Selasa, 09 Agustus 2011
How To Compare A List Of Online Forex Brokers
If you want to work with the most competent broker in the field of forex trading, then it is important for you to take a hold of a comprehensive list of online forex brokers so you can start comparing each of them. Once you have the list, then you should start recording relevant information about the unique account facilities offered by each broker in your list. This will allow you to directly compare each of them and make an informed decision while putting into consideration your trading requirements. In your attempt to effectively compare each of the brokers in your list, make sure that you also consider the following:
1. The Offered Trading Platform. You should compare brokers based on the platforms that they provide. You should check out the reliability of the platforms provided by each of your options. It is also important for you to try out the free demo accounts provided by different brokers. You can set up a demo account within minutes and use it to make an initial assessment on a specific platform and what it offers. By practicing with a demo account, you will know the essential features installed in the platforms offered by the different brokers in your list. You can also check out the efficiency of the platform and the level of its service. With this, you can choose that which perfectly suits your needs.
2. Instructional Materials. Choose one from your list of online forex brokers based on the materials that they provide containing instructions about operating their trading platforms. Keep in mind that if you take a hold of a good instructional material, you can expect to easily familiarize yourself with the specific operations of your chosen platform. The materials containing instructions will also help you understand the different features installed. When it comes to comparing the materials, you will notice that there are those that offer free guides that cover forex market basics and relevant details about fundamental and technical analysis. You have to consider dealing with a broker who provides you with this relevant information as you have a hundred percent guarantee that he is indeed knowledgeable in the field of forex trading.
3. Level of Leverage. Leverage can be described as the ratio between the capital which is available to you for trading and the actual amount of capital in your account. Each broker in your list can be expected to offer different levels of leverage and you have to make your choice considering the level offered. When taking leverage into consideration, you have to bear in mind that while those that offer high ratios are quite tempting, your success still lies in your hands. Because of this, you have to look for that broker who allows you to leverage your trading in the most effective manner possible in line with your experience in trading.
Comparing your options should be done in the most careful manner possible to reduce the risk of regretting your choice. As a means to help you effectively compare your list of online forex brokers, you have to consider the factors mentioned above so you can work with the most competent.
1. The Offered Trading Platform. You should compare brokers based on the platforms that they provide. You should check out the reliability of the platforms provided by each of your options. It is also important for you to try out the free demo accounts provided by different brokers. You can set up a demo account within minutes and use it to make an initial assessment on a specific platform and what it offers. By practicing with a demo account, you will know the essential features installed in the platforms offered by the different brokers in your list. You can also check out the efficiency of the platform and the level of its service. With this, you can choose that which perfectly suits your needs.
2. Instructional Materials. Choose one from your list of online forex brokers based on the materials that they provide containing instructions about operating their trading platforms. Keep in mind that if you take a hold of a good instructional material, you can expect to easily familiarize yourself with the specific operations of your chosen platform. The materials containing instructions will also help you understand the different features installed. When it comes to comparing the materials, you will notice that there are those that offer free guides that cover forex market basics and relevant details about fundamental and technical analysis. You have to consider dealing with a broker who provides you with this relevant information as you have a hundred percent guarantee that he is indeed knowledgeable in the field of forex trading.
3. Level of Leverage. Leverage can be described as the ratio between the capital which is available to you for trading and the actual amount of capital in your account. Each broker in your list can be expected to offer different levels of leverage and you have to make your choice considering the level offered. When taking leverage into consideration, you have to bear in mind that while those that offer high ratios are quite tempting, your success still lies in your hands. Because of this, you have to look for that broker who allows you to leverage your trading in the most effective manner possible in line with your experience in trading.
Comparing your options should be done in the most careful manner possible to reduce the risk of regretting your choice. As a means to help you effectively compare your list of online forex brokers, you have to consider the factors mentioned above so you can work with the most competent.
Find a list of some of the top Forex brokers together with leading sign up bonuses for new trading clients!
Best Forex System for Ensured Forex Gain
The foreign exchange market, or Forex for short, is a trading system that provides opportunities for investing in various currencies. It involves trillions of US dollars each day, making it the biggest and most rewarding financial market all over the world. Most traders are continually in search for the best Forex system to employ in their strategies for maximizing profits and minimizing losses in trading transactions.
Engaging in the foreign exchange market has taken the pragmatic business people's world by storm since it presents a number of advantages. Currency trading, when compared to other financial markets with fixed income, provides low margins of relative profit. Also, Forex traders who use leverage improve their profit margins depending on the account size.
Nowadays, useful trading tools such as Forex systems are readily available in the internet that makes it draw attention from a number of people. More and more expert currency traders and Forex trading novices have become increasingly interested in having a trading system for greater profit. Before choosing the best system to use though, they conduct proper and extensive research first because having the correct Forex system for one's needs automatically means profit for the trader. It is best to look for a system that will suit the trader's preferences and needs. Different options should thus be understood and various Forex trading aspects be examined first in order to make an informed decision.
Having a Forex trading system lets traders earn from their money and make it grow. It lets traders create customized set of rules to help buy low, sell high, and avoid risk as much as possible. This trading system provides entry and exit, risk management, scaling, and other general rules to follow and much more. The best systems found online commonly offer a demo account for a free trial version about the trading system. This opportunity allows traders to learn more and practice the Forex system without spending any money.
Engaging in the foreign exchange market has taken the pragmatic business people's world by storm since it presents a number of advantages. Currency trading, when compared to other financial markets with fixed income, provides low margins of relative profit. Also, Forex traders who use leverage improve their profit margins depending on the account size.
Nowadays, useful trading tools such as Forex systems are readily available in the internet that makes it draw attention from a number of people. More and more expert currency traders and Forex trading novices have become increasingly interested in having a trading system for greater profit. Before choosing the best system to use though, they conduct proper and extensive research first because having the correct Forex system for one's needs automatically means profit for the trader. It is best to look for a system that will suit the trader's preferences and needs. Different options should thus be understood and various Forex trading aspects be examined first in order to make an informed decision.
Having a Forex trading system lets traders earn from their money and make it grow. It lets traders create customized set of rules to help buy low, sell high, and avoid risk as much as possible. This trading system provides entry and exit, risk management, scaling, and other general rules to follow and much more. The best systems found online commonly offer a demo account for a free trial version about the trading system. This opportunity allows traders to learn more and practice the Forex system without spending any money.
Does making profit in the Forex market sound too good to be true? Doubt no more and learn more information, good advice and useful tips and tricks in currency trading. Also learn the best Forex system for maximizing profits by just clicking http://www.forexmarketstrategies.info that offers people a free newsletter for valuable pieces of information regarding Forex broker, trading systems, robot, and more. Informative videos are also readily available for greater Forex understanding. Everything anyone needs to know about beneficial investment in Forex is just one click away.
How A Beginner Can Get Started in Forex Day Trading
There are many ways that you can earn a living from home, and a very popular way that people are doing this is with forex day trading. Like the stock exchange, you are going to be making many different transfers and trades throughout the day, but instead of trading different stocks you are going to be trading different currencies and exchanging them into other currencies to try to make a profit off of them.
To learn how to do this you are going to want to take a few courses online, or read some literature on trading, just so you can make sure that you know what you are doing. There are many different resources that you can take advantage of, and some of them are even going to be free. You just need to take the time to read them.
There are many free ebooks online that you can read that will teach you how to begin forex day trading, and there are also many different websites that perform this service that you can practice trade on, and they will have tutorials as well. Although there is going to be a lot of money to be made, you aren't going to want to make large investments in the beginning when you first start learning.
It may take you a while to get the hang of things, so don't risk losing a lot of money. As time goes on you are going to find that you are a lot more comfortable with what you are doing, and then you can make larger investments and trades. There are a few different sites where you can monitor the market, and they are also going to be cheap to trade on as well.
Read the different reviews on the internet to see what people have to say about the different broker sites to find out which one has the best reviews. You will need to either create a bank account or link one of your bank accounts to the site so that you have the funds to start trading. Set aside a specific amount of money that you want to use when you are first learning.
Forex day trading is a great way for you to work from home, and make a great living if you can get the hang of it. Take advantage of all of the different teaching programs and tutorials that are readily available, and start out with small investments. The more comfortable you get, the more money you will invest, and the more income you will make.
To learn how to do this you are going to want to take a few courses online, or read some literature on trading, just so you can make sure that you know what you are doing. There are many different resources that you can take advantage of, and some of them are even going to be free. You just need to take the time to read them.
There are many free ebooks online that you can read that will teach you how to begin forex day trading, and there are also many different websites that perform this service that you can practice trade on, and they will have tutorials as well. Although there is going to be a lot of money to be made, you aren't going to want to make large investments in the beginning when you first start learning.
It may take you a while to get the hang of things, so don't risk losing a lot of money. As time goes on you are going to find that you are a lot more comfortable with what you are doing, and then you can make larger investments and trades. There are a few different sites where you can monitor the market, and they are also going to be cheap to trade on as well.
Read the different reviews on the internet to see what people have to say about the different broker sites to find out which one has the best reviews. You will need to either create a bank account or link one of your bank accounts to the site so that you have the funds to start trading. Set aside a specific amount of money that you want to use when you are first learning.
Forex day trading is a great way for you to work from home, and make a great living if you can get the hang of it. Take advantage of all of the different teaching programs and tutorials that are readily available, and start out with small investments. The more comfortable you get, the more money you will invest, and the more income you will make.
Are you looking for a forex day trading system? Be sure to visit my site to find out about an effective forex signal service.
Benefits Of Forex Trading
If you only have a little bit of money, say $25 with which you can day trade with, you're going to find it difficult. This is because pattern day traders only let you day trade with a minimum of $25. Your Forex broker will observe your trading activity and won't let you perform in trades that not permitted under the pattern day traders rule. The rule is applicable to stock options and stocks.
Risk Control
Forex market offer two qualities to help traders with risk control. Risk control is the chance to identify loss if the market isn't moving the way you want it to. If traders don't want to use other tools, stop-loss orders can be used to limit losses.
You probably already know all that. But a setback for some traders is that stop orders can be carried out at a lower price than the price you planned.
Here are 2 common circumstances when the above can occur:
Situation #1 is concerning market liquidity. If the market has poor liquidity, the price variation between executions could be major. This is evident in small volume security intraday charts: the price doesn't move in pattern, it leaps between levels. This can be harmful to your orders and is known as slippage. Slippage has bad influence on your entry and exit order.
Situation #2 is price gaps. Gaps occur in stocks when vital news is announced while the market is closed. Gaps are certain when news is released. A gap can also be good for your position, if the gap direction goes is in favour of your trade. But note that gaps lessen your risk control with stop-loss orders.
I've only discussed 2 of the possible benefits for traders of the Forex market, but there are many other benefits which I've not mentioned, from the commission free trading, to the minimal amount of money needed to open a trading account. These are just some of the reasons why Forex market constantly attracts new traders.
Risk Control
Forex market offer two qualities to help traders with risk control. Risk control is the chance to identify loss if the market isn't moving the way you want it to. If traders don't want to use other tools, stop-loss orders can be used to limit losses.
You probably already know all that. But a setback for some traders is that stop orders can be carried out at a lower price than the price you planned.
Here are 2 common circumstances when the above can occur:
Situation #1 is concerning market liquidity. If the market has poor liquidity, the price variation between executions could be major. This is evident in small volume security intraday charts: the price doesn't move in pattern, it leaps between levels. This can be harmful to your orders and is known as slippage. Slippage has bad influence on your entry and exit order.
Situation #2 is price gaps. Gaps occur in stocks when vital news is announced while the market is closed. Gaps are certain when news is released. A gap can also be good for your position, if the gap direction goes is in favour of your trade. But note that gaps lessen your risk control with stop-loss orders.
I've only discussed 2 of the possible benefits for traders of the Forex market, but there are many other benefits which I've not mentioned, from the commission free trading, to the minimal amount of money needed to open a trading account. These are just some of the reasons why Forex market constantly attracts new traders.
Forex Price Shading
Prices on currency exchange currency pairs are quoted as bid-offer spreads, the bid being the sell price and the offer being the buy cost. So, if the EUR / USD is quoted at 1.4256 / 1.4258, a trader desiring to go long ( buy ) would buy the currency pair at 1.4258, while a trader desiring to go short ( sell ) would sell the currency pair at 1.4256.
The difference between the 2 costs, in this case, is 2 pips, or 0.0002 ( a pip is generally measured as 0.0001 ).
Typically, the more liquid a currency exchange pair is, the smaller the bid / offer spread will be. The liquidity of a pair is decided by how many trades are happening on it, so that the most commonly traded pairs generally have the smallest bid-offer spreads.
How currency exchange providers make their cash
Foreign exchange is a market on which traders can trade commission-free. This means that currency exchange providers make their profits on the differences between the bid and offer costs.
In the case of the EUR / USD pair quoted at 1.4256 / 1.4258, a trader going long would buy the pair at 1.4258. The pair, now costed at 1.4256 in the market, would have to rise 3 pips for the trader to earn a profit one pip to 1.4257, a 2nd pip to 1.4258 ( the break-even point ), and a 3rd pip to 1.4259. The two-pip movement in which the trader breaks even is where the currency exchange provider makes its profit.
What is price shading?
Currency exchange providers generally add pips to the prices quoted to them by the banks to extend their margin. Price shading is when a currency exchange provider, believing that a particular currency is going to move in a certain direction, will add pips to one side of the currency quote. So if a currency exchange provider assumed the EUR / USD pair would rise, it may quote the pair at 1.4256 / 1.4260, instead of 1.4256 / 1.4258, meaning that a trader going long would have to buy the pair at 1.4260.
Accordingly, the currency pair would have to move 5 pips for the trader to earn a profit, and the four-pip movement in which the trader broke even would be the currency exchange provider's profit.
Generally, if there are way more buyers than sellers of a currency pair, a provider will shade the buy side by adding pips to the offer cost. Likewise, if there are far more sellers than buyers of a currency pair, a provider will shade the sell side by adding pips to the bid cost.
Why it works
If there were 500 consumers and 500 sellers of a certain currency pair, and the foreign exchange provider had added one pip to each side of the inter-bank quote, the provider would make one pip for each trade ( or 1,000 pips ).
If there were 300 customers and 700 sellers, the provider would add 2 pips to the bid price and no pips to the offer cost.
So that the inter-bank rate for the EUR / USD pair is 1.4255 / 1.4256 and the broker quotes it at 1.4253 / 1.4256, meaning the sellers sell at 1.4253 while the buyers buy at 1.4256. As the amount of sellers in the market is higher than the number of buyers, the currency pair falls in value. The pair wants to fall by 2 pips for the sellers to break even ( from 1.4255 to 1.4253 ), and the foreign exchange provider makes those 2 pips in profit. That is 1,400 pips of profit for 1,000 traders.
The simplest way to use this to your advantage
To ascertain whether your forex provider is using price shading you would need to compare the quoted costs to those quoted by Reuters or Bloomberg, or create an account with 2 providers, one of them being a straight-through processing broker who will charge a commission instead of profit on the bid / offer spread.
If your provider's costs are constantly biased to one side, it means that the majority of orders coming from retail patrons are coming from that side. Because the majority of retail investors are usually wrong, you might trade on the other side if the bias is on the purchase side, you might sell, and if the bias is on the sell side you might purchase.
Also, as these spreads drawback the majority by cutting into their profits ( remember, your forex pair wishes to cross the ask / buy spread to get to break even before you can turn a profit ), you will get advantages from not losing the shaded pips, fundamentally entering your position at a nicer price than the majority of investors.
When selecting a forex broker
Any broker that doesn't charge a commission for forex trading will make its profit in the ask / buy spread; and it is the trader's responsibility to compare different fx providers to underdant their commission structures and how they get paid.
A trader should choose a reputable provider based on the strength of the company, their history of service, any awards they have won and whether they are regulated by your country's regulatory authority. A good forex provider will offer this information freely, along with transparent information about their spreads, accessible on their website or by phone.
As forex spreads can vary thanks to the levels of liquidity in the market, a good forex broker should pass narrow spreads in the underlying market on to clients, as well as having a maximum spread cap.
The difference between the 2 costs, in this case, is 2 pips, or 0.0002 ( a pip is generally measured as 0.0001 ).
Typically, the more liquid a currency exchange pair is, the smaller the bid / offer spread will be. The liquidity of a pair is decided by how many trades are happening on it, so that the most commonly traded pairs generally have the smallest bid-offer spreads.
How currency exchange providers make their cash
Foreign exchange is a market on which traders can trade commission-free. This means that currency exchange providers make their profits on the differences between the bid and offer costs.
In the case of the EUR / USD pair quoted at 1.4256 / 1.4258, a trader going long would buy the pair at 1.4258. The pair, now costed at 1.4256 in the market, would have to rise 3 pips for the trader to earn a profit one pip to 1.4257, a 2nd pip to 1.4258 ( the break-even point ), and a 3rd pip to 1.4259. The two-pip movement in which the trader breaks even is where the currency exchange provider makes its profit.
What is price shading?
Currency exchange providers generally add pips to the prices quoted to them by the banks to extend their margin. Price shading is when a currency exchange provider, believing that a particular currency is going to move in a certain direction, will add pips to one side of the currency quote. So if a currency exchange provider assumed the EUR / USD pair would rise, it may quote the pair at 1.4256 / 1.4260, instead of 1.4256 / 1.4258, meaning that a trader going long would have to buy the pair at 1.4260.
Accordingly, the currency pair would have to move 5 pips for the trader to earn a profit, and the four-pip movement in which the trader broke even would be the currency exchange provider's profit.
Generally, if there are way more buyers than sellers of a currency pair, a provider will shade the buy side by adding pips to the offer cost. Likewise, if there are far more sellers than buyers of a currency pair, a provider will shade the sell side by adding pips to the bid cost.
Why it works
If there were 500 consumers and 500 sellers of a certain currency pair, and the foreign exchange provider had added one pip to each side of the inter-bank quote, the provider would make one pip for each trade ( or 1,000 pips ).
If there were 300 customers and 700 sellers, the provider would add 2 pips to the bid price and no pips to the offer cost.
So that the inter-bank rate for the EUR / USD pair is 1.4255 / 1.4256 and the broker quotes it at 1.4253 / 1.4256, meaning the sellers sell at 1.4253 while the buyers buy at 1.4256. As the amount of sellers in the market is higher than the number of buyers, the currency pair falls in value. The pair wants to fall by 2 pips for the sellers to break even ( from 1.4255 to 1.4253 ), and the foreign exchange provider makes those 2 pips in profit. That is 1,400 pips of profit for 1,000 traders.
The simplest way to use this to your advantage
To ascertain whether your forex provider is using price shading you would need to compare the quoted costs to those quoted by Reuters or Bloomberg, or create an account with 2 providers, one of them being a straight-through processing broker who will charge a commission instead of profit on the bid / offer spread.
If your provider's costs are constantly biased to one side, it means that the majority of orders coming from retail patrons are coming from that side. Because the majority of retail investors are usually wrong, you might trade on the other side if the bias is on the purchase side, you might sell, and if the bias is on the sell side you might purchase.
Also, as these spreads drawback the majority by cutting into their profits ( remember, your forex pair wishes to cross the ask / buy spread to get to break even before you can turn a profit ), you will get advantages from not losing the shaded pips, fundamentally entering your position at a nicer price than the majority of investors.
When selecting a forex broker
Any broker that doesn't charge a commission for forex trading will make its profit in the ask / buy spread; and it is the trader's responsibility to compare different fx providers to underdant their commission structures and how they get paid.
A trader should choose a reputable provider based on the strength of the company, their history of service, any awards they have won and whether they are regulated by your country's regulatory authority. A good forex provider will offer this information freely, along with transparent information about their spreads, accessible on their website or by phone.
As forex spreads can vary thanks to the levels of liquidity in the market, a good forex broker should pass narrow spreads in the underlying market on to clients, as well as having a maximum spread cap.
Remember that CFDs and forex are geared products and may lead to losses that surpass your initial deposit. CFD trading might not be suitable for everyone, so please make sure that you understand completely the risks involved.
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