Archive for the ‘About Forex’ Category

How to choose forex broker?

Before you start trading in the foreign exchange market you need a forex broker. What exactly is forex broker? The simplest, forex broker is an individual or company that performs the orders in the forex market by the decision of the client (dealer). Brokers earn through commissions or fees for their services, or the difference between the buying and selling prices. Brokers who offer their services via the Internet is simply too much! To decide for a broker requires a little explore what is offered, but this time you will give an insight into the services that are available and fees charged by various brokers.

Is the Forex broker regulated? When choosing a forex broker out of which the regulatory agency is registered. Forex market is labeled as “unregulated” market. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with Commodity Futures Trading Commission (CFTC) and must be a member of the NFA. CFTC and NFA were established to protect the public against fraud, manipulation, and unfair trade practices. You can verify CFTC registration and NFA membership status of a particular broker and check their disciplinary history of the telephone number of NFA (80… or by checking the NFA.

Among the registered firms see one with a clean regulatory records and solid financial performance. Cancel by unregulated companies sounded much like no matter how tempting – eg 1 pips spread on all currency pairs! Too good to be true!

NFA has intensified its efforts in educating small investors in forex and also issued a brochure entitled “Trading in the Retail Off-Exchange Foreign Currency Market.” NFA recommends you read it before going on the forex market. It also developed and Forex Online Learning Program, an interactive program explaining how the”retail”traded forex contracts, which are the risks of trading, as well as steps that individuals should take before opening forex accounts. and brochures and online learning available to everyone free of charge.

Advantages of Forex

* Small fee: Brokers are compensated for their services through the spread (the difference between supply and demand, or the buying and selling) that are taken at the start of trade or payment.

* There is no fixed order size (lot) for the purchase or sale: the options market, lot size or the contract (order) is determined by the terms of trade. For example, the standard order options to silver is 5000 ounces. At the forex market alone determines the size of your order. This allows traders to participate in the market with accounts of $ 250 but most brokers, even where the broker has a minimum deposit 1 USD!

* No agents: foreign exchange forex trading eliminates intermediaries, and allows to trade directly responsible for the market price to a specific currency pair.

* Low transaction costs: A common transaction cost (the difference between the buy / sell) is usually less than 0.1% under normal market conditions. When a broker can be a major and a range of about 0.07%. Of course, it varies on your leverage.

* Trade takes place 24-hours a day: No waiting to signal the opening bell – from Sunday 24.00 to Friday 22:00 Forex market never sleeps. This is great for those who wish to trade in their free time, because you can choose when you want to trade – morning, afternoon or night.

* No one can influence forex markets: foreign exchange market is so vast and has so many participants that there is no force (or even the central bank) that can control the market price for a longer period.

* Leverage: Forex Market allows to run with the margin deposit can control a much larger total contract value. Leverage gives the trader the opportunity to achieve a nice profit, while simultaneously reducing the risk to invest a minimum. For example, forex broker offers leverage at a ratio of 200:1, which means that with $ 50 deposit trader can buy or sell currencies in the amount of $ 10,000. Similarly, with $ 500, can be traded with $ 100,000 and so on. But beware: Leverage is a sword with two edges! Without proper risk management, this high degree of leverage can lead to large losses and gains?

* High liquidity: with respect to the Forex market so huge, it is also very liquid. This means that under normal market conditions, with a click of the mouse you can currently buy and sell at will, it means there is always supply and demand and can not happen if you decided to”go out”of trading that you do not have anyone to sell you a couple of trade, and that “stuck” in the store. You can even set your online trading platform to automatically close an open position on the desired profit level (a limit order, or take / profit), and / or close if the trade goes against you (stop loss order).

* Free “demo” accounts, news, charts, and market analysis: the majority of online Forex brokers offer ‘demo’ accounts to train trading with Forex news and graphs. All free! These are very valuable resources for “poor” and the smart traders who would like to test their trading skills with virtual money before opening a real (live) account and risking real money. One of the best forex brokers for begginers is eToro

* “Mini” and “Micro” Trading: if you think it would start trading in the foreign exchange market should be a truck full of money, you are wrong! The fact is that, compared to trading stocks and options, it is not the same. Online Forex brokers offer “mini” and “micro” merchant accounts, some with a minimum deposit of $ 250 or even less. Now we do not suggest that you should open an account with a minimal role, but that is what makes Forex available to the average (poorer) individual who does not have a large initial capital for trading. Much more likely bet earnings. We recommend you some of the best forex brokers offering micro account:

Advantages of forex stock market are really many ..

What is Forex?

The word Forex is the abbreviation of English words – Foreign Exchange, which means foreign exchange market. Forex (FX) is the exchange or change one currency for another, exactly defined by the purchase price, which is called Exchange rate (Exchange rate). Forex is the largest financial market in the world, whose volume exceeds all U.S. securities market together. His strength is best illustrated by the fact that it came after extensive research conducted 2004. year,and which found that daily average on the FX market turnover 3.5 trillion U.S. dollars.When you take the fact that the traffic since 2001. until 2004. The large rose 57% to get a clear picture of the force, the degree of expansion and the attractiveness of this market.This forces us guarantees almost unlimited liquidity, nor does any single financial market in the world. Forex market makes a network of over 4500 institutions and as such there is no one central place through which all transactions are carried out. Given such a structure, not simply to establish his tray size and strength, but we can assume that it is much stronger today than it was 2004th year. Price on the FX market is formed exclusively on the principle of the law of supply and demand. Due to his size and strength are disabled long-term manipulation of the price, even the strongest financial institutions such as the Central Bank. All of this ensures equal conditions for business for all participants.

There are several characteristics which make the FX market in a big advantage compared to other financial markets. The most important advantages are:

1. Unlimited liquidity (at any time you can open and close the account without waiting).
2. Great volatility (large oscillations).
3. Trading with a margin account with a leverage (leverage) size of 5:1 to 400:1
(operates with 400 times the amount of money from the deposited amount).
4. The opportunity to earn income to the rise, and fall in currency values
(short sell).
5. The market is open 24 hours a day, Monday through Friday.

6. The possibility of trading from any location (the only requirement is having a computer and internet         connection).

7. The lack of provision in order to open.

When trading with a large lever, a relatively small market movements, giving you the opportunity to small amounts, to generate large profits. However, you must be aware that trading with a large lever that you can achieve great profits, and losses, so be careful. All the mentioned features and advantages of this market are the basic reason why the Forex is so attractive and why millions population trader in FX market daily increasing.

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