What A Forex Broker Does
Brian Channell
The trading decisions are still ultimately up to you, but having a broker allows you to work quicker and more efficiently. Utilizing your brokers system can mean quicker trades 24-hours a day. It is like having someone work for you while you are away on vacation, or even working a full time job. Don’t underestimate the value of a reassuring knowledgeable voice on the other end of the phone. With all the technology available, it still does not give you that personal guiding hand in the process.
Technology and your FOREX Broker
Many people believe that the FOREX Broker is a dying breed. With all of the technological advances in field, many individuals now rely heavily on computers and see no need for a broker. I would caution this line of thinking, however. If you want the convenience of an online system but the security of having someone there to answer your questions, find a brokerage firm that does both. Most FOREX brokers understand the need for 24-hour access, and have online portfolios and trading available to their customers. When you have a tough questions or problem, you will be glad you kept your broker around.
Top broker benefits
FOREX brokers vary greatly depending on the size of their firms. You don’t necessarily have to go with one of the leaders to have a good trading experience, however. You will want to look for a broker firm that offers real-time access, price certainty, competitive pricing, and competitive spreads.
Generally speaking, the bigger the FOREX broker firm, the better their spreads and prices will be. They have more pull in the market and are able to negotiate prices better. Weigh all the benefits and downfalls to each firm to ensure an educated decision. A good price does not always mean the best broker, so choose wisely.
Choosing a Broker
There are certain questions that you will want to ask to your prospective FOREX broker. Such questions include:
1. What is the spread? (Hint: The lower the spread the more money you make!) a. The spread is calculated in “pips” and is the difference between the price at which a currency can be purchased and the price at which it can be sold. Simply put, your broker has to make money. That’s how they stay in business. Unlike traditional stock trading where brokers charge commissions, FOREX brokers make money off the spread. The lower the spread the more profit that there is for you.
2. What are your credentials? (Hint: There are certain affiliations you should look for.) a. Most large brokerage firms are connected in some way to a bank or financial institution. Since the majority of their business is based on credit, this is a very important partnership. Their affiliation offers you the opportunity to invest thousands more than you could with smaller firms. It is also recommended that your chosen FOREX broker be registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Refer to your broker’s website or call directly to find out if they have such affiliations.
3. What tools are available to help me learn more? (Hint: Not all broker firms are created equal. Find out who offers the best resources and information to help you make the smartest trading decisions.) a. This is a critical question to ask. It is one thing to fulfill your trade requirements, but a FOREX broker needs to also provide you with educational tools. Ask what kind of tools they offer for their clients. 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. Many offer test accounts that allow you to “play” the market without actually investing any capital.
4. What is your leverage? (Hint: This is the determining factor on how much money you are able to make with each investment.) a. Leverage is the key factor to your success. As discussed earlier, the FOREX market runs mostly on credit. Your FOREX broker is able to supply you with a different margin depending on their size and your needs. The higher the margin the more money you can possibly make. If you are limited on funds, finding a high margin FOREX broker is top priority. If you have the capital already, you may decide that a lower margin is a smart choice for higher risk transactions and vice versa.
About the Author
Brian Channell is an online entrepreneur. Please visit www.MyForexEducation.com to learn more about Forex trading
The latest information and news on Forex:
FOREX-Dollar rallies broadly, euro down as inflation weighs - Reuters
Telegraph.co.uk
FOREX-Dollar rallies broadly, euro down as inflation weighs
Reuters - 17 hours ago
... the ECB can maintain interest rates above 2 percent for much longer," said Boris Schlossberg, director of currency research at GFT Forex in New York. ...
Daily Forex Commentary January 07 IB...
FOREX-Euro falls as ECB rate cut expectations grow - Reuters
stv.tv
FOREX-Euro falls as ECB rate cut expectations grow
Reuters - 23 hours ago
By Tamawa Desai LONDON, Jan 6 (Reuters) - The euro fell broadly on Tuesday on strengthening market views that the European Central Bank will shift to a more ...
Euro Falters as CPI Suggests ECB Will Cut Rates (Forex Vi...
Forex Scalping - Day Trading Your Way to Huge Profits - Meadow Free Press
Forex Scalping - Day Trading Your Way to Huge Profits
Meadow Free Press, ID - 6 hours ago
There is a huge industry in forex scalping systems and vendors promote them heavily on the net with track records that are quite simply mind boggling. ...
Market Timing - Predicting Tops and Bottoms In A...
Forex Trading Strategies - PWO
Best Syndication
Forex Trading Strategies
PWO, France - 50 minutes ago
Leverage strategy: Forex trading strategies help achieve success in forex trading or online currency trading. Forex trading differs from trading stocks and ...
A Basic Understanding of the Forex Markets The Options Insider
M...
Conmed cuts Q4 view on forex changes, sales volume drop - Reuters
Conmed cuts Q4 view on forex changes, sales volume drop
Reuters - Jan 5, 2009
Jan 5 (Reuters) - Medical technology company Conmed Corp (CNMD.O) cut its fourth-quarter outlook as revenue will be 9 percent lower than expected due to ...
foreign exchange - Google News
Dollar Near 5-Week High After GM Says May Not Need More Funds - Bloomberg
Business Intelligence Middle East (press release)
Dollar Near 5-Week High After GM Says May Not Need More Funds
Bloomberg - 1 hour ago
?We may see the dollar decline on worse-than-expected employment data,? said Kimihiko Tomita, head of foreign exchange in Tokyo at State Street Bank & Trust .....
2 men indicted in currency scam that bilked 700 - The Associated Press
2 men indicted in currency scam that bilked 700
The Associated Press - 10 hours ago
... investment scam that federal prosecutors say bilked more than 700 people with promises of never-lose trading techniques on the foreign exchange market. ...
Two Men Charged in Investment Scheme KLAS-TV
Two accuse...
Cracks appearing in foreign exchange market claims report - Hedge Funds Revie...
Cracks appearing in foreign exchange market claims report
Hedge Funds Review Magazine, UK - 14 hours ago
Electronic trading in foreign exchange has become the norm. The emergence of high-frequency trading shops and the burgeoning retail market have driven ...
FX Post-Trade Losing Electronic...
Citic Pacific's Board Faces Foreign-Exchange Probe - Wall Street Journal
CCTV
Citic Pacific's Board Faces Foreign-Exchange Probe
Wall Street Journal - Jan 4, 2009
HONG KONG -- Citic Pacific Ltd. said its board is the subject of an investigation by Hong Kong securities regulators into a scandal in foreign-exchange ...
Probe 'unlikely' to affect Citic shares i...
Taiwan's foreign exchange reserves up US$21.4 billion in 2008 - eTaiwan News
eYugoslavia.com
Taiwan's foreign exchange reserves up US$21.4 billion in 2008
eTaiwan News, Taiwan - 17 hours ago
6 (CNA) Taiwan's foreign exchange reserves amounted to US$291.7 billion as of the end of December, 2008, marking an increase of US$21.4 billion from the ...
Taipei shares ...