First thing that you must
learn about Forex trading market is to find the right broker for yourself. What
do you understand by a Forex broker? A Forex broker is simply the middleman
between the seller and the buyer involved in any transaction.
In Forex, it is very important to have a well established network in the market
and have good number of contacts. Your Forex broker does this for you in a much
efficient manner. If you search the internet for forex brokers, you will see
that the market is flooded with many. A Forex market is a decentralized market
and so there is no fixed place to find the Forex brokers. The brokers spend a
lot of money on advertising their sites and many new traders buy into them
following their ads.
Different brokers offer you different sets of strategies. There are no standard
tricks and strategies to make profit in Forex trading. If you are a new trader,
then you depend completely on your Forex broker. Thus this choice must be made
very wisely. You must now face the bitter truth about these Forex brokers.
Though Forex brokers are an important part of your Forex trading system, they
can also be your rival in the business. Al the bad Forex dealers are also
termed as the ‘market makers’. They may quote you a price that is nowhere near
the actual market price of the underlying security.
Forex brokers are smart enough to choose their targets. They will not play
games with an experienced trader. They will rather trick the new traders who are
not much aware about the market for their money. These market makers will
advice their clients wrongly. For example, they ask the clients to trade on
margin by setting the stop loss orders so the market makers can select to shut
trades almost at will at the time of busy markets at prices set according to
their profits. Such brokers will quote you prices for which they can get the
best opportunities to take your money. These brokers present you with the false
version of the trading market.
These market makers charge their clients for transaction fees equal to certain
pips. Many traders are aware of this fact but what they do not know is that
these market makers take up a position exactly opposite to yours in the market.
In this way, your loss becomes their gain. Also the many available retail Forex
traders do not have great benefits. Much of the money that the retail traders
have on deposit is transferred to the market makers in some way or the other.
But these market makers are not completely scams. Also the fact that all
traders must understand is that the market has both the good brokers as well as
the market makers. So it is up to you to choose the good ones for your trade
assistance. Letting the market makers or the wrong Forex brokers take care of
your trade is like leaving it in the hands of your enemy.