One of the most common ways of getting started with Forex trading is through a Forex broker. When you are a beginner Forex trader you are most likely to opt for the same alternative, but the mistake that most rookie traders make is choosing the wrong broker. If your first step does not go right then you can merely depend on luck and in a competitive field like the Forex market, being lucky is very rare. The best alternative is to have the right information and also use it well.submitted by HafizzatRusli14 to u/HafizzatRusli14 [link] [comments]
If you are thinking that how a Forex broker can be so important, here it is. The broker you choose will be the one that will be keeping your invested money in the account. Apart from this, a good broker will also be providing you their expertise about the changes happening in the market. This expertise comes with a fee but it is a small amount to pay for the information that can help you not just earn profits but also convert a loss into no loss.
Elite Trading Strategist
Choosing The Perfect Broker
A good broker will be transparent regarding his fees, commissions, etc. but mostly it is not the case. If you have not done your research on a broker, well you might have to face some unwelcome surprises. So you do not have to face all these unpleasantness, here is a guide to choose the right broker.
Hafizzat Rusli trading masterclass
1. Figure Yourself Out As An InvestorDifferent brokers offer different kinds of services and you will have to figure which kind of service will suit you the most. Whether you are going to invest big or small, how often you would like to invest, these are the things that can help make a final choice but that is not it. Choosing the right broker takes a lot more than this.
2. Figuring Your AffordabilityThe brokerage companies charge you a transaction fee. If you are a beginner and invested a small amount just to try your luck or to gain initial experience. Turns out you earned the profit, but what if the brokerage fee is 2 times more than what you earned. This will be the kind of shock that will leave you feeling humiliated for not choosing wisely. As a beginner choose the broker with less fee but also make sure if the account being provided is secure. The next point is about all that.
3. Always Choose A Regulated Broker FirmA regulated is important to choose because that will automatically take care of the various security issues. If you are choosing a broker in the United States of America, he will be regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Similar organizations are present in France, Germany, United Kingdom, Austria, Canada, and Switzerland. The presence of regulating organizations does not mean that all the brokers are regulated so pick wisely. If you want to be sure if your broker is actually registered under the NFA, you can visit the website of NFA and cross-check to be sure and safe.
4. Be Thoroughly Informed About The Terms And Conditions Of The Brokerage FirmThe rules and regulations of a brokerage firm can be tricky to understand at times. If you do not take your time to understand these terms well and choose the broker just like that, there will be times when you will want to change the past but will not be able to. For example, some brokerage firms do not allow you to withdraw your investment or trade it instantly. In situations like these, you will be at a major loss. Although such terms also come with benefits, but that depends on the kind of investor you are.
With some brokers, the rules are as such that closing your account will be a tedious task. The broker does not want to lose you as a client and he/she can try various things for this. So, if you are willing to withdraw back you might have to waste a week's time or more with unnecessary things like filling lengthy forms, speak to the company's representative, take surveys, etc.
5. Find Out If You Will Get 24/6 coverage24/6 means that you can consult your firm's customer service anytime between Sunday afternoon and Friday afternoon. Before you finally invest, put your broker through a small test. Give a call and see how quick and relevant are the responses from the broker's end.
Apart from choosing the right broker, you will also need to have a mentor to learn more about currency analysis and other factors responsible for Forex trading. You can always look up for a trading course online but if you want the best then Ha is your answer. to know more about his Forex trading course click here.
submitted by Horizon_Trading to u/Horizon_Trading [link] [comments]
A New EraAlthough it might seem easy to invest in Forex nowadays, by just logging into an account with a broker, deposit some money and start actively trading; it has not always been like this, as forex industry has rapidly changed in the past three decades.
Before technology and free-floating currencies took over the industry, world currency exchanges were operating under the Bretton Woods System of Money Management. This agreement established rules for commercial and financial relations among top economies, tying their currencies to gold. Hence, a currency note issued by any world government represented a real amount of gold held in a vault by that nation. When in July 1944 delegates from all over the world sign off the pact, the main goal was to reduce lack of cooperation between countries and therefore avoiding currency wars. This process of regulating the foreign exchange brought to the foundation of the international money fund (IMF) and the International Bank of Reconstruction and Development (IBRD), today part of World bank Group.
However, in the early 70s the real-world economics outpaced the system, dollar suffered from severe inflation cutting its value by half. At that time unemployment rate was 6.1% and inflation 5.84%. Finally, in August 1971, U.S. government led by Richard Nixon took away gold standard, creating the first fiat currency and replacing Bretton Woods System with De Facto. Together with this there were other important measures taken by the USA president to combat that high inflation regime:
1971 represents the beginning of a new forex trading era, bringing this market to be the largest and most liquid in the world, with an average of daily trading volume exceeding $5trn. All the world’s combined stock markets don t even come close to this, what does this mean to you?
In an environment which is controlled by free-floating currencies moving constantly, following principles of supply and demand, there are constant and exciting trading opportunities, unavailable when investing in different markets.
In this article are shared main features of what is forex trading today and how can be an incredible new source of income for everyone who is into financial markets.
What Is Forex?Forex is the acronym for foreign exchange which intends to be a decentralized or over the counter (OTC) marketplace, where currencies from all over the world are traded 24 hours, five days a week. Main financial centres include New York, Chicago, London, Tokyo and Frankfurt for Eurozone. It is by far the largest market in the world in terms of volume, followed by the credit market. Being highly liquid is an important feature that allows traders to be able to enter and exit their positions very quickly. Nevertheless, while trading forex, an investor should be aware of several components:
Dynamicity – forex is an extremely fast environment, this means that currency rates can move very fast, influenced by price action signals and fundamental factors. Therefore, going into forex trading, one needs to be aware of adopting serious risk and money management strategies in order to be effective, limiting losses.
Zero Sum Game – trading forex is not like investing in the stock market but is known to be a zero-sum game. For example, going into the equity market buying some tech shares, they could both rise or decrease in value. In forex is different because currencies work in pairs; for instance, an investor decides Euro will go up he or she is doing it against another currency. Thus, in this specific marketplace one currency will rise while the other will fall, meaning an investor is buying the currency hoping it will appreciate to the other, or selling the one that will depreciate.
See image below:
Figure 1: Main traded currency pairs
Currency pairs are composed by a base and a price currency. Main forex trading principle is how much price currency an investor can buy using 1 unit of the base, thus, the base currency, which is the first one in line within the quotation, is always equal to 1.
Because like every financial instrument currency pairs are driven by fundamentals of supply and demand, forex is intensively influenced by geopolitical and macroeconomic factors.
Capital Markets – these are the most visible indicators of a country economic health, where usually the healthier the economy the stronger the currency. For example, a rapid sell-off from a country will show that nation is not economically stable, subsequently investors will think negatively of it depreciating its currency.
Moreover, many countries are sector driven, this means that their currencies are strictly correlated with certain resources. For instance, Canada which is a commodity-based market, CAD is strictly linked to price of Brent and metals, a swing in those will affect the Canadian currency.
Finally, credit market is also connected to forex since also relies heavily on interest rate so, a change in bond yield will have major impact on currency prices. like increase in yield will favour bullish market for USD
International Trade – Trade levels serve as a proxy for relative demand of goods from a nation, a country which goods and services that are in high demand internationally, will experience an appreciation to its currency. This is an effect driven by all other countries converting their currencies into the one of that state to purchase its goods and services. Let’s say a product from USA is in high demand globally, all the other countries must sell their currencies to buy dollars to then see their goods shipped, thus USD will appreciate.
Trade surplus and deficit also indicate a nation competitive standing in international trade. Countries with a large trade deficit are usually importers resulting in more of their currencies being sold to buy goods worldwide, thus they will see their currencies devaluate.
Geopolitics – The political landscape of a nation places a major role in the economic outlook for that country and consequently, the perceived value of its own currency. Beside building up price action strategies, based purely on price levels, forex traders constantly look at economic calendars and news to gauge what could move currencies. A geopolitical event which is having a great impact on GBP, is the election of Boris Johnson as UK prime minister, driving the local currency to 2 years low, yesterday 29th of July 2019. Therefore, when investors observe instability from a nation political environment, there are high chances that the currency of that country will depreciate.
Why Trading ForexBeside swapping from a gold standard to free-floating, which change the whole forex trading game, technology is another crucial factor that helped this financial sector to spread globally. With the introduction of internet in the 90s forex opened to retail investors giving access to various trading platforms. The introduction of online platforms and retail investments have increased forex market volume by 5%, up to $250bn of its daily turnover. Different traders may have different reasons for selecting forex, however, mostly is because this is a fertile market plenty of daily opportunities to gauge price action and profit from it.
VolatilityHow traders profit from trading forex? Basics of trading are rather simple to understand. An investor buys an asset at a certain price hoping to get rid of it for a higher price. The more volatile is the market for that specific financial instrument, the more revenue is possible to make. Therefore, a trader is looking for long up and down moves rather than market fluctuating sideways.
Volatility is great in forex and a trader can expect to regularly see prices oscillating 50-100 pips on major currency pairs almost any day of the week. Yet again, due to this enormous constant fluctuation, potential losses or gains can be very high thus, rigours money management must be applied to avoid major damages and become a profitable trader. To conclude, volatility is the main characteristic investors are looking at and that is why it is one of the main feature traders can take advantage.
See image below:
Figure 2: FDAX Volatility, H4 (30th May 2019, 16:00, 30th July 2019, 16:00)
Accessibility & TechnologyWhile volatility is the most important element out in the market that tell us why forex is the best market to trade, accessibility comes straight after. This market is more accessible than all the others, trading forex requires an online desk position and as little as $100 to start off an account.
In comparison with the other financial markets, forex requires a rather low trading capital. Moreover, trading forex can be easily accessible from your PC, tablet or mobile since most of retail broker firms operate online. Although, accessibility cannot tell the quality of the market by itself, it definitely shows a reason why many investors try their first trading experience on forex.
Also, the rapid introduction of technology since the 90s, made trading much easier. There are every year more advanced online platforms to trade on with many possible updates and that is why trading forex is edging for many global investors.
Forex PlayersBefore the introduction of free-floating currency and more importantly cutting hedge technology, forex was a market that could have been traded only by institutional investors. Nowadays however, even retail and individual investor can take advantage of the huge volume forex offers every day.
Interbank market is the major responsible for the high volume registered daily in forex. This is the place where banks exchange currency among each other, facilitating forex transactions for customers and speculate for their trading desks.
Central banks representing their nation’s government, are crucial in forex. They oversee monetary and fiscal policies having massive influence on currency rates. A central bank is responsible for fixing the price level of its native currency on the market, in other words they take care of the regime currencies will float in the open market.
Portfolio managers and hedge funds are the second investors in forex after central and investment banks. They are hired by huge institutions such as pension to manage their assets. However while portfolio managers of pool funds will buy currency to speculate on foreign securities, hedge funds execute speculative trades as part of their strategies.
Also international corporation play a big role in forex. Those firms operating globally, buying and selling goods and services are involved in forex transactions daily. Imagine an American company producing pipes that imports Japanese components and sell the finished product to China. After the sale is closed the CYN must be converted back to USD, while the American company must exchange USD into JPY to repay for the components supply.
Moreover, company involved in international trade have an interest in forex in order to hedge the risk associated with currencies fluctuations making several foreign exchange transactions. For instance, the same American company might buy JPY at spot rate, or enter a swap agreement to obtain JPY in advance, overtaking the risk of the Japanese currency to rise in the future. Therefore, forex become crucial to run companies with many subsidiaries and suppliers all over the word.
Individual & Retail Investors
Even though this investor cluster brings to forex a very limited volume compared to financial institutions and corporations, it is rapidly growing in numbers and popularity. These base their trades on a mixture of fundamentals and technical analysis.
Bottom line, main reason why forex is the most traded market in the world is because gives everyone, from top financial institutions to retail and individual trades, opportunities to make returns on capital invested from currencies price fluctuations related to global economy.
ECN brokers earn money through a commission on trades rather than a mark-up on spreads. This is why they typically quote spreads as lows as 0 pips, also known as "raw spreads". 4xCube is an exception to the rule in that it allows you to choose between commission-based accounts and commission-free accounts. Undoubtedly, you’ll be very safe when trading with the best forex brokers in Canada. These firms have some limitations, though, such as: Limited margin requirements and leverage. In Canada, forex brokers can offer limited leverage because of IIROC rules. Leverage differs from one currency pair to another, depending on volatility. Furthermore, all brokers in the country must be registered with the Investment Industry Regulatory Organization of Canada (IIROC). Depending on the province, where they are registered, brokers in Canada may need to comply with different regulations – Quebec and Ontario, for example, impose additional requrements on forex and CFD brokers ... The new harmonized set of rules, developed by the IIROC and the three provincial bodies, have changed the way brokers in Canada do business. Businesses intending to offer forex products in Canada have to be IIROC registered. Any Canadian brokers who want to provide forex trading services to Canadian residents must be registered with the IIROC. The rules for Forex brokers in Canada and IIROC registration. If you live in Canada and are considering Forex trading, you should be aware that all Canadian Forex brokers have to be registered with the IIROC. A broker offering a service that involves trading in foreign currency pairs is classed as an investment dealer, which is an IIROC ...
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Banks, payment institutions, electronic money institutions, insurance companies and insurance brokers, investment funds and investment managers, securities and forex brokers, crowdfunding and peer ... Robin Speziale is not a registered investment advisor, broker, or dealer. Viewers are advised that the material contained herein should be used solely for informational purposes. - Forex Broker: https: ... *CP Trading Co and or any associate is not a registered investment advisor, broker, dealer, or member of any association or other research providers in any jurisdiction ... As per their website, GO Forex Group is a private investment firm legally registered in United State of America, with partners in Canada, China and Sweden. Why is GO Forex Group a scam Too often new traders come into the market without getting to know the most fundamental components of foreign exchange and how currencies work. So we decided...