Introduction To Forex Currency Trading

The Forex Market , which is commonly known as the forex market or simply as Forex (Foreign Exchange Market) is currently the largest and most liquid financial market in the world, with a daily turnover of around $ 3 trillion Of millions), which leaves it well above other financial markets such as securities or commodities.

Forex trading is simply based on buying one currency and selling another. In this case the investor seeks to make money with the rise or fall of the prices of a given currency with respect to the other. In the Forex you can earn both long (buy) and short (sale) positions since the purchase of one currency involves the sale of another and vice versa.

Global currencies are traded through floating exchange rates and are always marketed in pairs, the most popular being to trade the EUR / USD, the GBP / USD and the USD / JPY, ie the currencies of the most Of the planet. However there are dozens and dozens of currency pairs that can be traded, therefore there is a wide variety to choose the investor, however most are limited to the above.

The Forex market as such, started to work in 1971 after they abandoned the fixed currency changes. Unlike the stock markets that operate a few hours a day (the New York Stock Exchange does logically with New York time), the Forex operates 24 hours a day, 5 days a week. This is because at any time, somewhere in the world there are always banks, people and financial institutions buying and selling currencies.

This market involves investors of all types, from individuals to large organisations, central banks, trading companies and brokerage agencies, large and small.

In itself, the Forex market does not operate from a fixed location, although there are very important centers of currency trading located in cities like New York, France, London and Tokyo. At present it is a market that is based more on the use of technology, since it operates mainly through internet or the telephone, which are the most used ways to carry out transactions by both large and small investors.

Buying and selling currencies is a key element in supporting world trade, and as major currencies move against each other, there are and will continue to be opportunities to make money from monetary transactions. This is why, even in times of crisis when other financial markets were depressed for months, the Forex was always in full activity and full of opportunities to make money. And while important players in the market buy and sell in millions of dollars deals, small investors also have a place in the Forex.

The Forex itself is a fairly technical financial market and it takes time to learn the basics and develop the skills needed to use some of the available tools such as technical analysis and fundamental analysis that allow you to operate properly in this market. However learning all these concepts only requires time and dedication.

However, it is not necessary to become an expert to make a profit from these operations. With time and effort it is quite simple to acquire enough understanding of the system to make money trading currencies online. In addition to the technical aspect, a mental preparation is necessary, since in the Forex, psychology is everything, you can master all aspects of market analysis, but if you do not have the right attitude, you will go to disaster.

For many people, the internet is a starting point for learning currency trading. While the Forex market is a fairly risky means of making money, which should be made clear from the outset, it is an excellent opportunity for those looking to increase their profits and even become economically independent.

How To Use Camarilla Equation In Trading

The Camarilla equation was discovered by the trader Nick Stott in 1999, until recently a secret formula that allows to determine price levels similar to the pivot points, although according to many traders are more effective. Part of the assumption that the market has the tendency to return to a certain point of equilibrium that we could call average, pivot, etc. Based on this idea and through the equation it is possible to calculate 8 price levels in which changes in the trend are likely to occur.

As mentioned at the beginning of the previous paragraph, the Camarilla equation was secret until it was somehow made known. The equations for calculating the 8 levels are as follows:

H4 = ((HL) * (1.1 / 2)) + C
H3 = ((HL) * (1.1 / 4)) + C
H2 = ((HL) * (1.1 / 6)) + C
H1 = ((HL) * (1.1 / 12)) + C
L1 = C – ((HL) * (1.1 / 12))
L2 = C – ((HL) * (1.1 / 6))
L3 = C – ((HL) * (1.1 / 4))
L4 = C – ((HL) * (1.1 / 2))


H = It is the maximum of the previous session.
L = It is the minimum of the previous session.
C = It is the closing of the previous session.
As in the case of pivot points, there are currently variations to these formulas, the best known being the one that adds the following two levels:
H5 = (H / L) * C
L5 = C- (H5-C)

How do you operate the Camarilla equation?

Levels L1, L2, L3 and L4 are considered as carriers, while levels H1, H2, H3 and H4 are considered resistors when operating using the levels calculated with the Camarillas equation. In this case the levels of L3, L4, H3 and H4 are considered the most relevant. Therefore, when the price reaches the H3 level, it faces a very strong resistance in which the trader must consider opening a selling position and closing any position of purchase that has. If you open the sales position, you must place a stop loss on H4. Similarly, if the price falls and reaches L3, the trader must open a buy position and place a stop loss on L4.

When the price breaks the H4 and L4 levels it is recommended that the trader enters the same sense of the break, ie he must buy if he breaks H4 and sell if he breaks L4. However, it is important to wait for the price to remain above H4 or below L4 for at least 2 candelas or more.

Of course this is not a recipe that must be applied 100% all the time, each trader can use alternatives to this system that will depend to a large extent on the market in which it is operating. For example, some experts have verified that in the case of the Forex market, when breaking the level H3 it is best to enter buying with H3 target. The same applies in the case of the break of L3, ie open a position of sale with objective in L4. While this seems to go against theory and common sense, it seems that historical data prove the usefulness of this modification. In the end, as with any trading system, it is best to evaluate it in a demo account to avoid unnecessary losses.

How To Develop A Successful Forex Trading Plan? Part 2

Once you start trading, it is important that you take the habit of evaluating the results of your trading plan to determine the total number of trades and the percentage of winning trades and losing trades. This will allow you to establish your defects as an operator so that you do not make the same mistakes again. You can also determine which strategies have really been beneficial and which, on the contrary, produce more losses than profits.

To analyse the market, traders often use one of the following approaches: technical analysis and fundamental analysis. Traders usually focus on one type of analysis or another, however in some cases they operate by combining both as a way to leverage their strengths and compensate for their weaknesses. Technical analysis uses graphs, indicators, statistics and formulas of various types to determine entry and exit points of the market. For its part, the fundamental analysis is based on the study of economic, financial, political, social or other news that can affect market prices. Examples of indicators used in this type of approach are the interest rates of banks, employment levels, inflation, etc.

When designing your trading plan, the operator must choose what type of analysis to use to study the market and make their decisions. As mentioned above, some traders use both approaches fairly successfully, so it is a matter of the trader to use the methodology with which he is most comfortable.

The trader must adapt all these recommendations to his personality and his tastes in such a way that he is comfortable to operate based on his trading plan. Each operator has different goals, needs and realities, so your trading plan must take into account all these aspects and be designed in such a way that allows you to take advantage of the different opportunities presented by the market.

Now that we have a clear idea about what a trading plan consists of and its importance for the success of every operator, here is a summary of the main parts that you must keep:

  • Aspects that must include a good trading plan
  • Goals of the trading plan.
  • Schedules in which we are going to operate.
  • Trading strategies and type of analysis that we are going to use.
  • Trading tools.
  • Indicators that we will use to analyse the market.
  • Evaluation of results.

If you want to be successful as a long-term trader it is important to put your trading plan in writing and follow it in a disciplined way, otherwise it would not make much sense to elaborate. At first it can be difficult, since by our nature we human beings have the tendency to try to save us steps and to do things more by hunch than through a strict and properly elaborated plan. However if we manage to achieve this our chances of gaining profit will surely improve.

A written trading plan will prevent us from getting carried away by the doubts and confusion caused by the stress and pressure that the market can cause on many occasions. Keep a copy of your plan handy and keep it on hand with your computer every time you are operating, so that you can check it at all times.

How To Develop A Successful Forex Trading Plan? Part 1

Every day hundreds of traders try their luck in the market expecting to gain high profits quickly, however only a small percentage of them succeed. The majority ends up failing and withdrawing from the market since, like everything else in life, to be successful in trading requires an adequate work plan which must undoubtedly be based on constancy and discipline without which it is impossible for us to have Success as traders.

If we want to develop a trading plan that we find useful we must take into account the following aspects:

First of all, the first thing to do is inform us before even making our first operation in the Forex or any other financial market. A proper preparation involves documenting through articles, books , reports and even consult with experienced traders that we know. The Internet is a good source of information about it, in fact there are sites that provide valuable information. It is also possible to take courses on the subject taught by experts.

Research and learn about the different types of trading and the strategies that exist to operate in the market. Before using these strategies with real money practice with them in demo accounts for at least 4 months while getting used to the way the market works. If you use a new strategy with which you do not have previous experience, it is important to perform backtesting tests, by means of which it is possible to verify the performance that the strategy can offer by evaluating it through historical market data. Likewise, learn to use stop Loss to avoid excessive losses in their operations which will also help you to manage your capital more adequately. Study all the tools that can help you improve your chances of success in the market.

Keep up-to-date with the market, this is often very changeable as everything around us. For this reason it is vital to keep properly informed about everything happening in the market every day in such a way that we can react properly to the different conditions that may arise. Every day we can find new opportunities and discover some new trading strategy that is more profitable than the one we currently use, a new indicator that gives us better market signals or more appropriate analysis tools. We should always leave a space during the day to update our knowledge base on the market.

Establish from the beginning a schedule to operate in the market which must respect religiously, remember that discipline is the basis of success in trading. It is important that we get used to operating at the same time each day. Expert traders recommend dedicating at least 4 hours a day to the market and either in the morning, afternoon or at night we must always operate at the same time as the way the market behaves changes depending on the schedule due to the Sessions of the most important financial markets worldwide. If a trader does not have a set timetable and operates every day at different times, he will not be able to develop a deep knowledge about the market which in the long run can lead to failure. When we choose a certain time to operate we must take into account that at that time there are no distractions that prevent us from focusing on our operations. A recommendation to determine what time is best for us is to operate with an account at different times and compare the results obtained in each of these periods.

What Are Spreads In Forex Market?

Basically, the spread is the cost that each of the operations that the Forex investor makes each time he makes an operation. The cost per transaction varies according to the broker with which the Forex investor is registered. Thus, these costs vary and there is no measure applicable to all platforms, and varies greatly if a Market Maker or ECN is used.

As for the language used around the spreads, it is known with the term “ask” to the difference between the price to which one buys with the real price. It is called “bid” to the difference between the price to which one sells with the real price. These two terms are commonly used in the language of Forex investments.

Spreads are, so to speak, the money that the Forex investor money managers or brokers charge for doing the trades he requests. These spread are the gain that these people or companies that give others the means to invest in Forex (especially for those who do not have large sums of capital).

How to select the most suitable broker in spread according to the needs of the Forex trader?

It is important to keep in mind that in order to obtain a low cost per operation, that is, to obtain low spreads, there must be few intermediaries between who requests the operation and executes it. The less intermediaries you have in an investment in Forex, the more likely it is that the spread will be low. This is because each of the intermediaries that are part of an investment will make a profit by performing such an operation, thus, the one that operates directly will charge the first one who requests it, the second will pay the first, but also look for a Gain, therefore it will charge more to another that requests the operation in order to obtain its profit, and the chain continues like this, intermediary through intermediary until arriving at the queue.

Generally, in the different investment platforms that are offered in the Forex market there are different prices per currency pair. Thus, the spread for the EUR / USD pair may be much lower than the spread for the EUR / JPY pair. It is important to find out in advance what spread the different investors are using the company to which the future Forex investor intends to ascribe, to know if these are adjusted to the conveniences of the investor. To explain it better, let’s say that a person who knows that most of their operations will be in the EUR / JPY pair, it is more convenient to look for a company where the spread of this pair is low even though suddenly in others Pairs do not come out so profitable.

How spreads work?

To better illustrate the issue of spreads in the Forex currency market, we will show you how this would work in a hypothetical case.

Let’s say an investor wants to buy in the EUR / JPY to 5 per transaction. Immediately the intermediaries of him will satisfy the request of his client, with the difference that they will be buying this request to 4 per operation, obtaining like profit by operation a unit. Then, if the investor wants to sell what he has bought (and assuming the price of the pair has not moved), he can only sell it to 4 units, as this is the price that is directly sold in the market.

That is why to gain profits when investing in Forex is necessary to overcome with advantage the price of the spread, otherwise our accounts will remain in zeros or negative balance.

Why is it important to know the spreads?

One of the biggest difficulties with regard to the topic of spreads in the Forex market world is to really know how much the company or broker that we have contracted for the service is charging for the operation. In fact it is possible to manipulate the spreads on the trading platform without the customers noticing. That is why every time the technological advances offer more guarantees for the clients in order to determine the cost of the spread in the company in which they are. In addition, Forex is monitored and sanctioned companies that can do patrimonial damages to their customers via this route.

How To Use RSI Indicator In Forex Trading?

Many of us have started trading in Forex or any other financial market using technical indicators to open and close positions in the market as if they were all powerful oracles which is not true, as we have learned many painfully. Today we are going to talk about the use of the RSI indicator, one that is incorporated by many traders into their trading strategies. One mistake that many beginners make is to believe that the RSI (Relative Strench Index)  signals are in themselves indicative of entering or leaving the market. It is not uncommon to read in forums and sites things like the following:

If the RSI is above 70, then you should sell and if it is below 30 then you should buy. However, much of the time remains between levels 40 and 60 so you do not know what to do.

The first thing any expert will tell you is that you can not rely solely on the RSI to make decisions regarding our operations in the market. This means that this is not an indicator that will give clear signals to open or close positions by itself and with a high degree of reliability. If you rely solely on the RSI, you are making a mistake. Generally, indicators work in combination with other indicators to discover and confirm potential trades. In addition, in the opinion of some experts, the RSI only has a significant value when compared to other indicators.

Second, even if you only use the RSI, or if you use it in combination with other indicators, the 70/30-based “buy / sell” rule is not a rule in reality, but rather a guide Few traders have lost their money trading on the basis of this so-called rule). Generally, when the RSI is at level 70 the market is considered to be “overbought”. However, when it is at level 30, the market is said to be “oversold”. However, even though these readings could be considered in this way, the trader should take into account other factors in the RSI, such as the movement time either at the 70 or 30 level,

Two of the best indicators to use in combination with the RSI are the MACD (Moving Average Convergence Divergence) and the Stochastic Oscillator. Both indicators give information about the momentum, which allows the operator to compare with the information that the RSI is giving.

Something that is seen very frequently in the Forex, is that the RSI seems to be in the middle levels most of the time. However, the reality is that on many occasions the RSI moves at the extreme levels of 30 and 70, what happens is that you have to invest a lot of time observing the price charts to detect these events. The direction of the RSI depends on the price action in the market, and in the days of high volatility in the Forex market, it can be said that the RSI spends as much time in the 70/30 levels as it does in the middle levels . Now, regarding what to do when the RSI moves in the middle levels, this depends on the strategy of each trader since there are some that operate based on these.

How To Protect Your Forex Profits?

One of the most disheartening experiences in forex trading is to look at how a winning position quickly becomes a loser quickly before our eyes. Any Forex trader knows that there is nothing worse than looking at how the profits disappear and become lost. This situation is the nightmare of many traders and can only be attributed to poor monetary management .

One of the most important things in Forex trading is to protect your profits. In many cases it is much wiser to accept a small profit of only a few pips than to expose to suffer great losses. The best Forex traders are first big survivors and second big winners. After all, remember that as an operator you are playing with your money so the most logical thing is to protect it at all costs. Otherwise, you probably will not stay in the game for long.

However, protecting your profits is not as simple as it sounds. For example, when you reach a particular profit level, you must move the stop loss and put it at least at breakeven, where you do not win or lose. This very important action will completely protect your trading account and allow you to at least not lose money in case a position is going against you. However the problem with this is that if you move the stop loss too soon you risk the position being closed too quickly just to observe that the prices move directly in the direction of the market that had previously chosen.

If, on the other hand, you wait too long, you could be exposed to a long price correction that could get you out of the trade altogether and cause you greater losses. The best way to overcome these problems is by determining a gain-loss ratio and an expected gain value from your selected Forex strategy using a demo account or by risking a small amount from your actual account.

Another method to protect your gain is to operate using two lots at the same time. With the first batch you can set a target based on the next resistance level (in case the position is long) or the next level of support (if it is short), in any case that target should be attainable. From there, you can set a second, more ambitious target for the second batch. Once the first target is reached by the first batch, you can move the determined stop loss for your second batch to breakeven which will allow you to operate risk free from this point.

In fact, in this at this level you will have already achieved a significant benefit. Always remember that achieving success in Forex is simply the art of making more winning trades than losers. Believe it or not, many operators, especially novices, do not even consider the use of viable exit strategies. It is important that every Forex trader understands, that having a successful exit strategy along with good monetary management, are vital to the success in the difficult world of the Forex market.

Forex Brokers And Spreads Comparison

Trading in the Forex market is constantly growing in popularity. New Forex broker companies are opening up at a very high rate. Many people who are accustomed to working in jobs of 9-5 are leaving their jobs and start trading with hard currency. There are many explanations for the growth of the forex currency market, some of the most obvious is its size, its simplicity, and its potential benefits.

Now let’s talk about Forex trading. The vast majority of online Forex brokers advertise in very large letters on their website that do not charge any commission for trades. With the exception of a few brokers, the currency market allows traders to open and close positions with no commission whatsoever.

Therefore, it does not cost anything to trade in Forex. This, of course, raises the obvious question: How do Forex brokers make money?

This is where it gets complicated. It is true that many brokers do not charge direct commissions for trading in the Forex market ( ECN brokers do so), but brokers engaged in forex trading do not perform trades that tell traders the goodness of their hearts . You can be sure that they are profiting from your services and these are usually quite high. They charge what are known as spreads.

Before understanding what spreads are and how they are calculated, it is important to understand a fundamental principle on how the Forex trading system works. Everything is based on supply and demand, just like any other market. If there is a greater demand for dollars, the value of the dollar rises against other currencies. This is precisely how spreads are defined and calculated.

The spread is the difference between the price at which a broker is going to buy the currency for you and the price at which it is sold. So, for example, if you open a position where the base currency is the dollar, and since there is no shortage of dollar demand, the spread of this operation will almost always be smaller than a spread for a less common currency . Why? This is again, by supply and demand. The agent will have no problem whatsoever at the time of selling the dollars you just bought, so you do not need to charge the operator, or you, a higher spread. Now that, if the base currency of the position is the Vietnamese Dong), it is understood that it is very likely that the spread will be higher.

It is extremely important that Forex traders understand the importance of the spread when it comes to choosing a forex broker. The difference that a pip can make in the spread of a broker can be the difference between a successful Forex trader and one that fails completely in the currency trading market.

Just to summarize, let’s look at a specific example of a spread to understand how it works exactly. Let’s say that we have a USD / CAD purchase price of 120.00 (which is the price at which the agent is willing to buy the USD) and a sale price of 120.05 (the price at which the agent is willing to sell the USD ). In this case, the spread is equal to 0.05, or 0.0005 dollars, and the money goes directly into the pockets of the broker.

Traits Of Exotic Currency Pairs

Traits Of Exotic Currency Pairs

The term exotic currency is used to describe the currencies which are not traded as frequently as the major or minor currencies. It doesn’t mean that they are any weaker than the popular currencies – they simply have a different following and they are not in demand by every single foreign exchange market trader. The liquidity of the exotic currencies is not extremely high and trading with them presents a new set of challenges for a trader. The size or the location of the originating country does not play a key role in categorization of an exotic currency. Instead, it all comes down to the popularity of a certain currency in the foreign exchange market and the number of trades which are completed using that currency on a daily basis.

Most common ones

The exotic currencies are usually paired up and traded against the US dollar. The most common exotic currencies are Hong Kong dollar (HKD), Singapore dollar (SGD), Russian Federation ruble (RUB), Indian rupee (INR), Saudi Arabian riyal (AED), Egyptian pound (EGP), and many more. Due to the ever-changing geopolitical situation, the list of the exotic currencies is often updated and modified. Some traders put the currencies of the Scandinavian countries on this list as well, but since they have higher market liquidity than all the other exotic currencies, they obviously belong to the category of minors. As you might have noticed, all of these currencies come from large countries located in Asia, Africa or Middle East that have strong or blooming economies, and they have a high value. Therefore, the exotic currencies are not weak in any matter; they simply lack prominence and position.

Some traders put the currencies of the Scandinavian countries on this list as well, but since they have higher market liquidity than all the other exotic currencies, they obviously belong to the category of minors. As you might have noticed, all of these currencies come from large countries located in Asia, Africa or Middle East that have strong or blooming economies, and they have a high value. Therefore, the exotic currencies are not weak in any matter; they simply lack prominence and position.

If you decide to trade the exotic currency pairs, you have to know how to approach them as well as understand the pros and cons of these trades. Preparing yourself for this sort of trade is not different from the groundwork you are supposed to do when trading with any other currency pair. You have to do the proper examination and research which is a standard procedure if you want to ensure you will not make a wrong move. Since exotic currencies are paired up with the US dollar, you have to start there. That means you need to study and analyze the economic calendar and the data releases related to it. Then you should do the same with the exotic currency you have chosen to trade. The value of the exotic currency depends on the US dollar so exploring that part of the pairing shouldn’t be too difficult since the information is available almost everywhere. However, finding the details about the exotic currency of your choice might be a bit difficult since the data might not be in English language, or unavailable on the most websites which deal with the headlines and updates from the world of forex. This means you need to dig a bit deeper in order to find the documentation you need in order to do your research properly. The majority of experienced traders stay away from the exotic pairs partly because of this. The preparation for trading the majors or minors already consumes most of their available trading time and they simply do not need any additional analysis.

Not suitable for novice traders

The traders who make a decision to invest their time into trading the exotic currencies can expect a huge profit if they do it properly and correctly. They are perfect for both long term as well as medium term trading and the fact that they are volatile can be beneficial in the long run. But there is a risk involved as well, especially with the low liquidity these pairs typically possess. It can make trading more difficult and the transactions are sometimes done with using the pre-determined or fixed rates. Also, the exotic currencies are prone to extreme fluctuations due to the political situations in their originating countries. The perfect example is the price of Russian Federation ruble which was affected by the conflict in Ukraine in 2014 and the aftermath can be still seen in the foreign exchange market.

Taking all things in consideration, it is obvious that trading with the exotic currency pairs is not recommended for novice traders or short term traders. The traders who are more experienced and know how to use wider spreads to their advantage can truly benefit from the exotic currency pairs. Also, the exotic currencies are more popular with the large investment firms or banks since they are the ones that normally use the long term trading. They simply have more money on their accounts and they can afford to lose some in order to make a profit over a longer stretch of time. Of course, if you are an individual trader and you have enough funds on your account, you are free to do the same. If you know how to do it properly, your profits will be larger.


The exotic currency pairs are not suitable for every single trader in the foreign exchange market. The risk is greater than with trading the major or minor currency pairs and they require more experience, as well as tremendous patience since the best way to trade the exotic currency pairs is by using the medium or long term positions.
If you are just starting out, it is best to stick to the major currency pairs and perfect your trading strategy and learn how the market moves and changes. But if you are an advanced trader who wants to take on another challenge, the exotic currency pairs might be exactly what you have been looking for. Clearly, you will have to modify the existing or even create a new trading strategy since the exotic currencies call for a different approach, but that shouldn’t be a problem since you are probably familiar with the market. The exotic currencies can be very appealing and if you learn how to trade them, the reward will come.

Understanding The Role Of Forex Brokers

Understanding The Role Of Forex Brokers

Since the foreign exchange market is decentralized, meaning that there is no central governing body that runs the market, every single transaction and exchange is done through brokers or brokerage firms. The foreign exchange market is constantly growing and new brokerage firms are opening on a daily basis. The increasing number of brokers gives every trader the ability to choose which brokerage firm they wish to conduct their business through. Of course, the brokerage firms are competing with each other, providing different services to the future customers and offering them various benefits if they decide to continue trading with them.

If you are just starting out with trading on the foreign exchange market, you will be choosing your brokerage firm very soon. There are many options out there and you will have to decide which broker suits your needs the best. This article will serve you as a guide and it will point you out some key features you should pay attention to during your research of brokerage firms and what to be wary of. Just like in every line of work, you might encounter some brokerage firms which are not trustworthy and it really important that you are capable of identifying and staying away from them.

Key features

Surely, every brokerage firm has to start somewhere and you shouldn’t cross off the new brokerage firms right away, but always take a look at the date when the firm was established. If they are providing services to forex traders for a long time, that speaks a lot about their professionalism and success in general. The brokerage firms whose only goal is to fraud prospective traders usually do not last long and they are closed very quickly. If the firm is older than one year, it means that they remained in business and that investors are choosing it for conducting the trading business.

It might sound silly to pay attention to the location of the brokerage firm since all exchanges are done online, but it is of great importance nevertheless. Different countries around the world have different laws when it comes to trading on the foreign exchange market and it is advised to choose a brokerage firm which is located in a country that has strong regulations in case something goes wrong regarding the brokerage firm you are using. A trader has the ability to file a complaint or to contact the authorities and their rights will be protected. This level of safety for traders is not available in every country so make sure you know the exact physical location of the brokerage firm and the rules and regulations which are installed in order to protect a trader.

The brokerage firm should also set their own regulations outside of the official government in order to keep the safety of their clients when they are trading with them. The brokers should also be registered and given a permit to run their business. Every brokerage firm that is serious about their work should have that information available on their official website and anyone should be able to see it. It is most commonly located in the section of the website which describes the firm and gives the details about their history and the way they operate.

Brokerage firms offer their own trading platforms and traders should take a closer look at them as well. A trading platform should be easy to use and provide a trader with the easy access to the charts and any other tool for analysis they want to use while trading. The design should be pleasing but not too complicated and the most important buttons which are ‘buy’ and ‘sell’ should be clearly visible. Some traders might also be interested in customizing the trading platforms, meaning that they have the ability to pick and choose the information they want to receive. Filtering the news is another great option especially if a trader wants to use the trading platform for the fundamental analysis as well.
The best way to see if a trading platform suits you is to open a demo account. Most brokerage firms offer this option for free and you can use it regardless of your previous experience on the foreign exchange market. The demo accounts are a great way to learn about trading on the forex market but they are also useful if you want to test out the trading platform as well.

A number of brokerage firms also have mobile applications for iPads, iPhones, or Android devices available for their clients. These applications are often free of charge once you register with a firm and open your trading account. Using a mobile application can make trading a lot easier if you are away from your computer for longer periods of time, granting you the access to your account whenever you wish to do so.
It has already been mentioned that the brokerage firms are competing amongst themselves when it comes to different offers they have for the future users and that information can be very valuable when opening a trading account. You should look into standard and micro accounts, depending on the amount of money you wish to invest in trading on the foreign exchange market. Standard accounts are more suitable for professional traders who are ready to invest a significant amount of money, while micro accounts are appropriate for the novice traders who are just starting out on their trading journey. The minimum deposit or the amount of money you need in order to open an account varies depending on the brokerage firm. If you want to start with the standard account, you need to have at least $1000 as your deposit. On the other hand, micro account can be created with as little as $1.

Leverage is another thing you should learn about when searching for an ideal brokerage firm if you plan on using that option when trading on the market. Surely, leverage can be both good and bad and it is up to you to make a decision whether you are capable of making the best of it or not. You need to be aware of the risks which you might be facing when using the leverage. Some brokerage firms offer higher leverages for all of their clients, not only for the standard accounts, so if you want to take an advantage of that offer, you should find a broker that provides the leverage you want to use.

Customer support

A brokerage firm should be available for their customers around the clock since many of their clients live in different time zones and trading on the foreign exchange market happens twenty-four hours a day. Some offer live chats while others have telephone lines reserved especially for serving the customers and helping them out if they have any trouble with using the website or the trading platform they offer. Even if you are not experiencing any malfunctions, you should test it out and call the support just to see if they are truly available to you at any given time.

Of course, brokers are earning money from you whenever you use their services. It is not a large number and it goes unnoticed with some foreign exchange market traders but a brokerage firm should clearly state what the source of their income is. They most commonly make money from the difference between the bid and ask price and they only take a few pips. Some might even try and advertise themselves as a brokerage firm that takes absolutely no commissions, but they earn money from wide spreads. Overall, the firm should tell you what they are charging you for since every customer has a right to know that information. Look around a brokerage firm’s website and you should find that data if the firm is respectable and serious about their business. A broker should be transparent and provide you with every detail you want to know.


Choosing a right brokerage firm is a difficult task for some forex traders because they are eager to start trading right away, but it is of paramount importance to take your time and find the right broker. Always keep in mind that the brokerage firm you select will be the place you visit on a daily basis and they will provide you with their services in every trade you make on the foreign exchange market.

Doing a proper research into these firms can help you a lot in the long run and you shouldn’t take it lightly. Explore every option or service they offer and think about the way it might aid you when trading on the forex market. Traders sometimes overlook these details in favor of low prices the firm provides, but they are significant as well. After all, you are putting your money in their hands and since you have the option to pick and choose, take an advantage of that and find the right brokerage firm that suits your needs.