but never did.
Perhaps my favorite client was a retired lady, 81 years of age, who lived on a sheep farm in Australia.
A lovely lady and she taught me a few things, that I remember to this day.
She devised a system and showed it to me.
It was a simple buy and sell strategy and relied on holding big trends for months on end and you could learn it in a few hours.
Personally I thought it was to simple to work, but she built a $5,000 account to $39,000 in three months and had passed $100,000 in under a year.
She drew her charts by hand ( this was the late eighties) and didn’t have a TV and never read the papers.
Each day she would check her prices draw her charts and make her trades if she needed to.
A polite, humble trader, who was loved in the office by all.
We all had respect for the way she was our most profitable trader, even above some quite well known money managers.
We had many other clients.
Most lost and some won ( very few), but the ones who did win were humble, had simple systems, traded only when their systems told them to, had iron discipline and believed they were right.
This is just my experience.
I did trade a lot of people.
They from all walks of life and I learned very few won, but the ones who did, kept it simple, the ones who didn’t, had big ego’s, or liked excitement and traded with their emotions lost.
Forex Brokers - an Essential, Low Risk Service for Novice Traders
If you are wondering if you can succeed at forex trading and don't want to have the full risk involved with a full forex account but want something more challenging than a demo account, then forex brokers are offering an essential service you should consider. Let's take a look at it.
Firstly, a demo account is of little or no use in proving that you have what it takes to make money in forex trading. The reason for this is there is one essential ingredient missing - the pressure of trading real money. Forex is a pressure game and that feeling is created by having real money at risk.
Today there is a new service offered by forex brokers called a protected account.
These accounts act as a bridge between a demo account and a full forex trading account.
Here are its salient features:
- You start with a small balance.
- You trade a set leverage for the duration of the account (even if you are in debit) which is normally a few weeks.
- At the end of the period any profits are yours to keep.
- If there is a loss then the broker covers it.
This means you get plenty of practice, you have a set risk and you have the incentive of knowing any profits made are yours to keep.
This gives you the experience of trading real money and limited risk.
These accounts will give you a far better chance of finding out if you have what it takes to succeed in forex trading, than a demo account.
A demo account is really only useful for learning the mechanics of trading and nothing else.
Keep in mind forex trading is not just about having a method - it's about having the discipline to apply your method.
Its lack of discipline under pressure which causes the bulk of forex traders to lose.
Keep in mind if you don't have the discipline to apply your method, you really have no method in the first place.
Forex brokers over the last few years have started to provide a lot of services to help traders maximize their trading experience and this service is a good one for all novice forex traders to consider.
A protected account gives a more authentic trading experience than a forex demo account and with limited risk, is an option all novice forex traders should consider.
Firstly, a demo account is of little or no use in proving that you have what it takes to make money in forex trading. The reason for this is there is one essential ingredient missing - the pressure of trading real money. Forex is a pressure game and that feeling is created by having real money at risk.
Today there is a new service offered by forex brokers called a protected account.
These accounts act as a bridge between a demo account and a full forex trading account.
Here are its salient features:
- You start with a small balance.
- You trade a set leverage for the duration of the account (even if you are in debit) which is normally a few weeks.
- At the end of the period any profits are yours to keep.
- If there is a loss then the broker covers it.
This means you get plenty of practice, you have a set risk and you have the incentive of knowing any profits made are yours to keep.
This gives you the experience of trading real money and limited risk.
These accounts will give you a far better chance of finding out if you have what it takes to succeed in forex trading, than a demo account.
A demo account is really only useful for learning the mechanics of trading and nothing else.
Keep in mind forex trading is not just about having a method - it's about having the discipline to apply your method.
Its lack of discipline under pressure which causes the bulk of forex traders to lose.
Keep in mind if you don't have the discipline to apply your method, you really have no method in the first place.
Forex brokers over the last few years have started to provide a lot of services to help traders maximize their trading experience and this service is a good one for all novice forex traders to consider.
A protected account gives a more authentic trading experience than a forex demo account and with limited risk, is an option all novice forex traders should consider.
Saturday, July 12, 2008
How To Pick A Good Forex Broker
Debt Management
www.trapped.co.uk |
If you are doing forex trading, then you know the importance of a good forex broker. This is especially true if you are just starting out and do not have a lot of experience. A good forex trader will work with you and provide the information and tips you need to make the best trading.
Even though your forex broker will be offering you tips and advice, they do not make the final decision to buy or sell. You do. Therefore it is important you know what you want and make your own decision. It is ok to ask a lot of newbie forex questions to your broker if you are new to forex trading but make your own mind and accept the results.
As you can see, a good forex broker is important as you will be seeking his/her advice and you certainly want someone who's the best in the forex business. So how do you go about choosing one? Here are some tips to help you
1. Registered Forex Broker.
It is important that your forex broker is a registered member of a financial institution. Ask for his/her credentials. You want the assurance that he/she will be able to act on your decision and access the funds needed.
Check with the NFA (National Futures Association) if you doubt your forex broker is registered.
2. On-call Broker.
Your forex broker should remain in contact at all times. Whether it be via cell phone, email, instant messaging etc. Your broker should know forex trading is a 24 hour standby job and fluctuations in trading can happen quite quickly. Therefore it is important you can get hold of your forex broker when you need him/her
3. Experienced Broker.
Before you select a forex broker, ask for his/her references. Call those references and ask them about their opinions on the forex trader. By doing this, you can assert whether the forex broker is experienced and whether he/she is able to execute a trade effectively and successfully.
It would be best to contact more than one references to get an accurate feedback on the forex broker.
4. Cost of Broker
Many people when looking for a forex broker are overly concerned about the cost. Usually more experienced forex brokers as well as those with a good track record of successful trades demand a higher price.
My recommendation is to select a few forex brokers that you are comfortable with, have credentials, have a proven good track record. Once you have done that, then you can talk about cost.
Forex Broker Advice
Do you want to make more money? Investing money is what you should be looking to do. Investing money in Forex broker advice is going to help you build your nest egg, build your wealth and it only takes a few minutes of your times. Using Forex broker advice, you are going to be able to find an investment that will make your money grow faster than a savings account.
A Forex account is an investment in the foreign exchange market. Forex broker advice is going to be all the advice you need about how to get started, where you can invest your money, when you should start investing in Forex systems.
Following your Forex broker advice you will be able to earn interest on the money you invest. You will find it easily to build a retirement plan, and you will be investing in companies that you can research so you always know where your money is going to be used. Forex broker advice is going to be all about how much money you should invest, why you should consider Forex investing instead of stocks, and Forex broker advice is going to be based on solid business decisions that will help you learn the foreign investing world.
Your Forex broker advice is going to be the best advice you will get about the foreign markets. There are so many changes in the market every day and a broker is going to be more apt to read up and be able to tell you where you should invest, and when to pull your money to put it somewhere else. Some people do not like to listen to Forex broker advice, and will like to learn the ropes on their own. That is ok too, but you should know that it would be difficult to learn all the things that a broker can do for you in the Forex market.
To get involved with the Forex market you first want to find a broker. Not all stockbrokers are going to be brokers involved in the Forex markets. Forex broker advice will be found with those companies that deal in foreign markets, such as larger banks, larger investment companies, not many small investment companies actually deal with Forex systems, or have Forex broker advice to offer investors. Start now by reading more about where you can find a Forex systems broker, and then determine which company you want to deal with. From there, you can get involved in making a new nest egg for your family, your retirement or even both!
A Forex account is an investment in the foreign exchange market. Forex broker advice is going to be all the advice you need about how to get started, where you can invest your money, when you should start investing in Forex systems.
Following your Forex broker advice you will be able to earn interest on the money you invest. You will find it easily to build a retirement plan, and you will be investing in companies that you can research so you always know where your money is going to be used. Forex broker advice is going to be all about how much money you should invest, why you should consider Forex investing instead of stocks, and Forex broker advice is going to be based on solid business decisions that will help you learn the foreign investing world.
Your Forex broker advice is going to be the best advice you will get about the foreign markets. There are so many changes in the market every day and a broker is going to be more apt to read up and be able to tell you where you should invest, and when to pull your money to put it somewhere else. Some people do not like to listen to Forex broker advice, and will like to learn the ropes on their own. That is ok too, but you should know that it would be difficult to learn all the things that a broker can do for you in the Forex market.
To get involved with the Forex market you first want to find a broker. Not all stockbrokers are going to be brokers involved in the Forex markets. Forex broker advice will be found with those companies that deal in foreign markets, such as larger banks, larger investment companies, not many small investment companies actually deal with Forex systems, or have Forex broker advice to offer investors. Start now by reading more about where you can find a Forex systems broker, and then determine which company you want to deal with. From there, you can get involved in making a new nest egg for your family, your retirement or even both!
Forex Brokers - Friend or Foe?
There are many misconceptions about forex brokers, many people think they should be seen as friends, others think their just a necessary evil - but their neither. Lets look at selecting a forex broker and what you need to look for in terms of services.
So why do people think forex brokers are to be seen as the enemy?
You get a lot of traders who think brokers pick stops and these are mostly involved in day trading and the fact is their logic is flawed and their stops are to close.
A broker doesn't need to pick off stops as these traders lose anyway as the odds are not in favor of day traders.
Others seek advice from their brokers - why?
If brokers could make money trading they wouldn't be brokers!
Never ever fall for the idea of having a broker assist you with your trades, you need to do this yourself and take responsibility for your actions.
3 Essential Points to Consider
You're only interested in 3 main points.
1. Forget the Words: Commission Free - You Pay!
You pay a broker in the pip spread - this is your cost of doing business.
Make sure you pay no more than 2 - 3 pips on the major currencies and if you shop around, you will find brokers offering these spreads.
2. Security
Don't trade with small or new brokers. Make sure you broker is stable, been in business for a while and has the facility to offer 24 hour trading and of course support, should you run into technical problems.
3. Trading Platform
This is your gateway to the forex market place and it needs to be reliable and easy to use. Today, most of the big brokers offer great trading platforms.
You can almost always test drive them with a forex demo account - so do this until you are comfortable with it.
Other Considerations Are:
4. How quickly you can fund your account?
Do they offer credit card facilities and how quickly can you withdraw.
5. Leverage
Most brokers offer more than enough leverage and you can easily get 100:1 (which is way more than enough for most traders) but you can get up to 400:1. A word of caution - don't use to much leverage it's the reason most novice forex traders wipe themselves out.
6. Other Extras
Many brokers will offer you free technical tools, books etc and some are useful some are not but that's down to individual preference and should not be a major consideration in opening an online forex trading account.
A Great New Service!
All brokers will offer you a forex demo account to test your trading skills but there is a new service that's great for novice forex traders and it's called a protected account.
Demo accounts show you the basics - however there is no money on the line.
Protected accounts are different - they allow you to get a feel for trading with real money and limited risk.
In essence they allow you to put down a small deposit and trade as much as you wish in a period of a few weeks - even if you are in debit. At the end of the period:
- You take the profits
- The broker takes the loss
These accounts are a great bridge to real time trading, as they allow you to do lot of trades if you wish to and have limited risk.
So there you have it. Forex brokers are essential when trading, you can't do without them and their neither friend or foe, just your gateway to the worlds most exciting investment.
So why do people think forex brokers are to be seen as the enemy?
You get a lot of traders who think brokers pick stops and these are mostly involved in day trading and the fact is their logic is flawed and their stops are to close.
A broker doesn't need to pick off stops as these traders lose anyway as the odds are not in favor of day traders.
Others seek advice from their brokers - why?
If brokers could make money trading they wouldn't be brokers!
Never ever fall for the idea of having a broker assist you with your trades, you need to do this yourself and take responsibility for your actions.
3 Essential Points to Consider
You're only interested in 3 main points.
1. Forget the Words: Commission Free - You Pay!
You pay a broker in the pip spread - this is your cost of doing business.
Make sure you pay no more than 2 - 3 pips on the major currencies and if you shop around, you will find brokers offering these spreads.
2. Security
Don't trade with small or new brokers. Make sure you broker is stable, been in business for a while and has the facility to offer 24 hour trading and of course support, should you run into technical problems.
3. Trading Platform
This is your gateway to the forex market place and it needs to be reliable and easy to use. Today, most of the big brokers offer great trading platforms.
You can almost always test drive them with a forex demo account - so do this until you are comfortable with it.
Other Considerations Are:
4. How quickly you can fund your account?
Do they offer credit card facilities and how quickly can you withdraw.
5. Leverage
Most brokers offer more than enough leverage and you can easily get 100:1 (which is way more than enough for most traders) but you can get up to 400:1. A word of caution - don't use to much leverage it's the reason most novice forex traders wipe themselves out.
6. Other Extras
Many brokers will offer you free technical tools, books etc and some are useful some are not but that's down to individual preference and should not be a major consideration in opening an online forex trading account.
A Great New Service!
All brokers will offer you a forex demo account to test your trading skills but there is a new service that's great for novice forex traders and it's called a protected account.
Demo accounts show you the basics - however there is no money on the line.
Protected accounts are different - they allow you to get a feel for trading with real money and limited risk.
In essence they allow you to put down a small deposit and trade as much as you wish in a period of a few weeks - even if you are in debit. At the end of the period:
- You take the profits
- The broker takes the loss
These accounts are a great bridge to real time trading, as they allow you to do lot of trades if you wish to and have limited risk.
So there you have it. Forex brokers are essential when trading, you can't do without them and their neither friend or foe, just your gateway to the worlds most exciting investment.
Reputable Forex Broker
A good Forex broker will supply you with clients that were successful and can attest to the specific broker's qualifications and success history. Put yourself in that position, would you testify to someone's strengths if they did a poor job for you? Client history testimony should be present in any prospective Forex broker and plentiful to indicate a solid background with trading. You can tentatively assess a lot from a Forex broker with a list of clients that will speak up for the brokerage firm or individual broker. It should be noted that all word of mouth testimony should be taken with a grain of salt and dissected to collect the pertinent information. Testimony should be used in your research to find a Forex broker but should not be the deciding factor.
Another good morsel to test the reliability of any potential Forex broker is the amount of information, literature and lessons that they are willing to give to you. Most Forex brokers are of a high reputation and a solid background however, there are many out there that don't have a good history or no history and it is wise to steer clear of these brokers. You are trying to find a trusted financial advisor and settling for second best, just won't do. The more a potential Forex broker is willing to do for you in the area of helping you understand the Forex trading system, the better quality trader they will be for you.
A good avenue to travel down when seeking a good Forex broker is to ask your acquaintances about Forex brokers and how they met. This can not only give you prospective referrals to great Forex brokers but will also equip you with ideas and resources that you may not have located. If you get a referral from friends, be sure to still research that specific broker and his qualifications before committing to any formal agreement.
Another good morsel to test the reliability of any potential Forex broker is the amount of information, literature and lessons that they are willing to give to you. Most Forex brokers are of a high reputation and a solid background however, there are many out there that don't have a good history or no history and it is wise to steer clear of these brokers. You are trying to find a trusted financial advisor and settling for second best, just won't do. The more a potential Forex broker is willing to do for you in the area of helping you understand the Forex trading system, the better quality trader they will be for you.
A good avenue to travel down when seeking a good Forex broker is to ask your acquaintances about Forex brokers and how they met. This can not only give you prospective referrals to great Forex brokers but will also equip you with ideas and resources that you may not have located. If you get a referral from friends, be sure to still research that specific broker and his qualifications before committing to any formal agreement.
Tuesday, August 28, 2007
Forex Broker Guide
Introduction
The following is a list of questions you may like to ask yourself, your broker and other traders about a particular firm you have in mind. You can use this checklist to narrow down your selection of forex companies to fit your requirements. You might also like to read the forex broker ratings page on this site to see how other traders are rating and reviewing other brokers.
The following links will also give you some background information on U.S. FCMs (Futures Commission Merchants).
1. Word of Mouth
- What do other traders say about the broker?
- What is their customer service/dealing desk like?
2. Safety of Funds
- Is the broker regulated?
- What regulatory organisation are they registered with and what protections does this afford you?
- Are client funds insured against fraud at the firm?
- Are client funds insured against bankruptcy of the firm?
3. Execution
- What business model do they operate? i.e. Market Maker, ECN or NDD?
- How fast is their order execution?
- Are orders manually or automatically executed?
- What is the maximum trade size before you are put on manual execution?
- Are all clients trades offset?
4. Spread
- How tight is the spread?
- Is it fixed or variable?
- Is it larger for mini accounts?
5. Slippage
- How much slippage can be expected in normal and fast moving markets?
6. Margin
- What is the margin requirement? e.g. 0.25% (max 400:1 leverage), 0.5% (max 200:1 leverage), 1% (max 100:1 leverage), 2% (max 50:1 leverage), etc.
- Does it change for different currency pairs or days of the week?
- Is it the same for standard and mini accounts?
7. Commissions
- Do they charge commissions? (Most market makers commissions are built into the spread, whereas ECN's charge a small fee)
8. Rollover Policy
- Is there a minimum margin requirement in order to earn rollover interest?
- What other requirements or conditions are there for earning rollover interest?
9. Trading Platform
- How reliable is it during fast moving markets and news announcements?
- How many different currency pairs can you trade?
- Do they offer an Application Programming Interface (API) for automated trading systems?
- Does it offer any other special features? (e.g. One click dealing, trading from the chart, trailing stops, mobile trading etc.)
10. Trading Account
- What is the minimum account opening balance?
- What is the minimum trade size?
- Can you adjust the standard lot size traded?
- Can you earn interest on unused equity in your account?
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