The (Foreign Exchange) Forex Trading Market Explained.
 

 

FOREX Brokers

FOREX trading requires the use of a FOREX broker

Most FOREX traders use a broker to handle their transactions.  What exactly is a broker?  Strictly speaking, a broker is an individual or a company that buys and sells orders according the investor's decisions.  Brokers earn money by charging a commission or a fee for their services.

A FOREX broker needs to be associated with a large financial institution such as a bank in order to provide the funds necessary for margin trading.  In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.

Before trading FOREX you need to set up an account with a FOREX broker.  You may feel overwhelmed by the number of brokers who offer their services online.  Deciding on a broker requires a little bit of research on your part, but the time spent will give you insight into the services that are available and fees charged by various brokers.

The best advertising is word-of-mouth advertising, and this is just as valid in FOREX trading as it is for any other type of business.  Talk to friends and associates to see who they are dealing with and find if they have any complaints or difficulties in dealing with a particular broker.

You could try selecting a few online brokers and contact their Internet help desks to see how quickly they respond to enquiries and whether or not they answer questions to your satisfaction.  Keep in mind, however, that pre-sales service may be better than after sales service.  This can be true for any online business, not just FOREX brokers.

Customer satisfaction and safety are just part of the story.  You want to find a broker who executes orders quickly and with minimum slippage.  All online brokers should offer automatic execution and have clear policies regarding slippage.  They should be able to tell you how much slippage can be expected in both normal and fast-moving markets.

Next you want to know the fees involved.  What is the spread?  Is spread fixed or variable according to the type of account?  Are mini accounts subject to wider spreads?  Are there any other charges?  Smaller spreads mean more profit for the trader, but there may be a trade-off between spread and service.  Look at the overall picture before deciding to go with a particular broker.

Margin accounts are the lifeblood of FOREX trading, so be sure you understand the broker's margin terms before setting up an account.  You need to know the margin requirements and how margin is calculated.  Does margin change according to the currency traded?  Is it the same every day of the week?  Some brokers may offer different margins for mini and standard accounts.

Trading software is very important for the online FOREX trader.  Get a feel for the options that are available by trying out a demo account at a few online brokers.  Above all, you are looking for reliability and the ability to perform well in fast-moving markets.  The software should offer automatic trading and may have special features such as trailing stops and trading from the chart.  Some features may only be available at an extra cost, so be sure you understand what your trading needs are and how much the broker charges to provide them.

Other information to find out about includes the broker's policy regarding minimum account balances, interest payments on account balances, which currencies can be traded and whether or not non-standard sized lots can be traded.  You should also find out whether clients' funds are insured and the extent of that insurance.

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Introduction to Online Forex Trading
Current Forex Currency Rates
Forex Trading
How to Get Started In FOREX Trading
FOREX versus Futures Market
FOREX versus Stocks
FOREX Trading Philosophy
FOREX Tools
Fundamental Analysis In Forex Trading
Forex Technical Analysis - Part 1
Forex Technical Analysis - Part 2
FOREX Trading Strategies
Trading Currencies on Margin
Currency Option Marketplace
FOREX Signals
How to Read FOREX Quotes
Calculating FOREX Profits and Losses
Risks of FOREX Trading
FOREX Training
FOREX Trading Software
FOREX Brokers
FOREX Glossary
Forex Updates and Training
Crash Course in Forex Education
How to Recognize Patterns in Forex Trading Markets
Defining Exotic Currencies and Their Impact on Forex Markets
Defining Trading Trend and Ranges in Forex Trading
Mind Games – The Psychology of Forex Market Trading
Crossing Currency - What’s This Mean to Forex Traders
Money Management Basics for Forex Traders
Choosing Your Forex Broker
Expensive Beginner Forex Trader Mistakes
The Elliott Wave Theory for Forex Markets
Failsafe Facts to Guarantee Failure in Forex Trading
Five No Nonsense Strategies in Forex Trading
Global Expansion and It’s Reaches within the Forex Market
Hedging in the Forex Market
The Important Ways to Keep From Losing in the Forex Markets
An Overview of the Euro’s Performance in the Forex Markets
Six Trading Tips for the Forex Newbie
The Lowdown on Day Trading
Interpreting How Interest Rates Drive the Foreign Exchange Markets
The Basics of the Bollinger Band Technical Indicator in Forex Markets
Relative Strength Analysis in Forex Trading
The Basics on Understanding Forex Options
Forex Charts – What Are They and How Do You Read Them
Interpreting the Future of the Oil Marketplace and How It Affects Forex Trading
Top Five Economic Indicators that Drive Forex Trading
Rules for Trading in Forex Markets
How Does the Japanese Yen Stack Up Against the US Dollar in Forex Markets
Pivot Points in Forex
The Ins and Outs of Trying Out a Forex Demo Account
The Top Currencies to Watch in the Forex Trading Game
Defining Moments Regarding Trading Trends and Ranges with Forex
Top Ten Basic Terms in Forex Trading and Their Definitions
Forex Folklore Investment Myths in the Market
Five Economic Driving Forces that Influence Forex Trading
Day Trading All You Wish You Did Not Have to Know
Time line for Daily Forex Trading When are the Optimum Moments
Forex Relative Strength Analysis
How Forex Quotes Can Influence your Trading Tactics
Forex Market RSS Feed
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