Break Into Forex In 12 Steps

Forex brokers are usually tied to large banks or lending institutions because of the large amount of leverage they need to provide. Also, forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). You can find this and other financial information and statistics about a forex brokerage on its website or on the website of its parent company.

Sniping and hunting – or prematurely buying and selling near preset points - is used by shady brokers to increase profits. Of course, no broker will admit to committing these acts, and there is no blacklist or organization that reports such activity. Secondly, when you are trading with borrowed money, your broker can buy or sell at its discretion, even if you had enough cash to cover. If your position takes a dive before rebounding to all-time highs, some brokers will liquidate your position on a margin call at that low. The only way to determine which brokers do this and which brokers don’t is to talk to fellow traders.

The FX market offers multiple avenues to trading success, but in order to take advantage of these opportunities, you must first understand your strengths and weaknesses. Are you more comfortable with short-term or long-term time frames? How will you use fundamental and technical analysis? For more on devising a forex strategy, read Trade To Your Taste.

Don't keep "mental" stop-loss points if you don't have the ability to execute them on time. Always set your stop-loss and take-profit points to execute automatically, and don't change them unless absolutely necessary. Make your decisions and stick to them.

If you go against the trend, you had better have a good reason. Because the forex market tends to trend more than move sideways, you have a higher chance of success in trading with the trend.