Best Forex Trading System

There is a vast number of Forex Trading Brokers eagre to offer you an account and help you with your Forex trading. Most are very professional and have support systems to assist you in your commencement. But as with so many high profile investment structures, there are a number of operations that at the outset, look very professional but then vanish into thin air, with your money.

Within the Forex industry, there are many reports of strange and underhand Broking behaviours, funds and accounts that go missing, reversed and un-authorised trades and other Scams that leave you high and dry with a zero balance, or it could be a simple as barriers and problems withdrawing funds.

So how do you start assessing a Broker for Forex Trading?

Here is a list of items you should investigate that will give you an overview of how a Forex Trading Broker might rate. It is not the ‘be all and end all’ only a starting point, as you undertake your due diligence, it is highly likely you will add others:

1. Where are the Broker’s Registered Offices? As soon as I see places like Panama, the Seychelles or other off shore havens, the warning bells start ringing. I am not saying they might not be very professional, I just check much deeper.
2. Is the Forex Trading Broker regulated by an official Government Body?
3. Contact information. Are they available by phone, or only via email or web enquiry service? Forex is a 24hr market, they need to be available on the phone 24hrs per day.
4. Do they have a recognised trading platform or an ‘In House’ system? Some big Institutions like Dukascopy have their own platform, but many Brokers use main stream platforms like MetaTrader, Currenex or Integral. Many EAs or Forex Robots require MetaTrader4.
5. What spreads do they offer?
6. What is their Broking structure? Are they DD (Dealing Desk) Broker, a NDD (No Dealing Desk) Broker, a STP (Straight Through Processing) Broker or an ECN (Electronic Communication Network) Broker? For a detailed explanation of the differences and how it affects your trading: Read this Article.
7. Speed of Execution of Orders? This is directly related to their broking structure, so investigate (5) above.
8. Leverage offered? Most Forex Trading Brokers will offer 100:1 but some will go much higher for established clients. When you are new, start with 100:1 it is better for your risk management.
9. Do they have minimum account balances? Some Forex trading Brokers require a minimum of US$50k or more whereas others will offer accounts as low as US$1000
10. Do they have access to all major Financial Markets?
11. Do they offer Demo accounts, how many and how long can you demo trade on them?
12. Do they provide PDA feeds and software for mobile trading?

 This should get you started on compiling a Forex Trading Broker ‘short list’. Spend time on your due diligence, it’s your hard earned money and you need to be 110% happy with where you place it.

Popularity: 15% [?]

When you commence online foreign currency trading, you are going to have to set up a currency trading account with a broker. They will provide you with a currency trading platform that will facilitate all your trading activities. One of the more common currency trading platforms is MetaTrader 4, which is provided free by the broker or can be downloaded from here. This it the interface that will allow you to either sell or buy foreign currency. MetaTrader 5 is currently in development and is due for release soon.

There is a vast variety of currency trading brokers and the new trader is often confused by the type of broker. There are two primary types: Dealing Desk (DD) and No Dealing Desk (NDD). You will then encounter NDD brokers which are either Straight Through Processing (STP) and or ECN.. Electronic Communications Network.

Let’s now put some clarity into this confusion:

The Dealing Desk Broker: A Forex DD Broker makes money on spreads and by taking the opposite position to their client. They are the ‘Market Makers’ because when you, the client, buys they sell and visa versa. They are literally making the market because they can manipulate the market, because you, the trader never see’s the true market quotes.

The No Dealing Desk Broker: The NDD Broker accesses direct to the interbank marketplace, all trades are virtually instantaneous with no re-quotes or delays in communication. This is particularly important if you trade during news periods. NDD Brokers usually charge commissions, though some can also derive income from spreads. A NDD broker will either be STP or ECN + STP

Straight Through Processing: This is where the NDD broker communicates directly with the liquidity providers, the banks that trade the Interbank marketplace. There are no intermediaries so everything is executed immediately. STP Brokers do have the ability to alter spreads, which gives them options as to how they make their money. They do not charge commissions.

Electronic Communications Network: These brokers allow traders to trade against one another within the ECN, these traders could be small retail traders up to Banks and Institutions. An ECN broker allows everyone to place and execute competing trades against each other within the ECN. For this reason, an ECN broker cannot make money on spreads but make their money on commission. An ECN broker wants you to make money, otherwise they don’t earn commissions.

So what type of Currency Trading Broker do you select? An ECN broker is the most transparent, dealing in the true market, everything is done automatically without anyone watching who is in the market since there is No Dealing Desk to monitor.

The Dealing Desk broker, has the ability to manipulate the market and one of the results is ‘slippage’ where the spread can change during the execution of an order. This can have a disastrous impact on your trading strategy, as it chucks your pre-determined setups out the window!

Popularity: 35% [?]