Archive for December, 2009
Theres so brokers out there, both online and offline claiming to be the best with all the features you need and that claims to be the easiest to turn a profit, it's overwhelming trying to choose a broker. Read on to discover how to choose the broker that's best for you.
When you start to negotiate the Forex, you need to make sure you choose a broker or brokerage firm that is registered with the appropriate regulatory bodies. (Not good if you discover that your broker is unregistered, after they had stolen all your money)
In the United States, United States, brokers should be registered as Futures Commission Merchants (FCM) with the Commodity Futures Trading Commission (CTFC) and should be a member of the National Futures Association (NFA). You can check the status of your broker Futures on the NFA web site: nfa.futures.org / BASICNET
In the UK, look for Forex brokers who are registered with the Financial Services Authority (FSA). Check out UK based Forex brokers on the FSA website on the Internet: log fsa.gov.uk / home.do
You need to check that your broker provides adequate support. At least make sure the broker offers 24-hour phone and email. It's a good idea, before you choose a particular broker, to contact lines help of a number of brokerage firms. Ask them a question about your service. You need to find out how quickly they respond, and also respond to your question to your satisfaction. This will give you a good indication of the quality of your help if you need it later. (Of course, the quality of aid before opening the bill does not definitively prove that you will receive the same quality of help later.)
If you want to trade the Forex using your own computer, then you need to make sure that your broker offers online trading facilities. You also need to be able to view Forex quotes in real time. It is not good if the citation of foreign displayed on your brokers site is: GBP / USD = 1.9714/1.9719, but when you open a trade, each costs you GBP $ 1.9740. If it is found that the price shown was the exchange rate 30 minutes ago, then you need to find another broker.
You also need to be able to view your account, including the margins used and not used in real time.
When you put an end to trade, you should be able to buy or sell at the price quoted today. In other words, the broker must use a WYSIWYG display. (WYSIWYG stands for "What You See Is What You Get "and is pronounced wiz-ee-wig).
Your broker will offer one of two types of online access. Each has advantages and disadvantages. The first type is a Web-based software – This site is hosted on your broker on the web. With the web-based software, you can enter your account from any computer with access to Internet, for example, your own computer, Internet cafà ©, office computer, etc.
The second type is a client-based software running on your own computer. You can log into your account from your own computer. (Unless you install the software on other computers – NB this is generally contrary to the terms of service). The advantage of client-based systems is that they are usually faster than web-based systems. A disadvantage (for Mac users), is the software is usually available only for Microsoft Windows systems.
It is essential that you have a connection fast Internet connection (ie DSL, or broadband). Dial-up is simply too slow, and by the time you open your Forex trade, the service will, likely changed the citation in the display.
You need to find a broker that offers mini – and / or micro-lots. You can open trading accounts these smaller lots for just a couple hundred dollars. Some brokers offer fractional lot sizes (called fractions), so you can create your own business unit size. You also need to make sure your broker offers trading pairs in all seven major currencies: USD, EUR, JPY, GBP, CHF, CAD and AUD.
Look for a broker who offers the lowest bid / ask spreads. The Bid / Ask spread is normally 5 pips, but some brokers offer spreads of only 3 pips or even 2 pips. What is the requirement of your broker margin? This can be anything from 0.25 percent to about 5 percent. Remember – smaller margins mean you need deposit less, and give you greater leverage, but they also have the potential for major losses.
You need to find out how your broker calculates rates rollover. Rollover charges are charged to your account when trade extends (rolls) after the end of the trading day on the next trading day. Rollover charges are based on the difference between the interest rate of the country's base currency and interest rate of the country of the listing. For example, for the currency pair CHF / USD, the rollover rates are based on the difference in interest rates between Switzerland (the country of CHF) and the United States (country of USD).
And finally, time of your broker's trading correspond with the time of international trade FX?
Chen Petersen is a helping people become familiar with Forex and learn how to avoid the pitfalls and profit from Forex trading. Check out his site Forex Info for more free Tips on how to trade Forex and profit from currency trading.
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GBP/JPY Forex Forecast Sept 7 – Sept 9