Forex
 
 
Home
About us
Forex Resource
What is forex  
How does forex works
FAQ
New to forex trading
Technical Analysis
Fundamental Analysis
Major Indicator
Forex vs Stocks Market
Forex Glossary
Contact us
Sitemap
Currency Converter
Others**
Domainji.com  
Snaidu.com
Snaidu.us
Ommail.com
**
 

Informative Articles**

Choosing the Right Forex Broker

If you've already made the decision to go ahead and start trading forex, the first step you need to take is to choose the right forex broker. Currency brokers vary more than the U.S. Investment houses, so you really need to do your homework before making a decision. This is very important because your broker is almost like your business partner. They need to not only treat you fairly, but also execute when called upon. Here are some of the most important aspects to consider when picking your broker:

Low Spreads. Always look for a broker that offers low spreads (which are measured in pips). The spread is the difference between how much you can buy or sell a currency at a specific point in time. It's very similar to the bid and ask prices in the stock market. Since you don't pay a commission to a forex broker, they make their income through the spread. You don't get anything in return for paying the spread, so you'll save money on each trade if you pick a broker with low spreads.

Amount of Leverage Offered. Leverage is essential to making big money in forex. When you're making a profitable trade, the amount of "increase" in what you're holding amounts to just fractions of a penny per unit. So if you're not investing tens or hundreds of thousands of dollars, your total gain is minimal. To make a stock market comparison, assume that you buy $5,000 worth of a stock for $20. A few hours pass, and you sell it for $20 1/8. Total gain? A barely noticeable $31.25. Now lets say you were able to borrow your brokers money, and buy $500,000 worth of the same stock. Your gain would now be $3,125, which is much more substantial. An equity broker would never give you that much margin, but you can find some forex brokers who will offer as much as 100:1, which means that you can borrow up to 100 times the amount of your own capital invested. Obviously, this can be risky because you can lose money as well. Do your homework on how margin and margin calls work before using it, but understand that it is the fastest way to big money.

Reputation of the Firm. All forex brokers

should be registered with the Futures Commission Merchant and the Commodity Futures Trading Commission. You should verify that your potential forex broker is in fact registered before giving them any money. Also, because of the massive amount of capital required in the foreign currency market, brokers are usually owned or operated by large banking institutions. Verify their financial stability to ensure the safety of your investments.

Account Types Available. Small investors should look for brokers that offer mini accounts. A mini account usually offers a high amount of leverage (otherwise it would take decades of successful trading to grow $300 into anything significant). Every broker should have standard accounts which need $2000 to start the account with and offers more leverage options. The third type of account is a premium account, which will offer access to more powerful tools, services, and research. The amount of capital needed for a premium account will vary based on institution.

Quality of Tools and Research. Just as in online stock trading accounts, the quality and availability of tools and research will vary greatly between brokers. Most will have real time charts, news, & data, along with technical analysis tools. Some will have expert analysts writing articles and reports. You can look these analysts up on Google to see how credible they are. Also look for technical trading tools, economic indicators, and good customer support. I suggest starting a demo account at several brokers to get a feel for their platforms and see what type of system is most comfortable to you.

Choosing a forex broker is a very important decision, so take your time and do your due diligence. If you end up with a good one, you'll have everything you need to succeed and will be able to focus solely on trading the forex.

About the author:

This article is just a small piece of the free Forex Trading Course at forexgameplan.com. Go learn about this incredible market and sign up today while the 30 day course is still free.
 
E-gold Investing: Make Money With Currency Trading
Many people are already starting to pay attention to the newest online trend: E-gold investing. E-gold investing is a all about a system that allows you to profit from the money that is being traded everyday on the internet. What you're...

Factors Influencing a Currency Pair Exchange Rate
Introduction The exchange rate refers to the value of the US dollar against the values of currencies of other countries. Such a rate helps determine how much we pay for imported goods and services and how much we receive for what we export,...

How Do Other Countries Devalue Their Currencies?
Countries devalue their currencies only when they have no other way to correct past economic mistakes - whether their own or mistakes committed by their predecessors. The ills of a devaluation are still at least equal to its...

Your Guide to Learning a Forex Trading System
There are a great number of people in America that are interested in investing in order to make a tidy profit. There are many ways to invest and many ways to make profits by investing. One method that has been gaining in popularity is that of...

Your Mother Could Make Money In Forex Trading
The question would be not whether she could but rather would she enter the Forex trading market. The Forex day trading arena is a veritable snake pit ripe for scam artists to bilk money out of unwary investors. On the other hand, it is a forum for...

 
Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest / trade in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading.

**
The Views and opinions represented in the provided website links and resources are not controlled by the Referring Broker or the FCM.  Further, the Referring Broker and the FCM are not responsible for their availability, content, or delivery of services.