If you are a retail currency trader or a small institutional trader, we must all trade through a non-depository currency financial institution. They occupy approximately 75% of the capitalization of the foreign exchange market. Some banks can be brokers. The remaining 25% are sole proprietorships like you and me, and small business businesses.
Brokers who prefer to be regulated hopefully attract more clients to open accounts with them. Having your fund deposited during a regulated forex broker certainly improves the safety of your fund.
If you are just starting out or exploring a career in forex trading, there are many brokerage firm options for you today. Your goal during this stage may be to check the water. you can deposit a couple of hundred or thousands of dollars. This is often a comparatively capital-trading touch. However, after you progress in your trading career, tens of thousands or perhaps many thousands or millions of dollars are large amounts of cash, your biggest concern would be the protection of your fund.
On the opposite front, some sole traders and business companies are concerned with minimizing tax expenses, preferring to open accounts with a broker domiciled in a selected country for tax purposes. they have not had any impact from the changes. So that they understand the principles of the sport and do everything possible to reduce the risks associated with runners.
First, select brokers who put their fund in a very separate account from those of their companies only. only in the event of bankruptcy would your fund have the next chance to be paid back.
At a minimum, these regulated brokers, by complying with the regulations, present their regulatory position every day and you will track them on the regulators’ websites.
Like any other traditional business, fraud and scams occur regardless of the people or institutions involved, the level and the credibility. Who would doubt that Bernard Madoff, once president of the respectable NASDAQ exchange in the US, was one of the largest individual scammers similarly as an institution in our history. Other cases, including Worldcom, Enron, etc., are samples from high-profile institutions, not to mention many other smaller cases. A private company or a corporation that installs a nice reception and a website with many flashy things and claims, investing in infrastructure such as business and administrative processing software, does not mean ‘being freed’ from possible fraud and scams.
Frauds and scams occur in many shapes and forms, starting with dishonest practices in mixing your fund with that of your company, executing your orders at your disadvantage, re-listing, negotiating ‘legally’ against your clients, manipulating the back office; on larger scales such as ‘stealing’ millions or perhaps billions of dollars of funds from investors or traders.
By saying that, it does not mean to panic or stay away from the forex market. Rather, we understand them and take the necessary steps to reduce them. Frauds and scams are always there in any market, not just the forex market.
In the following sections, describe the key factors that you should simply think about when selecting your forex broker.
+ Security of your funds:
Being a successful forex trader can be a long-term journey and a lifetime achievement for many traders. On average, it takes 5-10 years to understand the significant rewards for such a worthwhile search.
In this game, it is simply that ‘without capital there is no game’. Therefore, protecting your business capitals should be the top priority. Don’t let another ‘Bernard Madoff’ steal your money! Here are some recommended criteria for you to consider before opening a live account with a forex securities firm.
Psychology Of Trading.
The psychological aspect of trading is typically underestimated by those unaccustomed trading. The psychological problem for many traders is that the fear of losing – ironically it’s this fear that causes most traders to lose money within the long term. The fear of losing can turn up in an exceedingly number of ways:
Inevitably the trade that’s not taken are going to be the winner. Unwilling to just accept a losing trade and cut a losing position short.
Taking a profit too early to stop a winning position become a losing one.
There are variety of how to counteract the fear of losing:
Money Management. If a foothold is simply too large for your account size then you’re more likely to hold on to the losers or cut the winners short. Each trade is just one step along a awfully long journey. Strict money management rules should make sure that you never stake quite you’re comfortable with.
Ignore the cash. the higher your trading plan and your execution the more points you’ll accumulate as a present. it’s difficult to trade objectively if all you’ll be able to think about is that your last losing trade could have obtained a two week holiday or bought you the newest camcorder!