subject: Learn How To Choose A Forex Broker [print this page] With so much loss in the stock market in the past several years, more people than ever are looking into trading in the foreign exchange (forex) market. They share a lot in common, including the the fact that a broker is needed to help you buy and sell. So one of the first things you will need to do is learn how to choose a forex broker.
Unlike the stock market, where you have tens of thousands of possibilities to invest in, the forex trades in international currency. In fact, it mainly deals with just 14 currencies. Each trade puts one up against another. There is a very limited number of possible trades. This gives many people the impression that it is easy to be successful in the forex market.
That is the kind of thinking that has bankrupted many traders. It is also the kind of thinking that unscrupulous brokers take advantage of.
You see, forex brokers, just as stock or commodity brokers, get paid from you on every trade, whether you make money or lose money. Unfortunately there are brokers that encourage their clients to make trades when they should not be trading.
In your search for a broker, as you peruse their brochures or look at their websites, or speak to candidates over the telephone, what is the message they are sending? Do they appear to be leading people to think that chances are good that someone with no experience and limited funds will soon be experiencing large gains? If so, run, do not walk away.
Or do they let you know that the foreign exchange market is a zero sum game; meaning you can only make money if the person you traded with loses money? Do they tell you the system is weighted heavily in favor of big banks and the only cash you should put in forex is money you can afford to lose? If you know how to choose a forex broker, that is the kind you want.
