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FINAL LESSON

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FINAL LESSON

 

6 Most Important Things to Consider When Choosing a Broker

1. Security

There are regulatory agencies all over the world that separate the trustworthy from the fraudulent.

Below is a list of countries with their corresponding regulatory bodies:

  • United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
  • United Kingdom: Financial Services Authority (FSA)
  • Australia: Australian Securities and Investment Commission (ASIC)
  • Switzerland: Swiss Federal Banking Commission (SFBC)
  • Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
  • France: Autorité des Marchés Financiers (AMF)

Before even THINKING of putting your money in a broker, make sure that the broker is a member of the regulatory bodies mentioned above.

2. Transaction Cost

No matter what kind of trader you are, like it or not, you will always be subject to transaction costs.

Every single time you enter a trade, you will have to pay for either the spread or a commission so it is only natural to look for the most affordable and cheapest rates.

3. Deposit and Withdrawal

Good brokers will allow you to deposit funds and withdraw your earnings hassle-free. Our broker only holds your money to make trading easier so there is no reason for you to have a hard time getting the profits you have earned. Your broker should make sure that the withdrawal process is speedy and smooth.

4. Trading Platform

In online forex trading, most trading activity happens through the brokers’ trading platform. This means that the trading platform of your broker must be user-friendly and stable. When looking for a broker, always check what its trading platform has to offer.

Does it offer free news feed? How about easy-to-use technical and charting tools? Does it present you with all the information you will need to trade properly?

5. Execution

It is mandatory that your broker fill you in the best possible price for your orders. Under normal market conditions (e.g. normal liquidity, no important news releases or surprise events), there really is no reason for your broker to not fill you at, or very close to, the market price you see when you click the “buy” or “sell” button.

A few pips difference in price can make that much harder on you to win that trade.

6. Customer Service

Brokers aren’t perfect, and therefore you must pick a broker that you could easily contact when problems arise.

The competence of brokers when dealing with account or technical support issues is just as important as their performance on executing trades. Brokers may be kind and helpful during the account opening process, but have terrible “after sales” support.

 

GOLDEN RULES

 

  1. USE A MONEY MANAGEMENT AT ALL TIMES.
  2. ESTABLISH YOUR TRADING PLAN BEFORE THE MARKETS OPEN.
  3. DETAIL YOUR PLAN FOR EACH TRADE.
  4. DEVELOP A TRADING PLAN FOR EACH POTENTIAL SITUATION YOU MAY FACE.
  5. ESTABLISH ENTRY AND EXIT POINTS AND UNDERSTAND RISK REWARD RATIOS.
  6. ACCEPT SMALL LOSSES AS PART OF THE GAME IF YOU WANT TO WIN.
  7. DON`T BLAME THE MARKET FOR YOUR LOSSES; YOU ARE THE REASON FOR YOUR LOSSES.
  8. REMEMBER THAT GREED KILLS.
  9. NEVER ADD TO A LOSING POSITION.
  10. SUTAIN YOUR PATIENCE.BIG MOVEMENTS TAKE TIME TO DEVELOP.
  11. REMIND YOURSELF THERE IS NOTHING NEW IN THE MARKET.
  12. DON`T PRE-DETERMINE YOUR PROFITS.
  13. AVOID TECHNIQUES YOU DON`T UNDERSTAND.
  14. BULLS AND BEARS MAKE MONEY; PIGS GET SLAUGHTERED.

 

FOREX PSYCHOLOGY

 

  • All traders lose money but smart traders have small losses and big profits.
  • Trading requires patience, discipline, persistence and determination.
  • Don’t get distracted by other peoples’ business prowess.
  • Stay emotionally detached and concentrate on technical assets.  If trades are technically correct then profits will follow.
  • Do your analysis and wait for the right market conditions before trading.
  • Expect the unexpected because, investing involves dealing with probabilities not certainties.
  • The market is always RIGHT.  The biggest enemy is YOU AND YOUR EGO.
  • Greed and fear are most likely to lose you money in forex.  Control your greed and fear with a trading plan, limit and stop loss orders.
  • Don’t complicate it, just keep it simple stupid (KISS).

 

 

SUMMARY

 

FOREX trading will depend more on the smart decision you will make.

 

A smart trader minimizes losses and maximizes profits.

 

Reading is a must in forex trading.  Read, interpret and understand the fundamental and technical analysis.

 

You have been given the best tips to set you on to the path to making wealth.  The ball is in your court and you are the master gardener of your financial freedom!  Go for it!

 

 

REFERENCES

 

  • WEBSITES

 

Learn how to trade forex.

This is an easy-to-understand guide for teaching beginners how to trade in the foreign exchange market. Everything you need to get started is right here.

Stay on top of forex news.

This helps you discover and share interesting and useful forex news which are handpicked from the web by forex traders, from the biggest news sites to little blogs.

Research and review forex products.

This helps you from getting hustled by all the forex stuff that’s being sold online these days.

Ask and answer forex questions

It is an online community where you can ask and answer on any forex topic. If you have a question about forex trading, this is the first place to go to get an answer.

Share the way you trade

Its an online trade journaling community for forex traders who wish to become more disciplined and consistently profitable.

Analyze and share your Meta Trader 4 trades

Understand your trading results better with useful statistics and insightful graphs. All of which are automatically calculated for you. No need to setup and configure your own FTP server. No technical knowledge is needed.

 

 

 

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