How to choose Forex brokers in the most effective and efficient way is one of the many questions that plague Forex traders around the world. Naturally, the answer to that issue is complex, but it also depends on the trader’s objectives when looking through the many Forex brokers. To give one example, is the trader seeking for a user-friendly broker or is the trader looking for built-in Forex charts in the platform?
Yes, I realize it seemed circular, but it wasn’t, and here’s why. When it comes to Forex brokers, different traders have different needs. In order to feel more assured as they begin their forex journey, new traders may look for triomarkets with greater customer service. More so than the client service, the Forex platform and the charts it includes will be of greater interest to seasoned traders. Let’s expand on that a little.
There are many different approaches to market analysis and forecasting future movements in the Forex market. Technical analysis is undoubtedly one of the most popular types of analysis. This method of market analysis operates under the premise that “The trend is your friend” and examines the most recent trends utilizing technical indicators and Forex charts.
Technical analysts will forecast that a trend on the Forex charts will continue if it is trending in that way. Forex charts are a necessary skill if you want to make a life trading Forex, whether or not you believe in technical analysis.
This is when things become tricky. Most likely, if you trade forex online, you use a trading platform. Then you must ensure that you are up to date on current affairs. Add to that the requirement for numerous charts, and you have way too many windows open at once, diverting your attention from the trading platform.
How does a Forex trader balance all of this, then? The answer is that traders must locate Forex brokers who provide a trading platform with built-in charts. While some also offer news and events, Forex charts are a need and should be among a trader’s top priorities when choosing a forex broker. You must get to know your broker well since, more often than not, he or she may be trading against you without your knowledge. The forex market is an unregulated over-the-counter market. This indicates that there isn’t a central organization that can serve as a clearing house in the futures markets.
This implies that forex brokers are frequently free to quote their own currency rates. When offering rates to their clients, the majority of retail forex brokers add 1-2 pip to the spread, which they obtain from the interbank market. Forex brokers may abruptly widen the spreads, particularly during periods of severe volatility. Your trading expense increases as the spread increases.
Every broker assures prospective clients that they do not charge a commission. When compared to stock trading, where brokers typically charge commission per trader, this is presented as a benefit of FX trading. When they quote exchange rates, they omit to mention that their commissions are concealed in the form of bid/ask spreads. You see, the 2-5 bid/ask spread is the broker’s profit while being your trading expense. You’ll pay the broker this spread each time you buy or sell a currency pair. The broker will earn more money the more trades you make.
Brokers urge their customers to trade more frequently. Forex brokers utilize a variety of games to encourage you to trade more. You will receive an invitation from a broker to participate in a trading competition with the promise of a prize worth between $200 and $2500 if you win. 99 percent of the time, new traders lose money. The broker makes more money the more you lose. This also has something to do with how the retail foreign exchange market operates.
Final Thought
The heavily regulated interbank market is distinct from the retail forex market. However, you are unable to enter the interbank market as a retail trader. Your forex broker is the only way for you to gain access to that market directly. The majority of retail traders have modestly sized accounts. Because of the modest size of the deal, the broker is compelled to take the opposing position when you open a trade in order to offer liquidity. The forex broker can now trade against you thanks to this. Since most rookie traders lack experience, they frequently lose money. Your triomarkets gains from your loss!
Finding Forex brokers that offer a trading platform with built-in Forex charts is not difficult in today’s forex market. Once you have located the right broker, do some research, read some reviews of Forex brokers, and, provided there are no warning signs, start trading.
