Forex Brokers Exposed

By George S. White

If you're looking for a good Forex broker for the first time, you have to be extremely careful. As the Forex market isn't regulated there are plenty of Forex broker scams. The horror stories continue to appear every day. And until the Forex market starts to be a regulated market like stocks or futures markets, you need to do a solid research on any broker, before you send them any money. There are several things that you should look at in order to avoid opening an account with the wrong broker.

Some Forex brokers trade against their clients. So, when you're buying for example EUR/USD the broker is taking the other side of the trade (they are selling EUR/USD). As a result, these kinds of brokers tend to manipulate prices in order to scare you out of your trade. In some worse case scenarios I've seen traders complaining that some brokers didn't fill their orders when they were in a winning trade. When they were losing money, the broker executed their trades in a matter of seconds.

Some brokers are from 3rd world countries. Usually this kind of broker isn't regulated anywhere. So, if you send them money, you can forget about the safety of funds. More than once I've seen people trying to withdraw money from their account, while the broker doesn't even answer their emails or calls. Some of these brokers have open offices in Switzerland so that you can trust them. Be extremely careful with where the broker is based.

Some brokers make their trading platforms freeze during key economic events. This makes impossible to a trader to exit a position. If a broker can't offer you a stable platform, you shouldn't use it. Forex broker horror stories are all over the place. In order to protect yourself you should choose a solid and reliable broker based in USA or in Europe. This broker must be regulated and offer you easy withdraw conditions.

With all of this you need to be extremely careful when you're choosing a Forex broker. You must read everything you can about that broker. Make sure it's a regulated broker based in US or Europe. If you have any questions about them, make sure to contact them so that you know exactly that your money will be safe with them. Besides this, you may also consider to search for broker reviews on your favorite search engine. Reading reviews allows you to know Forex customers experiences with a particular broker. Are they glad with this broker service, or are they mad and feel cheated?

Try to understand the situation that led to a specific review. Sometimes you can easily notice if it was someone that was mad with his broker and has no reason, or someone that is simply telling good things about a broker because he works there. Make sure the broker has enough money to avoid bankruptcy. If you're choosing a regulated broker this task is almost complete because that's one of the standards a broker must accomplish in order to be regulated. If not, you'll be in trouble to know exactly the financial stability of the broker. The Forex market is a difficult market even if you're with the right broker. If you start trading with a bad broker, you won't have many chances to make money on Forex.

I hope you understand all the Forex brokers' risks and scams, and make a complete research about them before you send them your money. You'll be glad you've done it.

George S. White is the editor at TopForexEducation. By visiting the website TopForexEducation you can see some of the best Forex trading systems and Forex trading courses on the market.

The Lazy Traders guide to the types of forex trading

This might, or might not, come as a surprise. There are actually two types of trading. Well, to be brutally honest, the difference is in the way that you analyze the market. Both ways can be deadly efficient in the plan-making part of your trade, and although many traders rely more on the one or the other, it is always a good idea to keep an eye on the other method.

Now, what are these to types, I hear you asking. They are

• Technical Analysis
• Fundamental Analysis
  

Fundamental analysis is the analysis of the economy. This is normally the economy of the land in which the main currency in a currency pair. Usually the analysis uses a few factors, or reports, such as the CPIX and Reserve Bank Meetings and announcements. Certain things happen in an economy to suggest that an economy is doing well or not. Whenever something bad happens, like a war (extreme example), you normally see it reflected in the currency's value, which would have taken a fall. If something good happens, and the economy gets a boost, the currency's value also moves up.

This is what makes the basis for fundamental trading; traders who trade on fundamentals normally trade only on certain days when the reports and news will have an influence on the markets.

Technical Analysis is where the trader uses charting software and certain price indicators and the like to analyze the markets. Traders who use this method study the movement of the prices. There is one cardinal rule when it comes to trading with technical analysis, and that is stay with the trend, cause in the end the "trend is your friend!” Many have made millions with that rule, and many have lost plenty for ignoring that rule!

That is the two main and basic styles of trading the forex market. I will get into some detail more later on with both these styles. Keep in mind that the one can't survive without the other. You might just see yourself in a very bad situation if you do!

Basic Terminology Every Forex Trader Should Now

The first time I heard that the market is "bullish", I thought that we were in Spain, with the running of the bulls. I also thought that straddling the market, meant something totally inappropriate to the business world.

Forex Terminology is something that can truly through any novice right out off the bus. That is why I thought I should probably begin with terminology first. I will try and explain the most basic terms, just to give you a boost in the right direction. Trust me when I say that Forex is made easy by knowing these basic terms

Bullish / Bull Market.
This means that there are increases in the market, i.e. the market is moving upwards. If the dollar increases towards the yen, then this would be a bull market.

Bearish / Bear Market.
This means that there are decreases in the market, i.e. the market is moving downwards. If the dollar decreases towards the yen, then this would be a bear market.

Spread.
This is what normally is charged by your broker to enter you into a market. The standerd nowadays seem to be a 3-5 pip spread. This is also a fixed cost so you will not be charged anything extra to enter a certain market. Remember that, for you to make a profit, or break even, you need to make at least the spread asked by your broker.

Pip.
A pip is the amount at which a price of a currency can increase. A 1.2500 to 1.2501 move, is one pip! Make sure that you know where to look to determine the amount of pips you made or lost in a trade as some currencies pip is the 4th decimal point (0.0001) and some is the 2nd decimal point (0.01).

Lots.
When you trade forex you trade in lots. Lots are standard at $100 000.00, though there are mini lots which are $10 000.00.

Leverage.
Leverage is what enables you, as a small investor, to trade such huge volumes on the forex market. Say for instance that your broker gives you leverage of 100:1, what this means is that for every $1000 you have you can trade $100,000, which is 1 standard lot. So if you had $5,000 then you could trade 5 lots. This amount will vary from broker to broker and is normally shown as a ratio.

Margin-call.
This is what happens when you are in a non-profitable trade and you do not have enough security left in your margin account at your broker. When you reach this point, your broker will close some or all open positions, to you from going into a negative account balance.

There are more terms that I will discuss further along the line, and I will go into much more depth into some, but this should get you started on the right road.