making extra money

by David Mwenda forex trader

Review on making extra money

Most people interested in the forex trading always finds themselves in a situation where they don,t know who is the best forex broker they can open a live account with ,but after being in the field for the past five years I can comfortably advice someone which is the best broker and things to choose when shopping for a broker. First check the country which the broker comes from then find the bond that regulate commodity or forex market in that country, go to their website and find whether the broker is registered with them plus their registration number .if they are already registered find whether they have a clean record.
Secondly check know what type of a broker he is since we have two types of brokers 1.dealing desk and non dealing desk, I will expound this on my next article I intended to run this topic as a series

Episode 2 of choosing the best forex brokers. Types of brokers 1.dealing desk 2. Non dealing desk, dealing desk are also referred to market makers they make money through spreads while trading against their clients .they create market and artificial forex exchange rate for their customers .there is no conflict of interest since they provide they their clients with both buy and sell quote hence the decision of client is independent. Clients of market maker do not access to real interbank market rates though the completion is so stiff that the rates offered by these two types of brokers are so close to the interbank rate.
2. non dealing desk broker dont allow their client order to pass through a dealing desk this implies they do not take other side of their clients trade they just act as a link to two parties, they act as a bridge .they make their money from small commission charged or put a markup by increasing spread.non dealing desk can be either ECN OR STP broker. STP stands for straight through processing system they direct their orders to liquidity providers who access the interbank market rates .ECN stands for electronic communication network this broker allows orders to interact with other market players like hedge funds ,retail traders ,banks and other brokers.Particpants trade against each other by providing their ask and bid prices. They get compensated through a small commission.
You can use any type of broker dealing desk or non dealing desk what matter is your trading style since the completion is too fast hence they provide close ask and bid price in forex market. Episode three coming soon watch this space .

Episode 3 of choosing the best forex broker ,Transaction cost-this a cost which every trader in the market is subjected to ,when you enter a trade you have to pay for either the commission or the spread it is advisable to choose a broker who has a cheaper and affordable rates. For a good reliable broker you will cough abit higher.
You need to know whether you require tight spread in your trading and compare your available options ,but priority of security should weigh more followed by transaction costs .Remember cheap is expensive sometimes so be cautious when choosing a broker.
The other factor is deposit and withdrawal .good brokers will always allow you to deposit and withdraw your funds freely without some much hassle .there is no reason for a broker to make it hard for you get your profits .the broker is just the custodian for your funds for the sake of facilitation in trading. The withdrawal process should be speedy and smooth. Watch out for episode four coming soon..

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Created on Aug 15th 2011 03:10. Viewed 1,412 times.

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