Forex Brokers

When it comes to forex brokers “It’s a jungle out there”, some brokers are dishonest and not reliable, therefore it is absolutely necessary to research and find the most reliable honest broker to start your new business venture. There are two different types, Market Makers usually take the “other side” of the transaction and then hedge their position further in the market, by either matching it with another client or setting it off (clearing it) with a bank or broker, they make money on the spread between the BUY and SELL price. Brokers act as intermediaries or agents rather than principals. They do not trade “against” their clients or do their own proprietary trading. Their purpose would be to find good prices for their clients to trade at, like insurance brokers, foreign exchange brokers act as a middle man putting the best bid and offer together to provide the most competitive quotation.

     Another important consideration when choosing your forex brokerage firm is the trading platform they use. MetaTrader4 is the simplest and by far the most user friendly. Many systems and robots have been developed for use on this platform, all brokers recommended on this site use Metatrader4.

     The other criteria for choosing the right forex broker is their client support, many of these firms have less then desirable support which often leads to frustration and disappointment. Withdrawing your profits should be a quick process without any hassle. Also be weary of the forex brokers offering free forex education, often times their free education is geared towards taking your money, one example of this is their excessive leverage of 100:1, 200:1 and even 400:1. Using this amount of leverage is a sure way for you to fail in this business and a sure way for your broker to buy his new Yacht!

     Rating brokers is not an easy task, oftentimes many individuals will falsely give brokers a bad rating because those individuals have made bad trading decisions and have suffered a loss in their account in turn blaming everyone but themselves for their bad judgement, therefore when researching brokers your research should be based on client support, efficient withdrawal process and speed of trade executions. Remember, you are always in control, even if your broker offers you 200:1 leverage, it doesn’t mean you have to use that amount of leverage. To trade $100,000 USD/EUR (1 lot) many times all you need is to put up $1000.00 margin (100:1 leverage), now for every pip that moves against you, you lose $10.00. If your trading account has a $2500.00 balance it would be insane to trade a 1 lot. It would be much wiser to trade 1 mini lot ($10,000.00) in turn losing or gaining $1.00 for every pip. Actually, micro lots would be the wisest choice for a trading account that size but the gains would be much smaller then trading mini lots. The point I am trying to make is, trade according to your risk comfort zone to minimize bad trading decisions, closing your profitable trades early and letting your losers run. You are always in control.