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Wednesday, 11 July 2012

Tips For Trading Forex Micro Lots With Different Brokers

If you have been trying to make profits trading Forex you will have been researching the best broker online. You will have found many brokers offering you a live account starting with as little as 1 USD. Others will offer you a live trading account with 100, 200 or 500 USD. But can you make money trading micro lots with these brokers?

You need to choose your broker wisely. You need to know which broker will honor your trades without asking for re-quotes, fixing the prices, apart from indulging in various nefarious activities leading to you losing your money deposited with them.

You need to know the tricks brokers play on clients just to make a fast buck in the guise of "teaching" you Forex trading.

Most brokers hedge their trades against you. They actually trade against you in the anticipation of you making losing trades. How, then can their intentions be trusted? If you lose, they hedged trades will ensure that they don't lose money.

By the same logic, if you make winning trades they will lose money. Can they be trusted not to fix all your winning trades? These brokers are the Dealing Desk brokers.

A lot of brokers profess to not having a dealing desk 90 percent of the time, but believe me the dealing desk is there all the time. STP or straight through brokers are another lot to watch out for. If they have a STP system why not just say that they are ECN brokers?

ECN is Electronic Currency Network. This is the network where major banks and financial institutions all over the work trade foreign exchange. Clients are directly connected to this network and the broker will charge a commission to trade. They have no control over the trades so fixing trades or hedging against the traders is out of the question. These are the true STP brokers but then again not all brokers who profess to be ECN really are. There are ways to find out the truth.

An ECN broker will not have to say they are STP brokers. They are just playing around with words.

ECN accounts are expensive to open and may begin with USD 2000. That is why it is not possible to make profits with a 1 USD or 500 USD account. Brokers offering these accounts cannot possibly offer ECN accounts and they are thus free to manipulate trades.

All of them will argue but experience has taught me better.

See also: www.ewriterz.com, professional Forex Money Manager to manage your personal ECN Forex Account for you.

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