How to Choose Forex Broker
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How to Choose Forex Broker

One important thing in Forex investment is to choose a broker. Broker can be individual or company which become mediator between you and the market. The thing is that choosing a good broker can be a difficult task for the trader especially when you are novice. There are many brokers who claim to be the best and the cheapest broker. But all you need is a broker who is reliable among those brokers. To find a good, reliable broker itself can be tricky; therefore you need some criteria to pick the best one.

Broker is very crucial in helping you in the trading. Make sure that you chose broker who offers low spreads in major pairs. Spread is the difference between the bid and ask price of a particular currency pairs. The spread is the commission for the brokers. There are three commissions regarding the spread which are fixed spread, variable spread, and commission based on a percentage of spread.

The next thing to consider is the leverage. You have to really understand the leverage offered by your brokers because the leverage can be give you profits and also losses. You have to handle and control your leverage in order to gain more profit. Many brokers offer bigger leverage which can give you potential profits but you have to choose it based on your investment strategy to avoid a big loss.

The brokers are there to facilitate you in communicating with the banks to selling and buying currencies. Choosing regulated and reputable broker is also a significant point in selecting a good broker. Most registered forex broker are reliable since their name is under regulatory authority such as Futures Commission Merchant (FCM), Commodity Future Trading Commission (CFTC), National Futures Association (NFA). Those authorities exist to protect the investor against fraud, manipulation, and illegal trading. Although it depends on the investor himself to choose regulated or unregulated one, the security is essential to protect you from the fraud. Check the broker’s regulatory status and financial background to ensure that you are choosing the right broker.

In addition to that, you have to consider is the account size. You need to know the minimum balance to open a trading account. It is also important to know since it is related to the use of mini and micro accounts. Mini account requires small amount in your account and works with low pip value.

In conclusion, choosing broker is more personal decision. If you feel that you are uncomfortable and unsatisfied with your current broker you can always change your broker. The brokers exist to help you in trading after all.

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Simple Forex Trading Guide
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Simple Forex Trading Guide

It is undeniable that forex market is the largest and the most liquid market in the world with over $3 trillion in daily turnover. Yet, it is no need to have large initial capital in forex trading. It allows people to trade with low initial capital. The market offers opportunity in profits as much as the losses. The profit is gained at the volatility of the market’s price. In simple words, you earn profits when buying a pair of currency then sell it at high price or the other way around.

What you need to know is the trend. Being able to identify the trend is very crucial in forex trading since the trend can give the traders insight of the direction of the rate of a pair of currency. Identifying trend can be done through the distinct pattern made by the price. If it is uptrend, the chart will form higher peaks and valley. At this situation, traders should buy the pairs. When it is downtrend which means that the rates are decreasing, it is better to sell the pairs to make profit. You should monitor the trading trends in order to know how the market movements based on the time frame that you chose whether it is short-term or long-term trading. But you have to remember that no one can predict the future even for the professional traders.

The following thing you should know is leverage. It is used to refer the ratio of
invested
amount
related
to
the
trade’s
actual
value. Forex brokers often offer different leverage to their traders. For example when you trade at leverage 1:100 it means for every $1 that you invest, the brokers invest $100. It means that you can control $10000 for $100 that you invested. The higher leverage offered the higher opportunity to profit and higher risk losing your money.

Last but not least you have to know about the Stop Loss and Take Profit. Since forex market is very risky, traders can use these strategies in order to prevent from a great loss and realize the profit made. By using stop loss, traders can control the maximum amount that they can lose on the trading. Stop loss will automatically close your trade when it reaches the maximum amount you have decided; meanwhile Take Profit is similar to the stop loss yet it works on the profit. When you reach certain level of profit, Take Profit will close your trade. Finally, a trader should make a good money management to become a successful trader. Aiming at a big return most likely sounds a big loss. Being consistent to your plan and always learning will result in long term success.

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Getting to know Forex
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Getting to know Forex

Have you ever heard of Forex? Forex or foreign exchange market is the largest trading market in the world in which people do the trading of currencies. It is also the most liquid market in this entire universe. It always opens for 24 hours a day except weekend. Anyone could participate in the Forex trading since it can be done via electronic by using computer and Internet connection. Yet, most of the dealers of forex trading are banks with few of insurance companies and other financial firms. Because Forex allows traders to trade at any amount of money, banks are the dominant dealer in this market. As mentioned beforehand that it is all done through via telephone and computer network all around the world, so Forex market does not have any central marketplace.

In Forex market, a currency of one nation is traded for another currency which means it always quotes in pair. However, the major currencies that have been traded are the Euro Dollar (EUR/USD); the British Pound (GBP/USD); the Japanese Yen (USD/JPY); and the Swiss Franc (USD/CHF). Other important currency pairs are the Canadian Dollar (USD/CAD) and the Australian Dollar AUD/USD. The currency prices are quoted in pips (percentage in point).

Just like any other trade, trading in Forex market also means buying and selling another. To gain profit in Forex, investors should know many factors which influence the value of the currencies. Those are how and when to place trades at relative interest rates, economic stability, political stability, and the trade status of the country. Moreover, investors should have strong analysis on those issues and also come with good strategies in trading for example leverage or stop loss order.

Leverage is used to profit from the fluctuations in exchange rates between two different countries. It is loans provided by the brokers that handling the investors’ account. It is often use to take advantage for short term fluctuation in the trading market. Even though it may give some advantage, leverage can also give a great loss if the market goes against the investors. On the other hand, stop loss order is used to protect the investors and prevent them from a potential loss. It is a strategy where investors could predetermine a particular point for their entry or exit price. When the market price exceeds the entry/exit price, then the stop order will become the market price. This strategy can also give a shortcoming effect especially when the market price could eventually go higher.

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Why Forex Traders Fail?
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Why Forex Traders Fail?

Invest in something especially in Foreign Currency Exchange maybe seem so easy. Forex trading offers huge profit for anyone and there are some people who can achieve a great success in currency trading. In fact, statistics reported that over 90% of Forex traders fail to success. It means that the chance of losing is also great in spite of the profit make. If the losing number reaches 90% then it means that there must be reasons why the traders confront the same failure.

Those 90% traders fail due to a major common reason. They lack of knowledge in currency trading or in other word, they are not ready yet. Due to the minimum experience but they still insist to enter the trading market, they dig they own grave. Many of them lose their money because they take it less serious in learning trading. Many others depend too much on their trading tools or software. Therefore, before joining a trading market, learning and consulting to trading experts is much needed to avoid a big loss. By learning and having a good plan, a trader can avoid future risks since Forex trading is extremely unpredictable.

Many traders especially beginners fail to achieve success in this business because they are not discipline and do not follow their trading plan. Being discipline and consistent to the trading plan can lead traders to gain profits. Traders should have known when to hold or exit the trading. On the other hand, because of lacking in emotional management, fail traders tend to follow their greed and end up gain nothing. Traders should control their emotion since in trading being patience and calm is absolutely needed to face every situation including when the market turns against the traders and end up losing the trade.

The third is that common people have unrealistic expectations. One main reason people put their money in Forex trading is because they want quick money. Many traders also put all their money in the trade with the expectation that they can double it in a short time. Many of them believe that Forex trading can give them instant money with a little effort, yet this assumption is totally wrong. Success requires hard work. It is one little thing many traders forget that the currency trading is undoubtedly potential and it also comes along with damaging risk.

Finally, to gain profit in Forex trading is possible. However, there are many things one should prepare and maintain if he wants to be a success trader. Learning and studying hard, planning good, managing the money and emotional well, are the things that every trader should have.

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