Tag Archives: forex brokers

Factors to Consider When Choosing Forex Brokers

Posted on by

Forex brokers are an integral part in the normal trading of the Forex market. They act as the agents who link the buyer to the seller. If you are a new trader, it is important for you to know what to look for in a Forex broker.

Types of Forex Brokers

Market Makers

Market makes are Forex brokers who offer traders the means to trade with and against the broker. Market makers provide liquidity to aspiring traders by taking the opposition position on their traders. They are responsible for offering traders a single bid per currency pair. Market makers can easily manipulate the market prices.

ECN Brokers

ECN (Electronic Communications Network) brokers provide a medium for the buyer and the seller to contact each other. They are responsible for matching the buyers to the sellers. The ECN allow traders to post their own bids and even see the multiple bids made by other traders.

What to Look for in a Forex Broker?

Below are some of the factors one should consider when choosing the appropriate Forex broker:

Transaction fees

In Forex trading, transaction fees are normally calculated in pips. Choose a Forex broker that offers as low as possible transaction fees.

Customer service

A good Forex broker should provide different options to contact him/her in case of any problem. You should be able to contact him via phone or email with ease. Before you open and fund a real money account – especially in online Forex trading – make sure you are guaranteed of getting good 24-hour customer service.

Minimum account size

Different brokers have different size of lots you can trade on. The minimum trading size ranges from 1000 units to about 100,000 units, depending on the broker. Depending on your amount of money, select a broker that offers the proper units for you to trade.

Research and trading tools

A good Forex broker provides the necessary research tools that help account holders to make serious decisions before trading. Before employing the services of a Forex broker, ensure there are some specific research tools such as the market analysis, indicators and Forex chart patterns that can allow you to get the market information which will give you a basis of smart trading decisions.

Online trading platform

Before choosing a Forex broker, ensure they have an online platform that is secure and easy to use.

Leverage options

A good Forex broker should give you numerous leverage options. You should have different leverage ratios to choose from. Low leverage ratios can be advantageous to you.

If you consider the guidelines above, sure you will get the right Forex broker who will ensure your investment is safe. They will assist you to grow your investment and reap better benefits.

How to Make Money Trading Forex?

Posted on by

Forex trading is one of most lucrative businesses for making money today. It involves trading currencies of different countries. Currencies are traded in pairs and most important pairs contain USD in them. The value of various currencies in foreign exchange market fluctuates many times in a day due to different factors relevant with respective country. Due to such fluctuation in currency value traders make money by selling or buying currencies. Currencies are bought at lower rate and sold at higher rate. If you are also interested to make money by trading forex then you have to follow the simple steps given below:

image: stock.xchng

Forex Trading Making Money Tips

Learn Forex –

The very first thing you need to focus upon before entering the vast world of forex trading is to get acquainted with its basics and essential forex trading strategies. For this purpose, you can read online articles and guides written for beginners intending to explore the complicated, fluctuating and lucrative world of forex trading.

Practice with Free Demo Account

After getting enough knowledge about forex trading, now it’s time to apply those strategies in actual sense. For this purpose, you have to open demo account with reliable trading platform. Here you will practice trading forex in real time and will make no investment in fact. Major trading currencies include EUR/USD, GBP/USD, USD/JPY and EUR/JPY. So you have to practice with these pairs in your free demo account. This practice session will make you able to trade forex in real sense with actual capital investment and will minimize the ratio of risk in your future trades.

Use Forex Trading Software or Hire a Professional Broker

If you think that you have got enough knowledge to trade forex yourself then you can facilitate your trading experience by using software. Yes many traders prefer to use forex trading software to add automation to their forex trading venture. And if you think that you are not prepared to play this risky game yourself then it’s better to hire professional broker who can take care of your trading venture and will take his commission on successful trades.

Things to Ponder Over before Heading towards Making Money with Forex Trading:

After going through the above discussion you’ll be feeling excited to start making money with forex trading but before you move ahead to invest your time and money into this profit generative business you have to keep certain thing in mind. It’s true that forex trading has great earning potential and it can even change your financial state into few minutes if traded properly but thing can go in opposite direction as well. So in an excitement of earning hundreds times more profit over your actual investment, always keep an eye on other side where you can lose more than your expectation as well. Therefore it is recommended to go with small trades to become an experienced trader who not only enjoys colossal profit upon small investment but can also tolerate unexpected downturn possible in risky money making game of forex trading.

Forex Trading Strategies

Posted on by

Forex trading is a huge money making venture involving exchanging currencies over the counter with no centralized exchange. Investors from all over the world enter everyday in this mega profit generating market with an expectation to generate profit by investing whatever they can. Small individual investors to large enterprises all participate in this vast money making game irrespective of their geographical position. They just need to have access to internet as the whole business of forex trading is carried out through the network of computers for connecting traders all over the world. Before you also feel excited to dive into this vast profit making pool to earn colossal profit for small investment you need to understand forex trading strategies in order to play at safer end.

Leverage

Leverage is the most important strategy in trading forex. It involves borrowing money from broker to invest into certain trade in forex. This strategy is used to make profit out of momentary fluctuations in currencies values. As this amount is provided by broker so investor first opens a margin account with him after that he can get amount of leverage by the ratio of 50:1 100:1, 200:1 or even more. Mostly standard trading is carried out on 100,000 units so in order to trade $100,000 an investor has to deposit only $1000 in his account. After that he will get be able to trade $100,000 by having leverage of 100:1. This ratio seems really larger than 2:1 ratio offered in case of equities but the reason is that currency fluctuation during intraday remains less than 1% unlike equities. So Forex brokers are able to offer such huge leverage to invest in.

Though leverage can maximize the profit potential up to 100 times or even more, but it also carry equal chances of causing unexpected upsets if currency values fluctuate to an extent an investor is not expecting. That is why other strategies of limit entry, stop entry or stop loss are used to avoid intolerable losses.

Limit Entry Order

This strategy is used to enter the market for placing trade at most desired price or level. Limit entry orders are placed at specified price or even better. In this strategy, a trader either buys a currency below the market or sells it above the market. This type of strategy is applied in an anticipation of reversal in price hike after reaching your desired level.

Stop-Entry Order

This strategy works in reverse of limit entry order where an order is placed to sell below the market or buy above the market at reaching certain price.

Stop Loss Order

As the name indicates, this strategy is used to stop further loss after reaching at certain level. If prevents further loss if prices fluctuate against your predictions or expectations. It works until canceled by the trader itself.

Stop loss order strategy is considered really useful particularly for those who can’t sit before computer to observe each and every fluctuation in currency prices.

Market Order

Market order involves buying or selling a currency pair at best possible current price. As the best price becomes available the investor places order via broker to buy or sell. Depending upon the current available price, investors decided to sell or buy certain currency pair.

So, after having a look at aforementioned forex trading strategies, if you think that you are also having potential to convert your investment into profit then go and have your share today by using these strategies timely and prudently.

What is Forex Trading?

Posted on by

Forex Stands for FOReign EXchange, which deals in exchanging foreign currencies not by the way of centralized exchanging platform but conducted over-the-counter (OTC) electronically. It involves currency trading from different countries of the world. According to an analysis, almost $3 trillion or even more are traded everyday in foreign exchange markets which reveal the vastness of this trading venture. Everything is done via computers between traders sitting in different corners of the world. Major financial exchanges of developed countries (located in London, NY, Tokyo, Hong Kong, Singapore etc.) control this mega trading game during their specific trading hours.

image: stock.xchng

Forex exchange is 24 hours market with huge trading volume of $3 trillion plus every day. The reason is need for exchanging currencies for certain reasons or for enjoying profit generated after value of your currency increases in the market. That is why only 5% trade is done by companies/individuals for getting buying another currency for business needs while 95% trading is done just for making money due to the fluctuating value of various currencies possible throughout the day. Forex market carries highest liquidity due to its immense potential of generating profits within few minutes. Even stock market with around $2 trillion turnover everyday seems dwarf due to the huge volume of FX market.

Top Currency Pairs in Forex

Currencies are traded in pair in forex. The most traded currencies are called majors which are given below:

*US Dollar (USD)
* Japanese Yen (JPY)
* Euro (EUR)
* British Pound (GBP)
* Canadian Dollar (CAD)
* Australian Dollar (AUD)
* Swiss Franc (CHF)

For representing a currency pair, their abbreviations are used. Top currency pairs which are traded mostly throughout the world are given below in their abbreviated forms.

1. Euro and US Dollar (EUR/USD)

2. US Dollar and the Japanese Yen (USD/JPY) (The Gopher)

3. British Pound and US Dollar (GBP/USD) (The Cable)

4. USD/CAD

5. US Dollar and Swiss franc (USD/CHF) (The Swissie)

6. AUD/USD (The Aussie)

Forex trading is usually done by hiring a broker who places trade according to your preferences. Placing trades with the help of broker does not take more than few minutes. You just make preference and broker passes it to Interbank Market to create your position. As you close trades, your broker also closes your position in the market and credits the forex account with gain or loss of amount traded on that specific day.

Traders or investors interested in exchanging foreign currencies from all corners the world respond to fluctuations in major currencies and buy or sell currencies in an anticipation of generating instant profit for their investment. An investor prefers to buy a currency at lower rate and sells it with an increase in its value in market. In this way forex exchange becomes the most lucrative, huge money making market with immense potential of earning profit within a game of few clicks on approaching the desired value of certain currency.