Guide: How to Choose a Forex Broker

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The problem is that most brokers make sure their clients pay for holding most positions overnight, and there is nothing to stop them doing this beyond the true market cost. There has been long-running speculation that such a regulatory stance would eventually come into force, and replicate what many other regulators have done around the world.

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Brokerage fees are fees that the broker charges for the services it offers, which are services focused on facilitating transactions between buyers and sellers.

The amount of these fees depends on the broker type, and the type of service to which the trader signs up. For the purposes of retail traders, the situation is best summarized by saying the Dealing Desk Brokers charge spreads only, while ECN Brokers charge spreads as well as commissions.

The key difference between fees and commissions that all traders need to understand, is that fees represent a flat charge, while commissions vary depending on the delivered financial product and the size of the transaction. Full service brokers offer all sorts of additional perks and premium features, some of which are indeed extremely useful. Such services do cost extra though. In this respect, what you should be looking for is a broker who includes as many premium services as possible, as cheaply as possible.

In the premium service category, we have features like advice and research covering a wide range of traded assets, retirement advice, tax planning etc. You need to carefully weigh whether you need such services or not. If you're only looking to execute trades, there's no point in getting embroiled in any premium-service intricacies. Discount is probably the way to go then. Another factor to consider is daily rollover. The daily rollover is interest credited or debited to the entity holding a Forex position overnight, depending on the relative interest rates of the currencies involved in the trade.

In such cases the broker will consider which national currency the trader bought relative to the other national currency of the pair. If the interest-rate difference favors the bought currency, the trader will have rollover interest credited: If it's the other way around, the interest will be debited. The problem is that most brokers make sure their clients pay for holding most positions overnight, and there is nothing to stop them doing this beyond the true market cost.

Most brokers roll over open positions automatically. It is important to know that the rollover interest whether it's debited or credited is calculated on the full amount involved in the trade and not on the margin alone. Another important thing regarding the rollover interest is that it represents a separate revenue stream from the capital gains and as such, it will be taxed separately too, as interest income.

Through a margin account, the investor essentially borrows from the broker, with the intention of controlling larger positions than he'd be able to control based solely on his own invested capital. There are special margin accounts that traders can use for this purpose. Margin accounts come with their own risks, and special operating procedures meant to reduce risk for the trader as well as for the broker. The difference between margin and leverage is simple.

The leverage is the factor by which the deposit is multiplied to reach the maximum trade value: The margin is simply the amount of deposit required as a percentage of the maximum trade value. It is just the flip side of the earlier calculation.

The initial deposit is the first deposit a trader makes with a broker. This deposit may be subject to special rewards, such as bonuses.

Bonuses and promotions are marketing tools used by the broker to "sweeten" its offer, and thus to attract more business. You might want to consider whether a really top-quality broker would feel the need to offer such incentives. Customer service is very important for new traders and experienced investors alike.

Whenever one runs into any sort of trouble with his or her broker, it is the duty of the customer service agent to iron everything out. As such, the expertise, skills and availability of the customer service staff should be a factor within the broker selection balance. Funds deposited into trader accounts through third party checks typically take some time to clear. Once they do, they become "available". Availability hinges on the bank from where the check originates, and the availability schedule of the broker.

The trading platform is the gate between the retail trader and the markets. It is also the tool through which the trader performs his trading.

A proper, simple, fast and user-friendly trading platform is critical in trading successfully. Being able to make deposits and to withdraw money from your broker quickly and easily is highly important. This all depends on the type of withdrawal and deposit options your broker supports. The selection of these payment solutions needs to be as large and as diverse as possible. It is also a good idea to check the withdrawal time, as many traders complain that it can take up to a week to withdraw, when they wanted their funds available quicker.

Obviously, the smaller this amount is, the better it is for the trader. In the context of Forex trading, an instrument is defined as a tradable asset, and any asset underlying a derivative. Your choice of broker should be influenced by the type of trader you are and by how much money you are going to deposit.

No single broker is good for all traders, so determining your trading style before you start trading is always a wise decision. As it has been iterated several times in the guide above, picking the right broker exerts massive influence on how successful your trading venture will be.

No detail should be left to chance. You need a well-regulated broker, where your money is safe, one that features a user-friendly trading platform , with tight spreads and fees, and which suits your trading style. Brokerage selection is a time-consuming task, but a necessary time investment into your eventual success as a Forex trader. How to Choose a Forex Broker With hundreds of Forex brokers to choose from, selecting the right one can be both challenging and time consuming.

Use the below links to navigate through the guide: Things to Consider When Choosing a Broker. Regulatory Compliance The activity of a trustworthy broker should always be governed by an official regulator designed to protect and promote the integrity of brokerage operations. Safety of Funds Regulated brokers must comply with a set of rules that are meant to safeguard investor assets. Broker Types The type of broker used can have an impact on one's overall trading performance and results. ECN Brokers Dealing Desk brokers work similarly to the dealing desks provided by various financial institutions and banks.

It closes below the support level and closes down there. The problem is how do we determine when support is going to hold or, whether a support or resistance for that matter, is going to break and the market continues to slice right through.

This is one way to do it. Look at your price action bars at those support resistance levels. This is one example. Please click on the share button below and pay it forward. Please click the thumbs up icon. And leave a comment because that really encourages me to keep creating more free tutorials for you.

I love the interaction and finally have a special offer for my youtube subscribers. I still trade it myself to this day because it has a really high win-loss ratio. You can get it absolutely free by clicking on the image in the top right corner of this video or in the description below the video.

Just send me an email at Barry TopDogTrading. What did you think of this tutorial on Forex Training? Just fill out the yellow form at the top of the sidebar o n the right. Trading Stock Market Cycles Part 1 video: This video and article will give you key insights on timing the market cycles right using various strategies, founded on solid economic fundamentals. This would elevate your trading performance to new heights. First of all, I found out that there are not many people doing searches for this.

And then I thought, no, just the opposite. And this is so important. Now, that appears in many different ways, but, first of all, again, just to emphasize the importance of this and how absolutely ridiculously critical this is. So think of it this way, a chart has two dimensions.

Alright, so think of that. Now, if you are not using some sort of really great timing tool, what are you doing? Yes, trading is all about establishing probability scenarios that favor us, right? How can you establish a statistical probability scenario? That alone means that you will be a failed trader. One of my friends who is a floor trader actually was one of my mentors for quite a while in Chicago and he said, Barry, you know what?

Of the two, time is actually more important than price and that very few people even use this in their trading in any way, shape or form. And the uptown cycles, that means timing your entries with the highs and the lows, the swing high swing lows.

Just send me an email at barry topdogtrading. Today, what I want to focus on is this one, the seasonal or calendar cycles. The crops grow over the summer and then you reap your harvest in the fall. But that is a cycle, the agricultural cycle. And then another one is the retail sector.

There are some businesses, in fact, that make all their money during the holidays in December or they pushed it even into November now to keep extending it. But the bottom line is these couple of months is the time when some businesses actually make all their profits and others to make the majority of their profits. So people who are watching the retail stocks and sectors, things like that, they are watching this time of year. A third one is travel.

So again, timing is very important for that. So you get the idea and there are many other cycles that are associated with the calendar year.

The weather would drop and the oranges would die. And that really had a major dramatic effect on the orange juice commodity market. So prices would go up because why? The price went up. No, because some farmers lost all their crops and made no money. They invested all that money into farming, into the machinery, into raising the crops of whatever it was, wheat, corn.

And now they got nothing back. So they are deeply in debt. I would rather have the guaranteed price. The retail sector is actually a better one because weather events are very difficult, in fact, impossible to predict. How are people doing, are they making lots of money and that sort of thing.

So people can start looking at these economic indicators ahead of time and that again is the deal. The last thing I want to say is that using these types of cycles affect any type of cycles, is just one energy in the market. Money going in, money going out, the buying, the selling, the supply, the demand. You still need other things. But this is one extra thing that you can add to your trading in professionals.

Kind of a weird thing to say, but what I mean by that is that if you did get value from it, please pay it forward, just pay it forward. And the best way to do that is to click the share button. Click the subscribe button. Click the thumbs up icon, leave comments below. I love your comments. I call it the rubber band trade.

Get it absolutely free by clicking on the image in the top right corner of the video or in the description below the video. Once you do one of those things, I will personally email the video to you with the rubber band trade strategy. This strategy will surely give an edge in trading against many others. I use this all the time and I absolutely love it.

First of all, you want to see that you have a change of direction. So we have had a move up. And I will tell you that I agree — entries, I have no problem with entries.

But exits are much more challenging than entries. But what we do want is a good risk-reward ratio and we want a reasonable, logical and high probability time to exit. First of all, let me show you how to draw this. You start there and then to there and then a lower high.

So looking for that shift in a trend. This is just the central line, you want to consider it that. So the middle one I make black and then the two outside of that I make thicker and darker blue.

And then the ones outside of that, a little lighter blue and the wind outside of that a lot lighter blue. I would expect that. But anyway, here you could see the handle. So the handle is that part where the fork, you would actually pick up the fork so to say. But what is important here are the percentages. So, tine one is percent, tine to zero percent.

Now, I have found that different charting platforms will prescribe different percentages there, but this is for Ninja trader seven. So these are going to be equidistant from the handle from the middle line. And then from there, I use 50 percent differences. So those are the settings that I use here. And as long as price action stays between these two times or these two lines, we are continuing that same type of energy.

In other words, the market is not going down with as much enthusiasm as it started. Sometimes it does, but this is a little more typical of what happens.

So it comes back down, hits that tine, comes back up, comes back down, hits that time, it comes back up, kind of rides this one down. Now, when it breaks out of the final one, the final line or tine, then I consider, this downtrend completely done this pitch fork over. Not going to look at that pitchfork anymore.

I could just take it off of the chart if I wanted to. That would be one place to exit. Another place to exit is a little more aggressive. You get a little more reward on it is when you wait for it to break out outside of this major tine here.

And then look for it to come back and see how low it can go. It may not come all the way down here. You could look for things like a double bottom, etc.