How to choose the best broker?

There are a number of important factors to be considered as you decide on the forex broker best suited to your expectations. Assuming that you’re a beginner, you do not possess a background in trading or similar risky activities, and every single concession that you can get from the broker is an advantage increasing your chances in trading, and improving your profitability. Since it is highly likely that the initial period of your career will involve setbacks and problems (after all, did you learn swimming in your first attempt?), you must make the necessary arrangements to minimize your risk, and one of the best ways of doing so is choosing the right broker. There are a couple of things which can help you with the selection process, and we’ll mention a couple of them here.

 

 

Minimum deposit and leverage ratios

These are some of the most important aspects of a forex account for a beginner. A beginning trader will probably suffer losses, and the smaller the minimum deposit requirement, the smaller the losses will be. Due to the vast size and depth of the forex market, there is absolutely no reason to begin your trading with any amount. You can begin with $10, you can begin with $1000, the market will be able to absorb both sizes in the blink of an eye. And in addition, as you move from $10 to $1000 in your account, there is no difference in the way the market will treat you. Your orders are not noticeable, and your experience will be the same. As a result, it is always a good idea to begin with very small sums, and, naturally, with low leverage, and once you establish your success, you can add more funds to your account as well. Clearly, you should make sure that you choose a broker whose minimum deposit requirements are low and comfortable for a beginner.

 

Time in Operation

This is related to the safety of the broker. If the firm has been in operation for a long time, it is likely to be safer, because it has been scrutinized and regulated by authorities during its lifetime, and was found to be a legitimate broker. Prolonged existence is of course not an error-free guarantee against fraud and cheating, but it is an additional safety mechanism in addition to the other aspects.

 

Beginner Support

Finally, some firms are exceptionally friendly to beginners and offer many resources to help the assist in the learning process. Some of them go so far as to provide you a personal assistant just for opening an account. Since this kind of generosity can only be beneficial, a novice trader is always invited to seek brokers which offer such facilities.

 

To conclude, selection of a good broker is an important step in a trader’s careers, and it should be approached with diligence and responsibility. An incompetent broker may quickly eliminate all chance of success for you, so make sure that you devote enough energy to finding one which is real, honest, and efficient.


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Posted By pattishenky : 08 October, 2020
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In the previous article we discussed how you go about setting up mechanical forex trading systems. These automated software systems look for technical market indicators and buy or sell accordingly – sometimes without any input from a human operator. As a result, they have become controversial. After all, the idea of a computer generating money while you sleep seems a little too good to be true.     But there are several reasons that automated trading is legitimate.First, any profit you receive is because of value added work – you set up the system in an intelligent, informed way. Like any software engineer, you had to do coding, back testing, forward testing, and assume the responsibility for monitoring your program. All of that represents value.Second, by accepting the profits for your system, you also assume the risk. If you designed your system well, you will do well, but if not, you also accept the tab. This risk is another part of the value that automated systems add.Third, well-designed systems do perform a constructive role for the market, because they iron out volatility and push prices to more consistently represent value. A similar role is performed by independent, human actors, so what is wrong with having a computer do it instead?Most importantly, there is a fundamental value to automated systems that applies to the people who design them. One of the most common critiques of mechanical systems is that they take the human element out of trading. But exactly the opposite is true, because the process of building the system helps every person who does it. Think of it this way – you can’t write clear, objective orders if you haven’t thought through your own strategy clearly. Unfortunately, many people have trouble articulating their strategy when asked for it, but when setting up a mechanical system, you are forced to describe your strategy in numbers or trading orders. The result is a clearer, more thought-out understanding of the method.Other benefitsAnother related benefit comes when the trader back tests or forward tests a system. With an automated trading system, this is as easy as pushing a few buttons and applying the same orders to other market data. When the process is done, the trader has a legitimate expectation of how he will do. Compare this to subjective trading, where someone might enter the market expecting to make a huge profit overnight and be controlled by unrealistic greed. It simply isn’t possible to back test a personal strategy as easily as one might run an automated system, and so the delusion goes unchallenged.This points to a final benefit of automation – the computer executes and follows orders without an emotional connection. Even the best traders start to change their method when profits skyrocket or losses mount. In most cases, this only results in worse results.But once you set up your system to follow orders, it doesn’t know your bottom line or care about it. It will continue to execute buy and sell orders until you make it stop. Since you should have tested it before going live, the strategy will probably work out over time, even if your emotions temporarily tell you otherwise.Said simply, automated systems make trading more disciplined and consistent. Of course, they have their disadvantages too. For one thing, they never learn or adjust to new insights, but that’s your job! Even if you already use a successful system, continue to improve it and make adjustments. With effort, both you and your mechanical forex trading systems can be even more successful!

You don’t have to search far to find a list of Forex brokers that offer social trading features. For those of you that don’t know, social trading allows us to see what other traders are doing and how they are doing it. In the same way that we see what our ‘friends’ or followers’ are doing on standard social media websites, we can gain an insight into other traders’ strategies if we use social trading features. That is, we can use their expertise and copy exactly the same trades on our own account.On one hand this sounds great – with virtually no work involved other than picking the trader with the best results from a list, we can sit back and enjoy profits being added into our trading account. On the other hand, does this represent huge risks? Think about it; if we piggyback onto another trader’s account, we are totally reliant on him/her and his/her trading strategies. If we investigate their strategies and create an understanding in the execution, then perhaps this is a good deal. However, if we simply go into this blind and without any research at all, we are leaving ourselves open to emotional, strategic and unnecessary mistakes that could be made by the trader, through no fault of our own.   As this is a relatively new feature that Forex brokers offer, it is very hard to pass judgement without solid evidence but we must think about this style of trading carefully because it is NOT trading. It is copying. We are simply not responsible for making important trading decisions in this scenario. Instead, we leave this work to someone we have never met and whose results we see on a chart.Forex brokers do make it easy for us to feel confident if we chose to take part in this social trading style. Information is very accessible to us such as the ability to view thousands of traders’ accounts in terms of success rate. There is other information available but realistically, this is all that matters.Be carefulAs with anything that seems too good to be true, we must always keep our wits about us. If you chose to connect your account to another trader’s account, ensure that all the results that you have seen for the trader are taken from their live account. Thereshould never be taken from their demo account or be combined with a demo account. It is only this way that you are able to be confident your account is in good hands.You may find that traders using live accounts do not take too much risk and that they analyze the market a lot better. A combination of those two factors alone could result in minimum loss and maximum profits.When using live accounts traders who you are copying from are there to make a profit too. They will certainly not over-leverage their positions or take unnecessary risks that could put the investment capital in jeopardy.Whilst social trading is an automated feature that allows you to trade without even turning your computer on, all traders should add a degree of manual diligence to this trading style. By keeping a watchful eye over how your money is used the end result will always be decided by you i.e. if you wish to continue or scrap this style of trading.Dragan Lukic is a professional trader with years of experience with capexforextrading.com forex brokers. His advice is to research and ask questions no matter which broker you find.

There are lots of reasons why a trader might not execute their trading plan properly and not wanting to be wrong is a big one.If you have been trading for any length of time, you understand that it’s impossible to take winners 100% of the time and avoid all trading losses.For those just beginning to trade, the fact that you will lose is a lesson in itself.All data on your charts is historical which means you’re only able to assess what has happened already.Everybody is perfect in hindsight.As smart as you are you can never really know who is sitting ready to act and so a big trade or unexpected event can change everyone’s perspective of what a fair price currently is regardless of what has traded before.Then there’s the fact that the market can make you wrong for a tick whether or not the concept for a specific trade was valid or not. Until you’ve closed the trade, you cannot be certain that it will achieve your profit target.Ego In Trading Is A MistakeWe know we will be wrong at various points in our trading, then what’s the reason why we often see traders having a hard time in “letting go” of unsuccessful trades?Surely by knowing that we are all but certain to take losing trades on any given day, it should be easy to just click the mouse and exit the trade, right?Wrong.And I believe it’s not really to do with being wrong at all but all about the way in which a trader loses that leads to many of the problems they face.FACT: Trading Is Not About Being Right We have a deeply ingrained aversion to being made to feel/look like a fool. Perhaps this is down to evolution and the drive for a mate. But it’s certainly observable in many walks of life.People often revel in denigrating those who have said or done something silly or naïve. Many a comedy moment is centered on this type of thing (think Homer).At many mainstream schools, much of the learning is focused on being right or wrong as opposed to reasoning (part of the problem I believe with producing genuinely capable people at the end of education – rather than people who have learnt to pass exams).So it is with trading that not being made to feel like a fool, not having your money taken from you in a silly way and proving to yourself that you really do know what you’re doing can become a millstone around a trader’s neck.This taps into some pretty strong instincts – ones which when we’re already in a heightened state of emotion, can be extremely difficult to negate.The compounding effect of multiple experiences can lock you into negative behavior patterns until you’re really able to recognize what’s going on.Here is just a sample of situations you may be able to relate to:1. Getting Stopped Out To The Tick AgainYou don’t want to be the patsy at the table who keeps getting their stop taken out right before the market moves to target. This can lead to trading on the edge to try to exit out of the position when your price starts to get traded out.The problem with this is that there’s a seemingly invariable jump through your price and you end up missing your exit.Another observation is where a trader just keeps moving their stop until they are so committed to the trade that they refuse to take the loss at all.2. You Skip Parts Of Your Trading PlanYou take a loss because you missed an important piece of information that’s normally part of your decision making process because either you weren’t paying attention or didn’t prepare properly.You want to avert this feeling of inadequacy and acting in a stupid way and so only take high probability setups – in reality ones which you feel will definitely be winners, so when they lose you either refuse to accept the loss or feel betrayed by the market.3. You Don’t Ever Want To Miss A MoveThe market keeps acting in a certain way that it doesn’t usually do and you’re taking loser after loser because of this. You don’t want to feel like a fool when you stop trading and it reverts to its usual self so rather than sit on your hands, you keep trading and taking losers.Either this or you start trading “off plan” which could be disastrous. You start to feel like you know what’s going to happen whilst you’re in a trade, so you mess with your plan “on the fly”.4. Trading For RevengeYou take an impulse trade that ends up a losing and you know you should have followed your plan instead. Rather than trading your plan, you try to make up for it by taking further impulse trades whilst digging yourself into a deeper and deeper hole.If you can never truly be right on a trade, how can you ever really be wrong?Your Trade Outcomes Are Never WrongWe appreciate we will take losses in our trading so what does “Never be Wrong Again” actually mean?Trading is as much to do with changing your mindset and therefore behavior as it is to do with strategies, money management and everything else.Perhaps more so as everything else is dependent on how well you grasp these concepts.Being right is NOT about taking winners and you can do some real damage when you profit with poor logic. Being rewarded for bad plays will cause you to repeat the mistakes.It’s about being able to assess a situation, what is more likely to happen next and apply a strategy properly and consistently where appropriate. If your reasoning is sound and you take your trade, you have done the right thing in spite of the outcome of the individual trade.You have identified your trading edge and given it the opportunity to play out in the market.But if being right is about taking a trade and not the outcome then surely you can still be wrong?Of course but not how you think you can be wrong.Focus On The Act Of TradingThe point is that if you view it this way, your focus is on trading properly.You can never be wrong about the outcome because you know it’s uncertain.The only thing we can fully control in trading is when we trade and how we trade.The proper way of being wrong….the only way in an uncertain environment..is not doing what we know we should do.In order to give yourself the best possible chance of assessing an opportunity correctly and executing your strategy consistently there are a few simple (but uncertain – there’s no concrete right or wrong) steps you can take:You need a clear and simple enough plan of how you will trade and under what circumstancesLeaving the level of discretion to a minimumBy monitoring market conditions (for example, as simple as whether the market is trending or consolidating) you can understand when the strategy is likely to work better and therefore what you should be looking for leading up to a trade.Strip the word wrong from your trading vocabulary by following your trading plan.If you have a strategy that has a genuine edge in the market, the most important step to success is being able to execute it effectively and eliminate trading errors.These errors often stem from the strong emotions that come with being made to feel silly and can be averted by changing your mindset on what being right or wrong is all about.Change yours and never be wrong again.


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