Welcome to Forex Trading Guide
Foreign Currency Exchange Rate Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Forex Brokers
from: Simon HarrisMost FOREX traders use a broker to handle their transactions. What exactly is a broker? Strictly speaking, a broker is an individual or a company that buys and sells orders according the investor's decisions. Brokers earn money by charging a commission or a fee for their services.
A FOREX broker needs to be associated with a large financial institution such as a bank in order to provide the funds necessary for margin trading. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.
Before trading FOREX you need to set up an account with a FOREX broker. You may feel overwhelmed by the number of brokers who offer their services online. Deciding on a broker requires a little bit of research on your part, but the time spent will give you insight into the services that are available and fees charged by various brokers.
The best advertising is word-of-mouth advertising, and this is just as valid in FOREX trading as it is for any other type of business. Talk to friends and associates to see who they are dealing with and find if they have any complaints or difficulties in dealing with a particular broker.
You could try selecting a few online brokers and contact their Internet help desks to see how quickly they respond to enquiries and whether or not they answer questions to your satisfaction. Keep in mind, however, that pre-sales service may be better than after sales service. This can be true for any online business, not just FOREX brokers.
Customer satisfaction and safety are just part of the story. You want to find a broker who executes orders quickly and with minimum slippage. All online brokers should offer automatic execution and have clear policies regarding slippage. They should be able to tell you how much slippage can be expected in both normal and fast-moving markets.
Next you want to know the fees involved. What is the spread? Is spread fixed or variable according to the type of account? Are mini accounts subject to wider spreads? Are there any other charges? Smaller spreads mean more profit for the trader, but there may be a trade-off between spread and service. Look at the overall picture before deciding to go with a particular broker.
Margin accounts are the lifeblood of FOREX trading, so be sure you understand the broker's margin terms before setting up an account. You need to know the margin requirements and how margin is calculated. Does margin change according to the currency traded? Is it the same every day of the week? Some brokers may offer different margins for mini and standard accounts.
Trading software is very important for the online FOREX trader. Get a feel for the options that are available by trying out a demo account at a few online brokers. Above all, you are looking for reliability and the ability to perform well in fast-moving markets. The software should offer automatic trading and may have special features such as trailing stops and trading from the chart. Some features may only be available at an extra cost, so be sure you understand what your trading needs are and how much the broker charges to provide them.
Other information to find out about includes the broker's policy regarding minimum account balances, interest payments on account balances, which currencies can be traded and whether or not non-standard sized lots can be traded. You should also find out whether clients' funds are insured and the extent of that insurance.
About the Author
This article provided courtesy of http://www.about-forex.net
Foreign Currency Exchange Rate News
Yemen currency hits lowest exchange rate despite Central Bank continual injections
Yemen's rial hit a new record of low exchange rate against the U.S. dollar on Friday despite the latest of series of cash injection by the country's Central Bank in a bid to help ease the rapid depreciation of the rial, Yemen's currency, local traders said.
Read more...BSP foreign exchange swaps climb to $16 billion in first half
The Bangko Sentral ng Pilipinas (BSP) reported that its foreign exchange forwards or swaps totaled $16.11 billion as of end-June, up from May's $15 billion. The BSP has been unwinding its foreign exchange (FX) swap positions in the past months and buying dollars from the spot market to smooth exchange rate volatility. In June, the BSP purchased $831 million FX and sold $530 million.
Read more...China aims to make yuan convertible: chief currency regulator
The ultimate goal of China's exchange rate reform is to make the yuan a fully convertible currency, Yi Gang, head of the State Administration of Foreign Exchange (SAFE), said Friday.
Read more...Manila plans new dollar debt swap for older notes
The Philippines plans to exchange new longer-dated, dollar bonds for existing securities with shorter maturities in its first foreign-currency debt swap in four years, to free up more cash for economic stimulus.
Read more...Rupee strengthens to a month's high at 46.40 against Dollar
Mumbai, Jul 30 (UNI) The Rupee strengthened to a month's high today rising by 13 paise to 46.40 against the Dollar on selling of the American currency by exporters, traders at the Interbank Foreign Exchange (FOREX) said here.
Read more...Rising yuan will not hurt trade, say bankers
There is no foundation for the yuan to move sharply and China can maintain a flexible exchange rate mechanism, making the currency stand at a basically reasonable and balanced level, a senior central bank official said on Friday.
Read more...Fitch Affirms Transportadora de Gas del Sur S.A.'s Foreign Currency IDR at 'B'; Outlook Stable
BUENOS AIRES, Argentina--(BUSINESS WIRE)--Fitch Ratings has affirmed Transportadora de Gas del Sur S.A.'s (TGS) international ratings as follows: --Long-term Foreign Currency Issuer Default Rating (FC IDR) at 'B' --Long-term Local Currency IDR at 'B+' --USD 500 million, 2017 notes, at 'B/RR4' The Rating Outlook is Stable. Approximately USD 381 million of local and international bonds are ...
Read more...