Time and time again my students ask me what to look for in a fx broker, of course a lot of them are affected by promotional material produced by forex brokers and are of the belief that they should be trading with a broker which has low spreads, though normally they fail to think about several of crucial aspects of choosing a forex provider and tight spreads are one of the least significant factors.
To assist my pupils in deciding on a forex provider I always advocate they think about these aspects ahead of selecting a broker:
1. Execution Latency
2. Depth of Liquidity
3. Spreads Over news Announcements
4. Forex provider Regulation
5. Foreign currency Pairs Accessible
Execution Latency
Envisage placing an order only to have the order hang on you after which it gets filled at a very dissimilar price. This can happen for two separate reasons, the initial reason that this happens is just because the price has changed from the time the deal is placed to when it is filled, this often happens when the you’ve a bad internet connection or when the fx brokers server is located a long distance away the other reason this occurs is because the broker is interfering with the order as they are a market maker and they’re intentionally preventing you from being filled at the price quoted taking advantage of the price difference. Always select an ECN broker by doing this you’ll be able to be guaranteed that your trades will be filled in a timely manner and the forex broker is not looking to cash in on your losses.
Depth of Liquidity
Not many people realize that when tight spreads are shown to them on a broker platform it does not always mean that they are able to trade on those prices. Most of the time fx brokers will display spreads that can’t be dealt on for any decent quantity. Not being able to trade on broker prices is usually aggravating for most traders and often results in orders being executed with slippage that will frequently work against the trader. It’s imperative that you ask your forex broker what their liquidity is like to make sure that if you’re trading any sort of volume your orders are filled at the price shown on the brokers platform or alternately deal with an ECN forex broker where you are guaranteed unfathomable liquidity.
Spreads Over News Announcements
Ahead of choosing a broker it is best to make certain that you spend some time checking their spreads over news announcements. On the list of the problems fx traders often encounter is widened spreads over news periods. Widened prices are the result of banks refusing to show prices over this period until they can determine the effect of the news announcement on the currency. A very good fx broker will aggregate a variety of investment bank forex prices to ensure that if one bank isn’t quoting prices there are others that will. If you decide to deal with an ECN broker as a rule you will not have any problems with spreads over news periods.
Forex broker Regulation
Go for a fx broker that is regulated and even better one that is regulated in the country which you reside. If you decide on a forex provider that’s regulated in the country that you live you’ve a greater chance of getting your money back if something goes wrong. If you can’t find a suitable fx broker in the country that you live in it is best to look for a forex provider located in a country which has a superior regulatory regime, fx brokers in countries such as the USA, UK and Australia tend to be the safest in the world.
Forex Pairs Offered
There isn’t any point selecting a broker that doesn’t offer the pairs that you trade so take a detailed look at what your provider offers prior to opening an account. There are some forex brokers that don’t offer many of the more exotic crosses and only stick to the majors, other brokers offer a full assortment of currencies in addition to gold and silver.
I expect this helps you in choosing the right broker, personally I’ve dealt with the majority of fx brokers around the globe and in Australia but I have ended up settling with ECN forex broker IC Markets. International Capital Markets (IC Markets) can give me a full range of currencies and commodities, are regulated in Australia by AISC, have deep liquidity behind the prices displayed and fast execution speed that helps my scalping strategy. Of course you should always do your own study before selecting a forex broker however I can without doubt vouch for IC Markets.
Filed under Currency Trading by on Apr 30th, 2012. Comment. 
Forex, short for forex, is an international market where traders are able to exchange one currency for another. For example an American trader previously purchased Japanese yen, but now feels the yen will become weaker than the greenback. If he is correct he is going to make more profit by trading yen for greenbacks.
There is not a central building where the currency market is run. This indicates that the market will not be spoiled by a natural or other disaster. That suggests that if there is a natural disaster, you can stay calm and hang on to your trades. A big event may affect the market, but will not necessarily affect your currency pair you're working with.
Don’t take action till you understand why you are taking it. Your broker can steer you through the numerous issues that surface and give you useful information.
Manage your trading activities personally. Don't depend on the software to make your choices for you. While software may just be able to make some calculations based mostly on the numbers system of Currency trading, it can’t replace the discernment, intuition, instincts, and intelligence that only homo sapiens are literally capable of using to make sound and successful trading choices. Learn more by following the cloud control trader course.
A crucial tool in avoiding loss is an order for stop loss on your trading accounts. Stop loss is a type of insurance for your monies invested in the Currency market. If you fail to implement stop loss orders, you run the risk of losing a pretty penny. Always use stop loss orders to limit your possible losses.
Forex is not a game and should not be treated as such. It can be an exciting roller-coaster ride, but thrill-seekers are ill-equipped to address the difficulties of trading smartly. Their money would be used more sensibly betting at a casino.
Look to the Canadian Dollar if you want a safe investment. It could be hard to tell what is occurring in another country's economy, so this makes things difficult. The US buck and the Canadian dollar most frequently run neck-and-neck when talking of trends. S. Buck, which represent a sound investment.
Know the problems that trading software may have. Regardless of how long any item of software has been available, it seems they all have bugs and bugs to work out. Take time to research any bugs your software might contain. This will help you to be prepared if a problem comes along. You want to avoid finding out what info can and cannot be accepted when you're in the middle of your trade.
Always stay on top of the financial stories when you are doing foreign exchange trading. Money will go up and down when folk talk about it and it starts with media reports. Enroll in text or email alerts for the markets you trade to get instant stories.
Forex is the biggest market on the planet. Only take this challenge is your are prepared to do your prpearation, by becoming well informed about world markets and currency rates. Nonetheless it is a risky market for the common citizen.
For more information on the disciplined trader check out forex reviews.
Filed under Currency Trading by on Apr 30th, 2012. Comment.
I am an expert currency trader and have lately decided to switch from a market maker broker to an ECN broker. The key reason for the move was due to unwarranted slippage on my orders from the market maker broker that I have been dealing with. The slippage that I was getting has cost me 1000s of dollars, after a bit of homework I rapidly realised that slippage generally happens with market maker providers. Subsequent to this terrible experience I made a decision to switch to a real ECN broker who was able to provide me with a lot tighter spreads in addition to no slippage.
I scoured the internet for weeks and spoke to a variety of brokers only to find that none of them were ECN forex brokers in spite of several of them claiming to be. Finally I came across an Australian forex provider called IC Markets who’re a real ECN forex broker. After using IC markets demonstration system for a few months I suddenly discovered that trading with a true ECN company is incredibly different to forex trading on a market maker broker platform, the prices were a great deal tighter and there was no slippage.
I decided that I would make the commitment and open an ECN account with IC Markets and I found that following a few months of forex trading on their system using the the same strategy that I used with my market maker broker my account was far more profitable. I found out that the majority of the increase in gains was due no slippage on my deals. Cost savings in slippage and spread meant that my trading account was much better off and I will never deal with a market maker broker again.
IC Markets Metatrader platform was also dramatically less difficult to utilize than the other fx brokers platforms, the main reason for this was because their platform has a one click trading feature on it. One-click trading ensures that I am able to easily scalp the market with one click as opposed to having to complete all of the fields on the Metatrader deal ticket. The trading platform also makes it possible for me to drag and drop orders on the chart really easily which makes life much easier when scalping the market.
I do not believe that I would ever trade using a market maker broker again really the only choice for any professional trader is an ECN provider. An additional enormous advantage of dealing with an ECN forex broker is the fact that there are no restrictions on stop loss order distances. Most market maker brokers enforce this restriction as it stops scalping, if you are a good scalper you could potentially really easily take money from the forex broker as they will not be able to hedge your trades fast enough.
I really encourage anybody planning to trade forex to select an ECN broker. There are actually not all that many true ECN brokers in existence, most claim to be ECN fx brokers but they’re really market makers and if you try them out you promptly discover they impose stop loss limits, delay fills and slip you on your fills. I have not had any problems with IC Markets at all and vouch for them if you are in search of a reputable, regulated true ECN forex provider. Most of the members of my trading club have now also switched to IC Markets and are pleased as their trading account profits have increased dramatically. True ECN forex brokers are the only way to go.
Filed under Currency Trading by on Apr 29th, 2012. Comment.