By Molly Gavin
Choosing a good broker in forex trade can lead to huge profits. Be aware of the different types of brokers and how each one works with your trading strategy. We suggest picking cm trading as they are reputed and regulated.
Trading and brokers
Brokers are financial institutions that allow traders to trade in the foreign exchange market, also called Forex or FX; its over-the-counter (OTC) nature is what makes it so popular among speculators and investors. The broker acts as an agent between a seller and buyer: while sellers want their currency sold for dollars or euros, buyers would rather trade some other currencies for these two major ones.
Trading involves buying currencies that you hope will increase in value, choosing which companies or countries you trust most at the moment but not just trading based on hunches – after all, there are always economic calendars available that can tell you about the current status of a country’s economy for the next three months. Broking is usually done electronically, although brokers prefer to have a personal touch with their clients, almost like having an office where traders can come in and ask questions.
Individual responsibility
As a trader, it will be your responsibility to monitor the prices of traded currencies 24/7 because market changes occur all the time. Moreover, since Forex trading never ceases, even overnight and on weekends, you must work with online brokers that hire employees or contractors to operate their business until they close. But this does not mean that you should solely rely on automated trading: it is important to use your own judgment in the timing of trades.
Training and resources
Brokers offer training for forex traders, and there are several ways a trader can train themself. One way is through online tutorials; while they do provide basic information about the forex market, it may be best to put more stock in live seminars conducted by brokers – especially the famous ones like Saxo Bank, one of Europe’s biggest banks with its offices based in Denmark – because these offer real-life situations and actual scenarios that can happen when trading currencies.
Trading systems are usually software programs designed to follow instructions set up by the programmer who created them. While there are many strategies to try, the most popular ones are trend-following systems and those that attempt to forecast when a currency will have extreme peaks or bottoms.
Trading software programs
Many trading software programs are available for purchase because forex traders continue to grow in number every year; beginners should stick with something simple like MetaTrader 4 (MT4), which is basically what Saxo Bank uses for its clients. MT4 is an easy-to-master platform that allows you to get started right away without having to deal too much with the technical side of things. However, it does allow customization of parameters so that every trader gets his own unique version.
The biggest difference between MT4 and other trading platforms is that it pays attention to every tick of a currency pair, allowing its user to set up alerts and receive notifications on the platform through a pop-up window.
