How to Properly Choose A Good Forex Broker? (2)

By Fred on Sep 1, 2008 in Currency Trading

Do not pay commissions Spot

Forex traders do not pay commissions for placing orders, unlike those who operate in future markets. In fact, a Forex broker is a mere intermediary, not a broker or agent itself, thereby not paying any cost in the execution. As mentioned earlier, they get benefits through the spread, ie the difference between the value of the “bid” and “ask.”

2. This attentive to the brokers or Fraudulent Scam

The brokers in the foreign exchange market called Scam, those who are fraudulent, driving and distorting prices; achieve their goal in different ways. Such brokers assume that the bulk of traders lose money when investing in foreign currency, you must take an opposite attitude. This means that the interest of such corridors is that you lose not only earn money on spreads. Based on my experience, I believe that several Forex brokers, simply observe that the operators just beginning in this field just as individuals to take away money.

Since the negotiation of the currency occurs only within the broker, the broker fraudulently can distort the market or expand spreads (the difference between “bid” and the value of the offer). I recall one event where after the release of economic news, several positions obtained credit, and then deliberately spread these corridors offer “bid” from 3 to 35 PIPs PIPs, and also prevent the closure of the negotiations.

Another maneuver is done deliberately with regard to “stops”. If you put a “stop” in the system that they say provide, they can trigger the “stop” moving the securities. It is a way to steal money using the new operator will start.

There is no way to operate this type of brokers, but even when the market is always influenced by events and economic data that are shared. All we can do is learn about the experiences of others and be careful when choosing a broker.

3. How to choose an appropriate system of operations?

There are three main reasons why is the foreign exchange market, namely all countries in the world manage their foreign exchange reserves and intervene in the market, several organizations also buy and sell goods and services so that they use foreign currency to compromise and finally large number of investors speculate with them for a profit.

It is known that all operators analyze the currency market in different ways. Some operators prefer to assess what is known as “fundamental or macroeconomic analysis”, that involves assessing and considering various economic issues like interest rates of the various central banks, trade balances of the various States and the economic situation of each country in particular that is reflected by economic indicators like the unemployment rate, with gross domestic product, with consumer confidence, etc..

Other operators are only based on technical analysis, using charts and analysis, such as line graphs, bar and candle “candlestick.”

It should be remembered that the market is subject to all these issues and it is essential to take both this analysis, therefore the operator should understand the two types of analysis mentioned above at the time of trade.

Unfortunately, many operators do not have time or adequate training to properly evaluate the technical and fundamental analysis, and simply prefer to use trading platforms.

A simple way to test a trading platform is by opening a demo account with a forex broker of your choice, so you can operate but by means of a simulation. Over time, you can analyze whether currency trading is beneficial or not for you. When you find a commercial platform to you, you will be able to collect the information obtained during the test and analyze what is the average benefit that you get every time it operates. If such amount multiplied by the value that you intend to invest in each transaction, you can estimate your earnings for performing transactions using the trading platform in Forex. It is important to note that the transactions through an account in vivo, likely to reduce drastically their results, and it is essential that it is realistic in the time to be spent to operate. Note that the pressure work and family, can limit the number of transactions
you intend to do.

Managing your money

As in any business, managing your money is in the account is critical. That means you have to put a cap on how much money you spend in each session also want to leverage far. Mishandling of funds can cause a brief period in the total loss of their capital.

Therefore, investors are generally well informed about what their limits with regard to research and analyze information, determine what information they wish to deal with, and if necessary, seek a trading system or trading platform to suit your needs.

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