Seven Come Leverage-7 Reasons Why Forex Is a Superior Trading Arena for Individuals

Over the last decade or so, the Foreign Currency Exchange markets and trading platforms have become a superior arena for active individual investors. Trading world currencies for the difference in exchange rates can be a lucrative hobby and a very satisfying lifestyle. Following are some points to ponder when comparing the Forex market with stocks, bonds, commodities and mutual funds.

1. Liquidity

An average day in the Forex market sees approximately 1.9 trillion US dollars worth of trade. Almost every country in the world has institutional and individual traders who are active and have a personal interest in this largest of commodities. Over 7000 international banks and small and large speculators make up the largest market in the world.

2. Leverage

Leverage is the use of a tool to influence the directional trend of a mass that would otherwise be much more difficult to control, if not impossible. Previously only master traders with a $100 million account had access to the inter-bank currency exchange.

With the recent enormous international growth this market is now open to the home computer. Individual traders now have the same leverage guarantees that international banks have had for years. A very small amount of money can be used to control a very large contract of foreign currency. Up to 200:1 leverage is available, and higher in some cases. This means $1000 can be used to hold $200,000 worth of another currency, with a large account.

3. Brokers

As a trader gains experience, a full service paid broker is no longer necessary. All trades can be initiated and terminated from the trader's choice of office. The home office needs high speed internet, a telephone line, and a computer. Location is only limited to these requirements. The Forex market is operated online by several hundred large banks processing trades of governments and large companies, and has no real central location.

4. Software

A number of free software applications are offered by brokerage houses specifically written for the average home computer. The greater power the computer has will naturally offer more local speed, but most current computers will work fine. These programs offer real-time charting, several dozen indicators, live price feed, or a minimal 10 second delay, and the capability to sell and buy currency pairs immediately online.

Software programs costing $2000 and up are available with advanced features, but are not necessary for the beginning trader. More complicated software may only increase the education period, and hinder time better spent learning trading strategies.

5. Hours of Trading

The Forex market is truly global, trading 24 hours a day every day. Short periods during the weekend have slower activity, but with time differences around the world, these periods are minimal. The Asian market opens Sunday evening in North American time, and all markets run continuously until Friday afternoon. Someone is actively trading somewhere virtually round the clock.

6. Live Practice

Most brokers offer a free demo version of their live software, easily downloaded and installed. No account deposit is needed. The programs work exactly like the real versions, with buy/sell capability, real-time data updates; a realistic $50,000 account with active profit and loss; open, pending and closed trades; and actual stop, limit and market trades. The trader can practice trading tactics until confident and successful.

7. Initial Investment

Recent developments now allow a minimum account deposit of US$250. This mini-account offers lower leverage, but also lower profit and loss. Once a broker learns to trade profitably, this can easily be built into a larger and fully leveraged account.

A minimal $300 investment can realistically be compounded into a $30,000 account in six months, with access to proper training. Brokers naturally offer conservative training courses, so the trader should look elsewhere for more advanced mentoring. Much training is available on the internet, and a website called Precise4XSuccess.com offers access to cutting-edge successful strategies developed by a mathematician. Not all successful strategies are made public. Do your due diligence to find the methods that work for you.

8-45. This article promised to stop at seven, but there are at least several dozen more reasons why the individual speculator might consider foreign currency trading. It is a lucrative, fascinating and very rewarding occupation that can be done almost anywhere and any time you choose to trade.

Good trading, Kelly Archibald.

Kelly Archibald is a lifelong student of precise trading strategies and internet marketing. Go to his website www.precise4xsuccess.com now for the free e-book Forex Freedom and access to many more valuable tools.

The Secret Formula To Picking A Million Dollar Forex Trading Strategies

All successful traders have forex trading strategies that they follow to make profitable trades. These forex trading strategies are generally based on a strategy that allows them to find good trades. And the strategy is based on some form of market analysis. Successful traders need some way to interpret and even predict the movements of the market.

There are two basic approaches to analysing market movements, in both equity markets and the forex market. These are technical analysis and fundamental analysis. However, technical analysis is much more likely to be used by traders. Still, it's good to have an understanding of both types of analysis, so that you can decide which type would work best for your forex trading strategies.

In fundamental analysis, you are basically valuing either a business, for equity markets, or a country, for forex. If you think it's hard enough to value one company, you should try valuing a whole country. It can be quite difficult to do, but there are indicators that can be studied to give insight into how the country works. A few indicators you might want to study are: Non farm payrolls, Purchasing Managers Index, also known as PMI, Consumer Price Index, also known as CPI, Retail Sales, and Durable Goods.

Most traders in the forex market only use fundamental analysis to predict long term trends. However, some traders do forex trading strategies that trade short term on the reactions to different news releases. There are also quite a variety of meetings where you can get quotes and commentary that can affect markets just as much as any news release or indicator report. These meetings are often discussing interest rates, inflation, and other issues that have the ability to affect currency values.

Even changes in how things are worded in statements addressing these types of issues, such as the Federal Reserve chairman's comments on interest rates, can cause volatility in the market. Two important meetings that you should watch for are the Federal Open Market Committee and the Humphrey Hawkins Hearings.

Just by reading the reports and examining the commentary, forex trading strategies in fundamental analyst can get a better understanding of most long term market trends. Keeping up on these developments will also allow short term traders to profit from extraordinary happenings. If you do decide to follow forex trading strategies in fundamental analyst, you want to keep an economic calendar handy at all times so you know when these reports are released. Your broker may also be able to provide you with real time access to this kind of information.

Just like their counterparts in the equity markets, technical analysts in the forex market analyze price trends. The only real difference between technical analysis in forex and technical analysis in equities is the time frame. forex markets are open 24 hours a day.

Because of this, some forms of technical analysis that factor in time have to be modified so that they can work in the 24 hour forex market. Some of the most common forms of technical analysis used in forex are: Elliott Waves, Fibonacci studies, Parabolic SAR, and Pivot points.

Many forex trading strategies in technical analysts combine technical indicators to make more accurate predictions. The most common tendency is to combine Fibonacci studies with Elliott Waves. Others prefer to create entire trading systems in an effort to repeatedly locate similar buying and selling conditions.

Whichever form of forex trading strategies in any kind of analysis you choose, it's best to make sure you learn as much as possible about it and your market. Then you will be able to use you knowledge to create a trading system that will suit your needs, and help you to become a profitable trader in the forex market.

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Spot forex Trading: Little Known Wealth Building Secret Of The Rich and Famous

If you search on the internet you'll find millions of investment programs such as real estate, stock trading, bond trading, mutual funds, CDs, auction programs and various internet programs.

I have not done many internet income opportunities or programs or affiliate programs because I had been lucky to discover a very easy way to make money through spot forex trading, (Foreign currency trading) safely on the internet.

Perhaps you know about only stock trading or bond trading which are common, but not spot forex trading.

Spot forex trading is the most profitable and attractive internet income opportunity because you can do it from home or office and from any country in the world.

In spot forex trading, you don't need to do any marketing or selling or internet promotion to succeed.

In spot forex trading, you don't need to spend thousands of dollars to do any internet promotion.

In spot forex trading, you don't need any stocks or warehousing.

In spot forex trading , all that you've to do is open an account with one of the brokers with as little as $300 or $2000. (http://www.maychic.com/maysearch)

Then follow simple instructions to buy and sell the currencies.

When the price of the currency is low, you buy.

In a few seconds or minutes, the price will go up, and you sell it and make a profit.

By so doing , in a day, you can easily make $500-$1000 by just buying, selling and trading these foreign currencies for about 3 or 4 hrs!

And get this:

You don't even have to be stuck sitting behind your computer buying and selling these foreign currencies.

You can enter all your buy trades and specify the sell prices you desire and then log off.

Whenever the values of these foreign currencies rise and your selling prices reach, the currencies will be automatically sold for you and you make money!

You can do spot forex trading and at the same time keep your day job, because in spot forex trading, there is no work to do.

In the future when you have made hundreds of thousands of dollars, you may then quit your job and just keep doing currency spot forex trading forever and go on permanent vacation!

To understand the beauty of forex trading Picture this:

In the morning, you get up from sleep at 6 am.

You go to your bathroom and have your shower.

At 7am, you hurry and eat your breakfast.

At 7.20 am, you login into your spot forex trading account on the internet and spend 10 minutes to buy about 3 or 4 different currencies, [for example British Pound, Euro, CHF (Swiss Currency) and Yen (Japanese currency).]

You can specify the price at which you wish to sell each currency.

Then you can log off.

By 9 am, you're at work in your office or business place.

You do your job as usual and by 5 pm, you're finished and heading home.

When you get back home around 6.30 pm, you login into your spot forex trading account to see how much money you've made.

Holy Molly, there in your account it says you have made $750!

"Is this for real?", you wonder...

Yes, it is. (Your eyes are not deceiving you...)

$750 in a day for just clicking your mouse twice and doing no work?

(Whereas at your job, you work 8 hrs, but make only probably $150..)

This is how easy it is to make money from spot forex trading. (http://www.maychic.com/maysearch)

But before you use real money to open a live spot forex trading account, you have to open a free trial (demo) forex trading account and practice first, to understand how it works and to acquire the right skills.

This free demo (trial) spot forex trading account (forex simulation trading) will help you to reduce a lot of risks that can lead to loss.

In spot forex trading, you can choose how much money to invest, how much money to make and when to make it.

You can make money daily, 365 days all year from spot forex trading.

Your computer can be transformed into an "ATM" machine that cranks out cash for you daily (without large investment or hassles) from spot forex trading.

In spot forex trading, you can choose what type of risk you can manage, when to invest and when not to invest.

In spot forex trading, you're the boss. You may do as you please.

When spot forex trading is compared to other investment programs such as stock trading, bond trading, mutual funds, real estate and regular business, it is evident that spot forex trading is the fastest and greatest way to make money in the world.

Spot forex trading is a 2.5 trillion dollars daily business and it is larger than all the stock trading in the world combined.

These are some of the reasons why I believe that forex trading is the fastest and best way to create fantastic wealth.

Perhaps from reading this article you'll now come to know why spot forex trading is the secret behind the greatest wealth on earth and why it has been kept hidden from the average people of the world and therefore little known to the masses.

May these spot forex trading insights open your eyes to the possibility of infinite wealth and success that can be yours from spot forex trading.

Please feel free to print or publish this article anywhere and read and also send to your friends and well wishers and please preserve the author's resource box below.

Warmly,

Ikey Benney

Use MaySearch Engine to search for online investing opportunities, financial information, shortcut to internet riches programs, products and services. Please click on the link : online investing opportunities (http://www.maychic.com/maysearch)

DayTrading And Forex Today

Online trading is great way for serious investors to make money, but inexperienced traders often wind up with big losses. A good set of instructions can minimize the risks and save months of expensive trial-and-error learning.

Day Trading

Day Trading had its heyday during the bull market of the 1990's. All the amateurs have since dropped out, but day trading is still being practiced by professionals. There are fewer opportunities in the current market, but skilled investors can still find them if they know what to look for.

FOREX Trading

The Foreign Exchange Market (FOREX), the world's largest financial exchange market, originated in 1973. It has a daily turnover of currency worth more than $1.2 trillion dollars.

Unlike many other securities, FOREX does not trade on a fixed exchange rate; instead, currencies are traded primarily between central banks, commercial banks, various non-banking international corporations, hedge funds, personal investors and not to forget, speculators. Previously, smaller investors were excluded from FOREX due to the huge amount of deposit involved. This was changed in 1995, and now smaller investors can trade alongside the multi-nationals. As a result, the number of traders within the FOREX market has grown rapidly, and many FOREX courses are appearing to help individual traders increase their skills.

As a matter of fact, it's advisable to take FOREX training even before opening a trading account. It is vital to know the market mechanics of FOREX, leveraging in FOREX, rollovers and the analysis of the FOREX market. Due to this fact, potential FOREX traders would do well to either enroll in a FOREX training courses or even purchase some books regarding FOREX trading.

There are pros and cons to enrolling into a FOREX course. For beginners a FOREX course is a rapid method of learning the basics of FOREX trading. Not much time is spent on history of the market or arcane economic theories. Often, on-line or phone support from a skilled FOREX trader is available to answer any questions. Also, the information is condensed and practical, often with graphs and charts.

The disadvantage is the price, as courses are more expensive than a paperback from the bookstore. Also, the course may just teach the approach of the trader who wrote it, and individuals have different trading strategies. The student may grow accustomed to the logic and focus of the teacher without coming to realise that nothing is predictable in the FOREX market, and many different strategies will bring profits in varying market circumstances. Also, knowledge of practical applications may not be enough, as the FOREX is highly unpredictable and there are many external factors, such as political issues, affecting the flow of finances in the market.

The best advice would be to do some background research on the FOREX market first, and then enroll in a course.

Jay Shipper likes DayTrading and the Forex http://www.lazytrader.com http://www.stock-trading-now.info http://www.forex-now.info

Learn By Hands On Forex Trading: Demo Accounts Vs Mini Accounts

If you are new to Forex, you are likely overwhelmed by the sheer amount of information you are finding about currency trading. Although the concept of trading the currency markets is simple to understand, the actual trading methodologies and understanding of how, why and when trades are executed can be hard concepts to grasp and fully understand. If you aren't aware by now, forex trading is not without substanial risks.

There are several schools of thought on how a new trader should progress from learning to actual live trading. In this article we will discuss the best ways for a new trader to learn how to trade the forex and make their first live trades.

To start out, I can not stress enough the need for hands on trading. This is why you will often hear it recommended that new traders start trading with a demo account. What is a demo account? Many online forex brokers offer something known as a "demo account" which is a fake account that you can trade until you feel comfortable trading your own funds. Demo accounts behave just like real accounts, the only difference is that the money you are trading is not real and no actual trades are ever executed.

The purpose of using a demo account if you are new to Forex trading is to get you comfortable making trades and to help you become familiar with the brokers trading platform. You can cut your proverbial teeth so to speak without risking any of your own funds. This makes demo accounts good for a brand new trader who just wants to see how trading works. There are some drawbacks however to using demo accounts to learn Forex trading.

The biggest downside to using a demo account is that you will likely only be able to trade standard size accounts with a demo account. If you intend to trade mini accounts, as many beginning forex traders do, a standard size demo account is going to behave differently than a mini account. Your margins are very different for a standard account versus a mini account. If you become accustomed to trading a standard size account, your trading methodologies will show it. This is because the larger margins offered on standard size accounts allow you to take greater profits from smaller movements in currency prices.

The other major downside to trading with a demo account for learning forex is that as a trader, you need to carefully manage the emotional aspects of trading real money. Since a demo account is fake money, detachment is easy to come by. Once you start trading your actual funds, you might just find that your tolerance for risk is much more conservative. Ideally, as you are learning to trade you are also learning how to manage your risks most effectively.

So what is a beginning trader to do? What is the best way to learn to trade the Forex, hands on?

Once you have read, studied, and completed any courses on Forex trading that you may be taking, you are ready for probationary live trading. The single best way to trade the Forex is to just Do it. Now, this does not mean to jump in and trade a full size account with real money, this would be an enormous risk for a new trader and not a very smart move indeed. What you can do is to find a broker that offers mini accounts. Mini accounts typically start at $200 and typically give you 100:1 leverage. That said, as of this writing, there is one broker (Easy-Forex) that allows you to trade a live mini account for as little as $25.

For less than you paid for any of your books, courses or training materials, you can actually try live trading. You will be amazed at how after just a few trades, the stubborn concepts seem to start making sense and you begin to understand Forex trading.

Now, if you do decide to begin your trading with one of these tiny mini accounts, you should start by making several very small trades. You should also be trading with the same system or methodology that you are trying to perfect. Your profits will likely only be a few dollars since you are trading on a small margin. This is good, however because the reverse is true as well, you are only ever risking a few real dollars. If you happen to have a series of loosing trades and wipe out the funds in your demo account, you can consider it the least expensive education you could possibly get in actual forex trading. Much better than loosing large sums of funds, and more realistic than trading a demo account. Just learn from the experience, and consider it a good deal on a valuable lesson.

Once you are comfortable trading your mini account, you can always have it converted to a regular account (with an additional deposit) if you choose. Overall, it cant be stressed enough, the best way to learn the Forex is to have experience with live hands on trading. This article showed you ways that you can do this at a minimal cost and with the smallest amount of risk.

New to Forex? Check out Our Free Forex Training or read these Forex Articles. Looking for an easier way? Learn More about a Managed Forex Account

5 Reasons to Trade Forex Instead of Stocks

While Forex trading is becoming more popular in the United States, the vast majority of investors still do not understand the massive advantages offered in the foreign currency market when compared to equities or fixed income trading. When you fully grasp the following concepts, you'll understand why you might want to reconsider your current investment strategies.

1. Currency prices are not heavily influenced by institutional investors. In stock trading, there is a limited amount of volume on a daily basis. Each stock has a specific number of shares on the open market and trade prices are governed by the number of people attempting to buy or sell shares at a specific point in time. This makes the market vulnerable to price swings when a large investor is attempting to buy up or unload large amounts of shares. For example, if some pension fund owns 10% of a company and suddenly decides to liquidate their position, the market is now flooded with sell orders. Since the amount of shares attempting to be sold will outnumber the amount of buy orders, the price of the stock will start to drop as the number of buyers days up. This creates losses for the remaining shareholders. On the other hand, the forex market is so massive and has so many investors that no single investor can possibly have a major impact on pricing. There are too many units of Euros, Dollars, Yen, etc for any single institution to hold even close to a controlling interest in any currency.

2. Margin requirements are significantly lower in forex trading than equity trading. While the exact amount of margin allowed is determined by each broker, the restrictions are usually much less stringent when trading forex. Margin allows the investor to "play with house money." In essence, you're borrowing money from the broker to invest in your own account. While this can be risky, it can also be insanely profitable. For example, let's say you have $10,000 of your own money to invest. If you open up a margin account at an equity broker, you can usually margin up to 50% of the value of stock. So if you buy $10,000 in Microsoft stock, you can borrow another $5,000 to own a total of $15,000 in value. With your forex account, the margin requirement is often as low as 1%. Which means that if you buy $10,000 in Euros, you can use your broker's money to buy another $1,000,000. So you now own over $1 million in Euros. Now lets say that the value of each investment increases 10%. Your $15,000 in Microsoft stock is now worth $16,500. You sell it, pay back the $5,000 you borrowed, and you pocket $1,500 in profit (minus any fees or interest). Your return on investment is 15%. If your Euros went up 10%, your $1 million is now worth $1.1 million. After selling and repaying your broker, you profit $100,000 before any interest. That's a return on investment of over 1,000%. Of course, you need to be extra careful when trading on margin. Imagine if the transaction went the other way. You'd be in a much bigger hole in the forex scenario. But the potential for enormous gain is there and is one of the major reasons why forex trading is so attractive to serious investors.

3. Forex trading is open 24 hours a day. Unlike the U.S. stock markets, you can trade forex any time of day from Monday through Friday. If a major news story breaks when you're holding stock, and it's after hours, you're stuck holding onto your position until the market opens the next day. By the time this happens, everyone else knows the news and there's thousands of buy/sell orders waiting when the opening bell rings. This will dramatically influence your trade price and negate any advantage you might have had by being one of the first to react. Keep in mind that many corporations withhold major news such as earnings reports and personnel moves until after the market closes. They do this to minimize emotional trading, which is smart for them to do but also hurts savvy investors. Since Forex trading is open 24 hours, you can place your trade order whenever major events occur.

4. The foreign exchange market is more liquid than the equity market. Forex is the largest market in the world. Every day, an average of $1.4 trillion dollars is traded, and the amount of securities (foreign currencies) is minuscule when compared to the number of companies traded in the equities market. This means that there are always buyers to be matched with sellers, which means that you'll have a much better chance to get a fair and accurate price on your trade than if you were trading a low volume stock where the bid and ask spreads can be very large.

5. Forex trading offers the advantage of limited risk. This is one of the large advantages over the futures market. When you buy a futures contract, you are obligated to buy or sell a specific amount of a specific commodity at a specific time for a specific price. Which means that if disaster hits, you're out of luck. For example, lets say you buy a futures contract to sell corn. If news breaks that reports an outbreak of deaths caused by a pesticide used in corn crops, the price on your contracts will drop through the floor, limits will drop, and you could be stuck in your position and end up taking massive losses. This would not happen in the forex market since you can leave your position at any time.

This article is just a small piece of the free Forex Trading Course at forexgameplan.com. Go learn about this incredible market and sign up today while the 30 day course is still free.

Discover An Effective Forex Trading System

What is the importance of an effective Forex trading system? An effective system provides you the trader, incomparable prospects to increase your earnings. And why not?

The Forex market is the largest financial market in the world with average daily trading of the currencies going over US$1.6 trillion. One other thing, its the most liquid market there is, to trade in. Forex market or Foreign exchange market is the trading activity that refers to the synchronized buying of one currency, which is called the base currency while selling off a second currency, called the counter or quote currency. As youve probably gathered, these currencies are traded in pairs. Some of the most popular pairs are US Dollar/Japanese Yen (USD/JPY) and the Euro/US Dollar (EUR/USD. This is done with the clear intent to profit from the appreciation of the e.g. U.S. Dollar. These three currencies together with the British Pound, Canadian Dollar, Australian Dollar and the Swiss Franc are the most popular currencies traded, accounting for nearly 70% of the trading done in the United States marketplace.

Why is there a need for an effective Forex trading system? One reason is because of the unique characteristics of the Forex trading market.

For one, Forex trading is conducted differently from the stock market or futures trading. There is no central physical location, where the transactions are conducted.

Another unique characteristic is a majority of the transactions are done over the telephone link ups or electronic exchanges, which makes this an over-the-counter or interbank market. This makes it ideal for the use of computers and technical analysis, to take advantage of profitable opportunities.

There are more chances to increase profits, because of the attractive pricing. Forex quotes are based on interbank prices regards of the transaction size.

Orders are effectively carried out, because orders are immediately confirmed on line or over the phone, youll know the rate at which the order was executed.

Finally, the margin system is in your favor. With 2% of the absolute value of the interbank contracts, you can still trade in the largest marketplace, provided you are able to maintain the margin requirements.

With all the benefits and differences a Forex market has, what makes it crucial to for you to have an effective trading system in place?

As with all trading activities, trading foreign exchange carries a great risk. Youll need to ascertain for yourself what these risks are. The high degree of leverage is a double edged sword; it can work for or against your benefit.

You should gauge the level of your knowledge and experience. Should you hire a financial advisor? Have you decided on the amount you are willing to risk and at what financial level you are willing to take losses?

For with the unlimited potential to earn, comes the possibility of great financial loss. There is no fool-proof Forex trading system.

Bob Hett offers great tips and advice regarding all aspects of
Forex marketplace. Get the information you are seeking now by visiting http://www.forexinformation.info

What A Forex Broker Does

 

Even if you have bought and sold homes before, you probably would not want to do it without the help of a licensed real estate broker. The housing market is constantly changing, and you want someone that understands where that market is headed. The added expertise in the field gives you a competitive edge over the rest. The same is true when dealing the FOREX market. A FOREX broker can be a source of information and strength in your trading endeavors. Even seasoned traders, rely heavily on the help of FOREX brokers. Trading is risky business, and your broker can be there to help ease some of the risk off of your plate.

Even if you have bought and sold homes before, you probably would not want to do it without the help of a licensed real estate broker. The housing market is constantly changing, and you want someone that understands where that market is headed. The added expertise in the field gives you a competitive edge over the rest. The same is true when dealing the FOREX market. A FOREX broker can be a source of information and strength in your trading endeavors. Even seasoned traders, rely heavily on the help of FOREX brokers. Trading is risky business, and your broker can be there to help ease some of the risk off of your plate.

The trading decisions are still ultimately up to you, but having a broker allows you to work quicker and more efficiently. Utilizing your brokers system can mean quicker trades 24-hours a day. It is like having someone work for you while you are away on vacation, or even working a full time job. Dont underestimate the value of a reassuring knowledgeable voice on the other end of the phone. With all the technology available, it still does not give you that personal guiding hand in the process.

Technology and your FOREX Broker

Many people believe that the FOREX Broker is a dying breed. With all of the technological advances in field, many individuals now rely heavily on computers and see no need for a broker. I would caution this line of thinking, however. If you want the convenience of an online system but the security of having someone there to answer your questions, find a brokerage firm that does both. Most FOREX brokers understand the need for 24-hour access, and have online portfolios and trading available to their customers. When you have a tough questions or problem, you will be glad you kept your broker around.

Top broker benefits

FOREX brokers vary greatly depending on the size of their firms. You dont necessarily have to go with one of the leaders to have a good trading experience, however. You will want to look for a broker firm that offers real-time access, price certainty, competitive pricing, and competitive spreads.

Generally speaking, the bigger the FOREX broker firm, the better their spreads and prices will be. They have more pull in the market and are able to negotiate prices better. Weigh all the benefits and downfalls to each firm to ensure an educated decision. A good price does not always mean the best broker, so choose wisely.

Choosing a Broker

There are certain questions that you will want to ask to your prospective FOREX broker. Such questions include:

1. What is the spread? (Hint: The lower the spread the more money you make!) a. The spread is calculated in pips and is the difference between the price at which a currency can be purchased and the price at which it can be sold. Simply put, your broker has to make money. Thats how they stay in business. Unlike traditional stock trading where brokers charge commissions, FOREX brokers make money off the spread. The lower the spread the more profit that there is for you.

2. What are your credentials? (Hint: There are certain affiliations you should look for.) a. Most large brokerage firms are connected in some way to a bank or financial institution. Since the majority of their business is based on credit, this is a very important partnership. Their affiliation offers you the opportunity to invest thousands more than you could with smaller firms. It is also recommended that your chosen FOREX broker be registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Refer to your brokers website or call directly to find out if they have such affiliations.

3. What tools are available to help me learn more? (Hint: Not all broker firms are created equal. Find out who offers the best resources and information to help you make the smartest trading decisions.) a. This is a critical question to ask. It is one thing to fulfill your trade requirements, but a FOREX broker needs to also provide you with educational tools. Ask what kind of tools they offer for their clients. A good company should offer real-time charts, technical analysis tools, real-time news and data, and software or website support. Be weary of any company that refuses to share information or trial versions before opening up an account. You will want to try out their system before you choose to invest money in it. Many offer test accounts that allow you to play the market without actually investing any capital.

4. What is your leverage? (Hint: This is the determining factor on how much money you are able to make with each investment.) a. Leverage is the key factor to your success. As discussed earlier, the FOREX market runs mostly on credit. Your FOREX broker is able to supply you with a different margin depending on their size and your needs. The higher the margin the more money you can possibly make. If you are limited on funds, finding a high margin FOREX broker is top priority. If you have the capital already, you may decide that a lower margin is a smart choice for higher risk transactions and vice versa.Brian Channell is an online entrepreneur. Please visit www.MyForexEducation.com to learn more about Forex trading