LIST OF BEST FOREX BROKERS AND HOW TO PROFIT FROM TREND TRADING
For a trader to be successful in forex trading, he has to be well educated and informed in things pertaining to the trade so that he would be able to overcome and stay away from losses and when hectic situations come up, he would be able to manage it intelligently. As a result of risk associated with forex trading, many traders presumed they will not be able to carry out the trade. We should know that there is no business that does not have risks, even the life we live involves risk. The only thing that is needed is to get equipped with information concerning the trade, and then you will be able to scale through when unpleasant situations show up.
It is worthy to note that forex trading offers more benefit to their traders and investors more than any other kind of trading. Before now, the starting amount for forex trading was high and a lot of traders got scared and left the forex trading but now it has been reduced to 100 USD, with that, one can comfortably open a forex trading account. This has contributed to increasing the number of investors and traders in forex trading. Although, it is wise not to invest so much so you can be able to manage the risk.
Determining The Brokerage & Funding Options
This is where a trader needs to spend concrete time before taking the step of starting forex trading. There are two kinds of brokers which you can choose from and they are Market Maker and Indirect Market Maker.
Market Maker – In this type, forex trading is conducted openly in the currency market.
Indirect Market Maker – This involves using the electronics and communications to transact the trade in the forex market. The major difference between these duos is the service fee which is relevant to the forex services provided to you. Market Maker brokers' service charge is fixed. They take the percentage of the variation between the selling and buying prices.
The ECN Brokers
These are the brokers that charge a definite commission for any sole trade they made. They don't add any additional charges for the bid-ask range. It is very important you read carefully or better still print the contract agreement before you finally open any forex trading account so that you will know the kind of broker you are opening an account with. Note very well the laws that licensed the broker and the governing agencies regulated him before you sign up with him so that you don't start regretting along the line.
You need to also check the different options for funding and payment, together with the rates of interest and fees being charged by the forex broker. But if you choose to be a day trader, you might not really bother yourself with the rates of interest because you won't be holding your funds overnight. If you keep a place overnight, there is no way the forex broker will not charge you the interest. There are some exceptional cases though; the Islamic law is against interest, so many brokers give interest-free account for only Islamic people.
The Best Way To Find Trends
There are different indicators that can assist you to find where there is a trend. The indicators are based on moving averages or even related indicators. These indicators work very well but some traders don't know how to use them, thereby ending up in errors. Apart from indicators, there is another simple way to know where there is a trend and that is being able to count. You can start by asking yourself this simple question; this currency is it trading higher than it was before or trading lower?
Once you get the answer, you have gotten the trend. If the currency is trading higher, then there is an upward trend, in this case, you have to go for long trades but if it is trading lower that means there is a downward trend, and you have to go for short trades. Another thing that would guide you is comparing the price with what it was in the past three or six months ago. If the price was higher three or six months ago, then definitely there is an upward trend and when it is lower, there is a downward trend. This helps you too to know whether to go for long or short trades. This knowledge helps you to know the trend to follow and in which direction.
The Best Way To Pick Your Entries For Trade
The foremost thing to know is that when you only trade in a similar course as solid trends, you have covered the most important ground when it comes to forex trading. Getting to trade with the long-term trend is significant than the type of entry strategy you use. Most people don't know this, so they waste so much time on the tricks of entry forgetting the trend. For sure, entries are very much important but going by the good trends is more vital. The most excellent way to go into a trade in forex trading is to wait for a move against the trend. Then as soon as this happens, enter in the course of the trend immediately the price starts going in the direction of the trend.
Try To Refine The Trade Entries
There are some currency pairs that its relevance is determined by the time of the day. For instance, if your trade has to do with GBP/USD, there is every possibility that the best trades starts in London business hours. So when you get to know the timing, you would be able to know how to refine your trade entries.