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Posts Tagged ‘FXOpen’

Most currency exchange brokers offering accounts to retail traders operate in one of two ways. It is unlikely that you’re going to be signing up with a broker who has their own dealing desk. More likely, you’ll be having a look at either an ECN broker or a market maker.  

1. ECN currency exchange brokers

These corporations use the Electronic Communication Network, a worldwide online marketplace that caters for many differing types of trader from retail to the massive banks and market makers. The spread on the ECN is small, infrequently just about non existent, so brokers using this network will typically either add two pips to the real spread or charge commission or fees per deal. You can often get better prices from an ECN broker but take a close look at their fee structure and consider what it would mean to you on a normal deal.

ECN brokers are usually better for scalpers and can even welcome them because they are dealing without delay with a massive market. Slippage isn’t such a lot of a problem either for scalping or at times of currency exchange reports reports. They are also sometimes well regulated.

On the downside, the variable spread can imply more uncertainty when setting stop losses and limit orders. ECN brokers also tend to offer fewer charts and can have a less user friendly dealing platform because they don’t seem to be especially trying to attract newbies. They generally tend to say that you know what you do and have a paid subscription to do your technical research somewhere else.

If you’re interested in ECN brokers check out FXOpen.

2. Forex market makers

Market makers sometimes offer you their own costs, based mostly on the price that they are expecting to get on the ECN. When you open a deal they have to match it in the ECN to cover their risk. Clearly here there is room for the price to modify in the instant between you clicking the button and the deal going on to the ECN. This is slippage. It can imply that you don’t get the price that you predict, which can be a difficulty, especially for scalpers who are generally searching for miniscule profits from each trade. For that reason scalpers and market makers are not a good mix and may be unwelcome.

On the positive side, market makers can be a good choice for an amateur. They will often provide good technical research, reports alerts, a user friendly platform and a demo account. They will almost always offer a mini foreign exchange trading account so that you can start trading with a couple of hundred dollars or less. This is a important factor for many new traders selecting forex brokers.

To participate in online forex trading, one of the first agenda on your to do list is to register an account with an online foreign exchange broker. The part the broker plays is really just to be the middleman that executes the actual transactions for you. Since there are so many online forex brokers in the market, you’ll have to be prepared to set aside some time on doing research to discover the best forex broker for you.

1 of the simpliest ways to find out how great a particular online foreign exchange broker is is to speak to someone who is already using their services. Talk to anyone you know that are involved in online currency trading and discover which broker they use. Then ask them what they are satisfied with their broker and if they have any frustrations in working with them.

A good idea to test an online broker is to correspond with their help desk and see how much time it takes them to respond to your questions and how are their attitudes in helping you. A support desk that is slow to respond to pre-sales type questions is unlikely to improve after you’ve registered with them.

A critical factor in deliberating which online foreign exchange broker to register with is how quickly the broker can execute a trade and what kind of slippage you can expect to have with them.

When checking out the best forex broker to sign up with, you will definitely start comparing the cost of each broker, which is mostly decided by the spread. Is the spread fixed or does it change with market conditions? If you are thinking of registering for a forex mini or micro account, you need to find out if they have similar spreads as a standard account or is it greater. Just remember that what might look like the cheapest online forexbroker is not necessarily the best, as the broker that has slightly higher spreads might have better services that justify for the additional costs.

If you want to make money regularly from online currency trading, you have to be comfortable with the online forex trading platform. The majority of brokers such as FXOpen have a free forex demo account that work just like a live account and use exactly the same platform. Before trading live, sign up for a demo account and test the platform totally, taking note of the speed and reliability especially during volatile trading periods.

Other things that you might want to look into are if it supports Islamic traders, the ease of deposit and withdrawal of funds, etc.