In other words: Considering overall reputation, margins offered, fees charged, service features and quality, etc., which on-line Forex Brokers do you regard as the best? … Also: Any tips on how to watch out for on-line Forex frauds and scamming ploys? Thanks!

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If you are trading the forex market on a retail or individual level, there is a very slim chance that you will be able to participate in the interbank market.

Typically, the smallest trade that can be placed on the interbank market is USD $1,000,0000, so really only high-net worth individuals could possibly have the trading capital to participate in this segment of forex trading.

The smaller part of forex trading is called the retail or individual forex market, and anyone can trade this market with as small as $500 due to the existence of retail forex brokers.

It is, but, vital to know the two different types of forex brokers that you will encounter when you are navigating the slightly murky waters of forex so that you can grow your money and not lose it.

The two different types of forex brokers are called ‘market makers’ and ‘ECN brokers’ (ECN stands for electronic communications network). The most typical question that many traders question initially is ‘Which one is better?’ and it would probably be best to say that ECN brokers are better for the simple reason that market makers have a vested interest in seeing you lose money trading (as you will see below).

First, let’s break down how each of these two different types of brokers are set up.

Let’s start by making sure you know the reason that these brokers exist in the first place: they exist to provide forex market access to people who have a willingness to trade but do not have access to vast reserves of capital necessary to participate in the interbank market.

Simply place, the only role an ECN broker is to match buyers and sellers by putting orders through their communications network. ECN brokers play no role in really providing liquidity, all they do is provide a medium where buyers and sellers can find each other, so they also play no role in manipulating market prices in any way.

The goal of the forex market maker is to provide liquidity to potential traders, and the way that they do this is to take the opposite position on every trade that you make. For example, if you want to buy 1 lot of EUR/USD, some other party will need to place a sell of this same size in order for the trade to go through.

This is what the market maker does, and they will be on the opposite side of every trade that you make.

Also realize that forex trading in this manner is what we call a ‘zero-sum’ transaction, which simply means that for every time that you make money, some other trader has to lose money, and vice versa.

So what does this mean for you if you choose a market maker as your foex broker? It means that every time you have a profitable trade, you take money away from your broker, and your broker will make money every time you have a losing trade.

Now your market maker will probably never admit it to you, but because they stand to profit every time you lose on a trade, it is really in their best interest to see you lose.

It is, but, still very possible to make money for yourself if your broker is a market maker, though if you become highly profitable then they may come up with some BS excuses for why they cannot give you your money. So if this ever happens, and your broker starts giving you fake excuses like ‘We cannot guarantee this fill on your trade because you entered the market at a volatile time, blah blah,’ it is time to find a new broker!

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If you want to trade forex you need a forex broker and there are plenty around, here we will give some tips on picking the best for forex brokers and how to maximize your potential with them.

Many traders see brokers as the enemy who lose them money but the fact is there neither your friend nor your enemy – their simply there to transact your orders in an efficient, cost effective and timely manner and that’s it.

The most vital points to consider when dealing with a broker are the following:

1. Competitive Spreads

Pay no more than 5 pips on the majors and if you shop around you can get 2 – 3. This is your cost of doing business and needs to be kept low.

2. A Reliable Trading Platform

If you are trading online this is imperative and most trading platforms today are brilliant – but make sure you test drive it, for usability via a demo account to prove it to yourself.

3. Leverage

Any broker today will give you more leverage than you will ever need. 100:1 is fine – but many brokers will go up to 400:1.

4. Security OF Funds

Look for well established brokers who use segregated accounts have been in business for years rather than months. The longer they have been in business and and the larger they are the better.

What You do NOT Want From a Broker

A lot of brokers sell higher fees based upon the service they give you in terms of trading recommendations etc.

Keep this point in mind – if brokers were excellent at trading they wouldn’t be brokers, ignore them and do your own trading signals.

Useful EXTRA Services

Some brokers give extra services away that are useful such as discounts on trading tools, books and newsletters which a lot of traders like – but there is one service we saw recently which is brilliant for novice traders and it’s called:

A PROTECTED ACCOUNT

If you are new to forex trading, then you will probably try a demo account to get the feel of trading but useful as they are for learning the mechanics, they don’t replicate the feeling of dealing with real money.

Many brokers to help get novices feet wet with limited risk offer Protected Accounts, to act as a bridge between a demo account and a full trading account.

They allow traders to trade with small amounts of money and do as many trades as they like in a set period (normally a couple of weeks) and the trader can still trade even if he is debit!

At the end of the period the broker covers the losses if any and the trader takes the profits.

This means a trade as much as he wants – even when he is debit on a set leverage and has a set risk in advance.

These accounts give the feel of forex trading but have set risk and will show a forex trader his potential, before moving to a full trading account.

Finally ..

Getting the right forex broker is simple and you only have to keep a few points in mind and then you’re all set, to enter the exciting and lucrative world of currency trading.

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Commercial loan brokers should provide a real service to their clients. An emphasis should be on saving their clients time, helping them avoid aggravation, costly mistakes and of course, should be able to line up the right bank to the borrowers unique situation. Bottom line, the broker’s prior experience should help guide the borrower, who may have small or no experiencing sourcing, negotiating, processing, and closing a commercial mortgage.

One of the more valuable components of what a excellent commercial loan broker does, is introduce the borrower to lenders they would never, (realistically) be able to find on their own. There is a full market of commercial lenders out there that do not have branches and instead depend on their broker networks to find deals and introduce creative/unique programs that traditional banks do not offer (such as commercial stated income loans, commercial 30 year fixed or second lien position loans, etc).

In addition, brokers should be able to give their clients solid, meaningful recommendations on which specific lenders fit the borrower’s situation. The real differences from one lender to the next can be very hard to uncover. There are obvious factors, such as which banks are quoting the lowest rates, offering the longest amortization schedules, longest fixed periods, etc. But the issues that could potential kill or change loan terms in the middle of processing a loan are only learned through experience. This is where a commercial loan broker really earns his fee and this intricate lender knowledge is only learned by being involved on a day to day basis. A excellent commercial loan broker closes 2 -4 loans per month, while a borrower will only close 2-4 in their life time.

Brokers are basically on the same side of the table as their clients. Although there is no official representation agreement like a listing agreement, a broker should be there with their borrower’s interests in mind. In addition, unlike bank loan officers, brokers only get paid when the loan closes. We get paid to close loans. Many bank officers in contrast are on salaries and have other quotas besides funding loans, such as weekly meeting goals, number of telephone calls made, turned in applications, etc. So the bank officer may know that your loan stands small to no chance of closing yet will “lead you on” simply to protect their job (this happens all the time!).

A excellent broker will make a competitive environment with funding sources to produce the best rates and lowest fees possible for their clients. The brokers reputation with banks will also add to this in that if the broker is known, the funding source will take the loan request more seriously, place more time and energy into the file. Lenders also will not “re-trade” as quickly with excellent brokers in dread that the broker will not bring the bank additional loans.

Brokers worth their “salt” should be able to identify the right options for the borrower based on small intricacies of the file. Often, it is a small detail that will slow or kill a deal. A solid broker should be able to identify these details from the beginning that would otherwise cost the borrower thousands, and waste months as the incorrect lender tries to make the file fit their guidelines

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There are several myths about forex brokers and here we are going to look at 3 common ones which lead to clients losing. If you don’t know and avoid these myths you will lose…

1. Brokers Hunt Stops

This is one of the largest myths of all and is normally place about buy forex day traders and scalpers. If you are using this method of trading you may be tempted to blame your broker and reckon you’re unlucky, but you’re not day trading and scalping simply doesn’t work!

Rather than blame your broker look at your methodology of trading. I have worked in a brokerage and can tell you they like day traders why? Because they get lots of trades and commission (or make on the spread) and if they are market makers ( and a huge amount are) they know that the account equity is going in their pocket 100%.

A forex broker knows 95% of traders lose. Most are market makers i.e. trading against the client so they know 95% of the account equity goes into their pockets – they don’t need to hunt stops.

2. The More Leverage the Better

Many forex brokerages today offer 400:1 in leverage and many traders see that as an advantage.

The fact is most retail trader’s leverage up there small accounts so much there bound to get blown out the water. More forex accounts are wiped out for over leveraging than ANY other reason.

If you choosing a broker most offer 100:1 and this is ample most traders should be leveraging no more than 10 – 20:1 anyway. Don’t reckon your broker is being generous by giving you more leverage; they are giving you a potential noose to hang yourself.

If you want to make money in forex don’t be tempted to use too much leverage or you will lose.

3. Broker Advice

They often offer research and breaking news etc but this is total waste of time and you should NEVER be looking to get any advice from a broker – that’s not their role. Their role is providing you with the mechanism to trade and nothing more.

If you seek advice from a broker or trade news tales you need to forget about forex trading as you will lose. The best advice is your own from your own forex trading strategy.

Forex Brokers Provide You With the Key to Build Wealth

Today trading in forex is simpler and online forex brokerages have bought trading to the masses and allow you to trade with smaller amounts and with higher leverage than ever before and that’s excellent.

Keep in mind most brokers are market makers and to a degree that is why the service you get is so excellent, they are the bookmaker and you are trading in the market via them and if they are a market maker they hold the opposite position.

If you lose they win that’s not a terrible thing, it means you get a fantastic service and it’s up to you to prove them incorrect. If there in the middle or not 95% of traders still lose only 5% win, so avoid the forex broker myths above, get a excellent forex trading education and win.

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