“Forex Broker Review” Due to the exciting and high income environment of the foreign exchange market, legions of professional, private, experienced and novice traders are participating in forex trading today. The forex market is the biggest market in the world, and the potential for income is limitless. People who know their way around forex trading and are using the right tools to enhance their trading system are likely to be part of the lucky segment of traders who take a big chunk of the $3 million US dollars that are made on the forex market daily.
With this huge amount at stake, other enterprising individuals have entered into the fray. Experienced in forex trading, these people offer their services to speculators to assist them in making the most optimal decisions in the foreign exchange market. These pros are known as forex brokers, and they can be found in great numbers on the Internet where a majority of trading takes place today.
A forex broker can either be a single individual or a company that does the trading for a speculator on the forex market. They hold the trader’s money for them and either buy or sell depending on the trader’s decisions. While forex brokers do not charge commissions for placing buy and sell orders, they get paid based on the spread of a
trade. A spread is determined by the difference in amount of a trader’s buying price of a certain currency, and the seller’s asking price for the same. Spreads are defined in terms of pips, or the smallest movements of the currency traded on the market, such as 10 pips, which is equivalent to 0.1%. The higher the spread, the bigger the broker’s fee for a trade is.
While there are many legitimate forex brokers in the market, a fair number of them are likely to be running scams. It’s as easy as putting up an ad on the Internet and many prospective traders buy it lock, stock and barrel, in the hopes of making it big in the forex market. There is as much chance of finding unscrupulous individuals posing as forex brokers as there are legitimate brokers available. To prevent being scammed, it is best to do thorough research on various forex brokers before deciding which one to choose.
The forex being a global market, there is no one regulatory commission that monitors forex broker activities around the world. However, there are many regulatory agencies per country where forex brokers have to register to start their business. In the United States, the CFTC, or Commodities Futures Trading Commission regulates forex brokers. Without registration, a broker cannot accept deposits from traders and cannot make their trades for them.
Traders will need to verify that the broker they choose is registered with the CFTC and has an identification number with which they can verify the broker’s status with the regulatory agency before making their decision to hire.
Each trader may have their own particular preference of trades and trading styles. Before choosing and hiring a broker, it would be wise to have a selection criteria based on the type of accounts a trader usually holds and the trade platforms a trader uses. Judging a broker
will also mean researching on their reputations and the reputations of the agency they come from. Traders need to be extremely careful in their choice to prevent being a victim of impostors who may be manipulative and perform abusive trade practices.
Making a huge amount of money is possible in the foreign exchange market, as long as traders are able to utilize tried-and-tested systems, effective automated tools, as well as the assistance of a legitimate broker to help them get the most pips from the market each day.
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