It is predicted that the cryptocurrency market will soon be one of the largest financial markets in the world. Many people around the globe have switched from traditional trading to crypto trading. They believe that crypto trading provides the chance to earn massive profits while keeping their transactions private. Many investors believe that crypto trading has more potential for profits while also keeping their identities secret. Additionally, the crypto trading transactions are much safer. Crypto CFDs are a very popular option for traders who wish to trade margin positions. Crypto CFDs are the same as CFDs for any other tradable asset. CFDs for crypto CFD trading is an instrument of trading in which traders speculate on the prices of cryptos without actually owning the cryptos. CFDs permit you to trade cryptocurrency without having to pay for the entire value of the trade. Furthermore, traders are able to invest in cryptocurrency CFDs directly without opening a crypto account.
There are many opportunities to trade crypto CFDs with no hassle. This kind of trading offers traders many advantages. It lets traders use a variety of risk-management tools, such as stop-loss or taking profits. These highly-specialized tools for trading are the most effective in terms of protection against serious losses. The tools can also improve traders’ decision-making. One more advantage of crypto CFDs trading is that it provides traders high leverage. It will enable them to trade with additional capital and earn reasonable profits even with a few minor price movements.
Another good reason why crypto CFD trading is highly recommended is that a reliable CFD broker is regulated by a well-known financial authority. This means that you are completely protected from any kind of fraud, scam, or malpractice. Even if there has been an adverse situation, you will be able to recover your money in an easy manner. CFD trading platforms are completely secured and licensed so hackers cannot get through their security to steal your funds. All these reasons make CFD trading the best and efficient way to trade crypto.
It is a great option for those who want to have high liquidity. It will provide you with more liquidity than any if you trade cryptocurrencies directly. Additionally, you don’t have to convert them into currency. If you are worried about the complexity of crypto trading, consider investing in CFDs. It is possible to profit from price changes that are beneficial to them.
The crypto CFD market can be traded by predicting the price of cryptocurrency, but not having it in your possession. It is essential to open an account with a trustworthy fx broker. You must be able to establish a strategy for trading in crypto that will help you make informed decisions, like when you should be able to enter or exit trades. It is important to note that unlike direct trading, you do not need a crypto wallet while trading crypto CFDs. Also, you can trade CFDs at any time of the night or day on numerous exchanges. The CFD market is growing rapidly and CFDs are a great way to enter the market.
The crypto market is expected to be one of the major financial markets worldwide. It is because of this that people across the world have made the switch to crypto trading. It is believed that crypto trading offers more opportunities to make money while remaining anonymous. Additionally, the crypto trading transactions are much safer. Crypto CFDs operate the same as any other CFDs financial assets. They are simply an instrument of trading in which traders make bets on the price of cryptos but do not actually own them. The best part is that you don’t have to pay for the entire amount of the trade. It is also possible to directly invest in crypto coins, without opening a cryptocurrency account.
Traders can trade crypto CFDs with no effort. This type of trading has many advantages. Firstly, it will open the doors to several risk management tools, such as stop-loss and take profit. These highly-specialized trading tools are the most effective in terms of protecting against losses that are magnificent. They also improve trader performance by allowing them to make better trade decisions. CFDs dealing in cryptos could offer traders the opportunity to trade at a high leverage. It will enable you to trade with additional capital and earn reasonable profits even when there are a few minor price movements.
Another reason crypto CFD trading is getting more popular is the fact that all major CFD brokers have been licensed. They are controlled by a respected financial regulator. They are 100% secure from fraud and scams. You will be able to retrieve all your funds even if you find yourself in a difficult situation. CFD trading platforms are completely secured and licensed so hackers are unable to penetrate them to steal your money. CFD trading is one of the most reliable and secure ways to trade in cryptocurrency.
If you want high liquidity, crypto CFDs trading might be the best choice. Trading in crypto CFDs offers an abundance of liquidity and is an excellent choice. The CFDs will offer you greater liquidity than when you trade directly with cryptocurrencies. You can also cash out your profits with just a click. CFDs don’t have to be transferred between one currency and the other and can be withdrawn in just a few minutes. If you are worried about the complexity of crypto trading, consider investing in CFDs. With such fast execution speed, traders are able to take advantage of price movements quickly and react immediately to them.
The crypto CFD market can be traded by forecasting the value of cryptocurrency, without actually holding it. It is only necessary to select a trusted crypto CFD broker in order to establish a trading account. It is essential to have a plan for trading crypto that will help you make well-informed decisions, such as when you should enter or exit trades. It is important to note that unlike direct trading, you do not need a crypto wallet in crypto CFDs trading. Also, you can trade CFDs in crypto at any time on several exchanges that are available all hours of the day. In short, CFDs make it easy to trade in the growing crypto market.
Nowadays, you will see that copy trading services have so much to offer to brokers. Although some use the ready-made solutions available in the market, others tend to prefer to develop this software on their own. However, this is not reasonable, both in terms of results and cost. Thus, it is recommended that you always opt for ready-made cloud trading positions. However, if you are confused about how to choose, here are highlighted the top five things that you can consider while opting for a copy trading platform. Read More
Reliability
This is the number one request of clients worldwide. No one wants the software to get crashed every now and then, disrupting their trading operations. It will only irritate the broker’s clients when they have to manually correct orders that were lost or corrupted due to loss of connection. If this is happening, you can’t consider the trading platform to be reliable. As a broker, you must ensure that the platform you are using has all the essential features which make it speedy to execute the transactions for your clients.
The reliability of a platform is all about the stability of the service and preventing scenarios where the service constantly disconnects. Thus, you would be required to contact the support team to restore the lost trades. Since this will directly impact your profits, such a situation must be dealt with precisely.
Accuracy
No client wishes to lose even a single penny of their profits. This is why clients are always interested in knowing how accurately the trading platform can depict the profit distribution among the traders. This point is very much important when various deposits and copying ratios are combined. Automated calculation is essential here as it can be quite difficult to calculate all of this, and that too without errors. Thus, selecting a copy trading platforms pays closer attention to the accuracy of the profit distribution.
Social Trading Platform vs Other Trading Platform
The principal rationale behind the copy trading platform remains the same for everybody. However, various variations of trading platforms are available in the market, such as PAMM, MAM and social trading. Earlier, PAMM trading accounts used to be the most popular ones, where the traders transferred all their funds and traded on their entire amount without showing their trades. PAMM account is still considered an ideal platform for traders who wish to trade a huge sum of money and know all the relevant strategies but do not want to share this knowledge with others.
However, in recent years, the trend of social trading has become quite popular. Every 3 out of 5 clients opt for social trading these days. In this method, the traders trade on their separate trading accounts with their limited funds. It’s a convenient way for many traders as they don’t have to worry about the total amount of investment or be accountable for the client’s funds while using their regular trading strategies.
Convenience
Another critical factor brokers should consider if they are looking for a ready-made copy trading platform for their clients is its user-friendliness and convenience. You need a unified client management system in place where traders and investors can interact with each other in real time. Many brokers prefer to design their own trading platform because it is difficult to find such a trading platform where everything is available in one place. However, not everyone can do it because the process of developing in-house software is too time-consuming and expensive. Keeping this in mind, brokers should search their options wisely to choose one that can offer a unified system.
Copy Trading Platform For MetaTrader
Last but not least, if you are opting for the standard trading platforms: MT4 or MT5, ensure the efficiency of its copy trading platform. Furthermore, the market changes very rapidly. The customers switched from MT4 to MT5 within a year. Thus the brokers should always have insights into various brokerage products coming into the market in the upcoming years.
Every trader knows that the forex market is one of the largest and highly popular financial markets in the entire world, where daily transactions exceed more than $5 trillion. Forex trading has become one of the best income sources for people globally. However, if you are considering getting into this profession, there are several decisions that you need to make first. One of them is choosing a reliable forex broker. When it comes to selecting a forex broker that you can use, you need to take into consideration several factors such as commissions, spreads, performance, experience and leverage. But apart from all of them, one of the most crucial aspects to bear in mind is that you choose a regulated forex broker.
Who Is A Regulated Forex Broker?
In simple words, a regulated forex broker is the one whose activities and operations are controlled and managed by some high authorities. These authorities act as the “watchdogs” for the forex market. They are known as regulators and work towards preventing fraudulent activities in the market and raising awareness among traders and investors. A regulated broker implies that they adhere to all the guidelines, policies and standards stipulated by the regulator. They are subjected to regular audits from supervisory authorities. In case any regulated broker fails to comply with the rules set by the regulator, legal action can be taken by the regulator, leading to the permanent cancellation of the license.
Why Should You Work With A Regulated Broker?
So far, we have learnt how forex regulations work, but how do they actually help the forex brokers? Here are some significant benefits of working with a regulated broker.
1. Transparency In Trading Operations
According to several forex experts, traders who seek a regulated broker tend to experience honest, fair and transparent trading operations. This is so because regulated brokers are required to serve their clients with complete honesty and fairness without manipulating the market to turn it in their favor. This is the reason traders need to check the validity of the forex broker’s registration number with the regulator so that they don’t fall prey to fraudsters. Additionally, regulated forex brokers must also submit financial reports periodically to the regulator. Failure to do so could result in the termination of their membership.
2. Safety Of The Traders’ Funds
Regulated forex brokers are also compelled by the law to never mingle their clients’ funds with their company’s funds. It means that the forex broker must have a separate account to keep the traders’ funds. The broker cannot use their funds to finance their own needs. Additionally, if, in any case, the broker goes bankrupt, they cannot use the client’s money to pay their creditors. The money should only be utilized to pay out the clients. In this manner, the trader’s money always remains safe no matter what happens to the broker.
3. Recourse In Case Of A Dispute
In case of an issue, fly-by-night forex brokers are difficult to come into contact with. However, regulators ensure that the brokers have a customer support system in place. Every regulated forex broker must have a customer support desk, a valid phone number, an email ID and a representative to assist the clients. Furthermore, when you work with a regulated broker, any complaint you file against them will certainly be easier to solve. Therefore, when you choose a regulated broker, you get proper assistance from the forex brokers. Regulators can also intervene if the traders think they have been mistreated by any regulated forex broker, which is not the case with an unregulated broker.
4. Protection From Fraud And Scam
Regulated and licensed forex brokers do not get involved in any trading malpractices that can affect the traders negatively in the market. Illegal trading and financial practices such as tampering with the trading platforms, manipulating the markets and prices, opening positions without the traders’ consent and withholding their funds without any valid explanation are strictly prohibited by the regulators. Therefore, any forex broker involved in such illegal activity attracts severe penalties and even a permanent ban from the forex industry for themselves. Thus, it is recommended that traders should always work with a regulated broker to protect themselves from dishonest trading practices.
Conclusion
To conclude, one can say that regulation has a vital role to play in ensuring that forex brokers abide by all the standards and do not engage in any illegal practices. As such, traders must always work with a regulated broker to protect their interests.
Among all the investment markets, the forex market showcases extreme liquidity. Accordingly, many traders from across the globe choose the forex market to invest their funds. Therefore, it is also suitable to say that when a forex trader selects a liquidity provider, they must consider the liquidity aspect.
As told before, liquidity is highly essential because it allows forex traders to exchange, buy, and sell different forex currencies without significant changes in the price. Furthermore, it is also imperative to understand the ideal meaning of liquidity providers. Read hycm review and get some ideas about forex trading. Read More
Who Are Liquidity Providers?
Liquidity providers are the institutions or market makers who work with both sides of the transaction. The significant liquidity providers are central banks, investment banks, foreign investments, forex brokers, wealthy individuals, and more. Among all, Tier 1 liquidity providers are considered the apex and are preferred by many forex traders from across the globe.
The Importance Of Liquidity Providers
It is the liquidity providers that heavily drive the forex market. Hence, it is noteworthy that they are imperative and play a critical role in the entire forex transaction. Here are some other points that make them more significant. Let us take a look:
Ideal Prices
Liquidity providers ease the comprehensive transaction from both sides. Furthermore, they are well known for offering the best prices for your trade. Accordingly, with an ideal liquidity provider, forex traders can access the excellent market price for their trade. Thus, their profits will also enhance significantly.
Trade Execution
Forex trading is all about trading effectively and efficiently. By doing so, the traders make way for more profits and other lucrative deals. Additionally, the trading platforms provided by the liquidity providers are excellent; hence, as a result, the overall trading speed enhances significantly.
Furthermore, it is suggested that the trader looks at the liquidity provider’s order book. If the order book shows large orders, it indicates that the liquidity provider is famous and there are many buyers. Accordingly, the trade will be executed ideally and promptly.
Client Service
Generally, forex traders invest a significant share of money in the forex market. Therefore, the presence of a trustworthy liquidity provider is highly essential. A great liquidity provider ordinarily accounts for the best client services that ultimately make them stand out from the crowd. Executive support is available during the concerns; hence, the trading experience is ideally enhanced.
Rules And Regulations
The significant feature of liquidity providers is that they generally have great rules and regulations. Therefore, the chances of fraud and other activities are significantly less. Furthermore, the liquidity providers are well regulated by a financial authority. Thus, the finances of the trader are extremely safe and secure with the liquidity provider.
“If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.” – Bill Lipschutz
Hence, it is pretty clear from the aforementioned tips that liquidity providers are highly significant for the smooth functioning of the forex market. Additionally, they allow the traders to make way for more lucrative currency pairs. Hence, as a result, the overall financial profit of the traders enhance considerably.
Benefits Of Liquidity Providers
The liquidity providers offer several benefits to traders. Here are some advantages that the traders can get direct access to via qualitative liquidity providers:
Excellent trade execution speed.
Fewer spreads
The ideal pricing structure and more
The Bottom Line
Therefore, in a nutshell, it is fitting to mention that liquidity providers are the most prominent aspect of forex trading. They allow forex traders to make way for more profits and diversify their investment portfolios. Additionally, they keep up with the demands of their clients; thus, the traders get several benefits under one roof. It is suggested that forex traders must select the ideal liquidity provider for the best trading experience.
Forex trading is highly risky; therefore, forex traders take every possible step to mitigate the potential loss. One such method followed by several forex traders across the globe is hedging.
What Is Hedging?
In simple terms, hedging refers to the method via which forex traders can safeguard themselves from a potential financial loss. Typically, the concept is pretty similar to insurance. For example, an individual buys car insurance to protect themselves from future losses that may arise from any issue. The same happens in forex trading. Read More
From the forex standpoint, it can be said that hedging is insurance against the trades. Hence, if any unexpected event happens, the forex traders get assured that their amount will be covered via hedging. In general, a forex trader can ideally get a hedge against a specific foreign currency by using two separate currency pairs.
Generally, it is suggested that forex traders implement hedging as a part of their trading plan because it helps them safeguard against the massive financial loss that may or may not happen in the future. The professionals suggest that forex traders must have a clear understanding of the hedging concept to protect them from significant monetary loss. Read lqdfx review and get some ideas about forex trading.
Understanding Simple Forex Hedging
A simple forex hedge allows forex traders to protect themselves against financial loss. In simple forex hedging, the traders can effectively trade in the opposite direction of the initial trade placed. By doing so, the forex traders need not to close their initial trade. Hence, they get a cover against the potential financial loss. At the same moment, the forex trader can also trade to sell the pair.
The comprehensive risk is extensively reduced because the traders don’t invest more capital in the market. Therefore, as a result, forex traders can protect their existing capital via simple forex hedging.
Many forex traders claim they will implement different risk management strategies but don’t focus much on hedging. However, the forex experts heavily suggest that forex traders must lay ample focus on hedging as it is the best and top-rated risk management method to safeguard yourself from the ideal financial loss.
Generally, forex traders prefer to close the initial trade. Once the initial trade is closed, they re-enter the market at an updated price. However, the primary feature of implementing hedging is that the traders can enjoy their initial trade as no need arises to close it. Therefore, the risk is reduced, and the traders can ideally benefit from their initial trade without closing it.
Can Hedging Be Undone?
Yes, the hedging can be undone. For example, if the forex traders think that they are in favor of their initial trade, they effectively undo the hedging by opting for a stop-loss. Other than the stop-loss, they can close the trade.
“All the math you need in the stock market you get in the fourth grade.” – Peter Lynch
The forex market consists of several options via which a forex trader can undo a hedge. However, the methods are highly complicated. Furthermore, several forex brokers don’t allow forex traders to hedge directly; thus, the traders need to follow different approaches.
Why Hedge?
The primary reason to go ahead with hedging is to reduce the comprehensive risks. When the risk gets limited, the traders can efficiently trade in the forex market. Therefore, the approach is best for traders who are new to the trading world.
The Bottom Line
Therefore, in a nutshell, it is fitting to mention that the forex trader’s risk cannot be mitigated completely; however, it can be managed by ideally implementing hedging. Hedging allows forex traders to make a protected market move and make way for more profitable deals and returns in the future.
Forex trading is risky as the market is highly volatile and showcases sudden changes. The immediate changes affect the overall profitability and earning capacity of the traders across the globe. Therefore, the forex professionals suggest that the traders must develop a trading strategy for mitigating the risk. Read lmfx review for finalized trading platform. Read More
It is significant for both experienced and inexperienced traders to follow an ideal trading strategy. Once the traders follow the suitable trading technique, it allows traders to increase their profits and earning capacity. Additionally, the trading experience also enhances significantly.
Understanding Forex Trading Strategy
A forex trading strategy is a set of rules that allow forex traders to enter and exit the trade systematically. The strategy involves the manner in which the traders must trade in specific forex currency pairs. Generally, forex traders can find both simple and complex trading techniques. It depends upon the trader which particular trading technique he selects.
The forex experts specifically recommend that the forex traders follow a specific trading technique irrespective of the trading pattern and style. For example, the forex trader who follows technical analysis finds it pretty easier to enter and exit the market. Therefore, it is noteworthy to mention that the forex trading techniques simplify the overall trading experience, and the traders can quickly diversify their investment portfolio.
Beginners And The Forex Trading Strategies
As mentioned before, the trading strategies allow forex traders to trade ideally. Therefore, the beginners who have just entered the market must follow some basic techniques that allow them to trade more lucratively:
Price Action Trading
The price action trading technique allows forex traders to make informed decisions depending on the market price movements. This technique does not include the usage of technical indicators. The price action trading technique allows the traders to use several actions like simple techniques, while on the other hand, the traders can also use progressive candlestick patterns.
As the name suggests, the trend trading strategy identifies different trading trends. Therefore, the traders can consider the financial instruments that move in one specific direction. By following the trend, forex traders can place their orders. When the prices increase, the traders find an uptrend; on the other hand, when the prices decline downtrend occurs.
Position Trading
Position trading is all about aiming high and making way for extensive profits. The traders generally ignore the short-term market movements and earn long-term profits. Basically, the forex traders aiming to stay in the market for the long term must go ahead with position trading.
Day Trading
Day trading is about trading a specific forex currency or different forex currencies for a single day. In other words, the traders begin afresh the next day and with different trading currencies.
“Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets. Michael Carr”
Selecting The Ideal Trading Technique
Generally, forex traders are left with several trading techniques. However, it is essential to select the one that best suits them. The traders can use demo accounts to understand better and experiment with the forex market. Furthermore, the market evolves every second. Thus, it is suggested that the traders should also grow their trading techniques and prefer not to stick to a particular trading technique.
For beginners, it is suggested that they must stay with simple techniques. It is recommended to stay away from complex techniques as they require an extreme understanding of the forex market.
The Bottom Line
Therefore, in a nutshell, it is fitting to mention that beginners who have just entered the forex market must go ahead with selecting the ideal trading technique that best matches their needs and requirements. Furthermore, once the right technique is selected, the traders can quickly diversify their investment portfolio and earn extensive profits.
Are you interested in cryptocurrency? Do you want to know more about the tools that can help you make the best trades possible? You should definitely check out cryptocurrency trading bots. It sounds intriguing, right? It’s not surprising that bots are being used in every aspect of life, including cryptocurrency trading. Let’s learn more about these bots, and discuss the important aspects.
The cryptocurrency trading bots (or cryptocurrency) are computer programs that enable you to trade cryptocurrencies in a timely manner. They are designed to make their users profit and give them an edge in the long-term. The bots monitor market conditions carefully and execute trades based on pre-defined algorithms. You are free to define your own parameters which will allow you to execute different trades. This software can respond almost 1000 times faster than a human, so it is extremely efficient in terms of operational efficiency. Read More
There are many different types of crypto trading bots. There are trend-following, arbitrage, and scalping types. According to bitcoin.com, arbitrage bots are the most popular.
If you are primarily interested in trends while you build your strategies, trend bots can be a great help. These bots can identify trends and determine when it is profitable to sell or buy something.
Scalping programs allow their users to be more efficient in sideways markets. Scalpers, as these users are commonly called, can buy something at a lower price and then resell it at an even higher price. Arbitrage bots are designed to make profits by analyzing prices across multiple exchanges and taking advantage price discrepancies.
If you have decided to use cryptocurrency trading bots in practice, you need to consider which one is best suited to your business. Remember that every bot has different hardware and software requirements. Before you make a decision, consider all aspects.
Once all formalities are completed, it’s time to start the installation process. You can actually get a trading robot by using any one of the three options below.
It’s available for free via an open-source platform
You can get a paid version if you are a licensed bot.
You must have sufficient technical knowledge and skills to create a trading bot.
You probably have an opinion on crypto trading bots after reading all of the information. Let’s review all their advantages over humans.
Speed: Bots are 100 times faster than humans, it is clear
Stamina: Bots can work 24/7 without breaks
Capacity: Bots can process gigabytes per second
100% objectivity: Bots don’t have any emotions. They do exactly what is required.
Experts argue that subjective thinking is necessary in some cases. This way humans can outperform bots. These are just individual cases. Bots offer so many incredible opportunities that you will be better off if you give priority to them.
You can see that cryptocurrency trading bots are extremely useful and multifunctional. This allows you to make a lot of money. It is important to read the bot’s details in order to fully enjoy them. This will ensure that you have the best chance of maximizing your potential to benefit from this innovative technology.
The most exciting experience you can have is currency trading. Forex trading is like a roller coaster ride with many twists and turns to keep you on your feet. You will be able to enjoy the ride as you are thrown side-to-side at a steady speed. There will be a few trades, and you may make some profits. You will soon see a rise in speed and be excited about new opportunities. You scream when the coaster plunges down. It was all perfect, but the currency that you purchased is losing value.
The reality soon sets in: your chosen trading platform failed you. You are now in dire need of a Forex broker to help you get out of this mess. There are many similar stories in the Forex market, according to research. Do you have the knowledge and skills to avoid the pitfalls of Forex trading at the most advanced levels?
There are many types of Forex brokers. There are many brokers who will promise you heaven, while others may promise you hell. They are not to be blamed; they will take your money and tell you everything you want. What is the difference between the best and the rest?
You should always ask for proof of actual results. A good online Forex broker will have a portfolio that highlights his past performance. He will be happy to share this with you. You can learn everything you need from his past work and testimonials from clients. The best brokers have the most up-to-date technology available to assist their clients. They will offer you a free trial, and perhaps some training.
Top brokers understand that helping you make more money will result in them being paid more. They will do everything possible to make sure you succeed. They will help you navigate the difficult learning curve and recommend the best course of action. To make profitable trades, you will need to know how to balance potential profits and the risk.
Before you invest in a currency, it is a good idea to invest in a broker. A good Forex broker online will ease your worries about your investments. The broker will not pressure you into performing, as that responsibility is’sold to’ you. Then you can focus on Forex trading and become a leading Forex trader.
Tracking the news around the world can help you improve your Forex trades. To help you with this, Mr. Closson created a website. Click here for more information about forex trading for beginners and online Forex brokers, automated Forex trading, how to make the most of every trade, and many other topics. Register for the weekly newsletter from Mr. Closson and you will receive a free ebook with Forex trading strategies.
If you are familiar with the forex market, it is one of the most lucrative online money-making opportunities. You can learn about forex trading with a free forex demo account. Many online forex brokers offer a form of real-time online currency trading platform that allows traders to trade forex from the comfort of their own homes 24 hours a days. Many brokers offer a free forex demo account and a practice trading platform to give you a taste of their currency trading platform. These forex demo accounts and practice trading systems are free to help you learn more about forex trading.
A forex demo account, or practice currency trading platform, usually provides you with a sum of money to begin forex trading. This money can be used to get real-time quotes and charts from the actual market. A forex demo account is the best and most cost-effective way to learn how to trade forex. A forex demo account is used to practice currency trading. Read More
First, you can test the trading interface or platform offered by forex brokers. The software can be run to test and determine if it meets your requirements. It is possible to determine if the software is easy to use, user-friendly, and provides the tools necessary to trade forex successfully. Before you commit any money to forex trading, you can test out a variety of currency trading platforms.
You can also learn to trade forex using the provided “practice money”. Learn how to open forex positions, monitor your risk and how much money you can make with short or long positions risk-free with the practice money. This allows you to fully understand the trading process, including stop loss limits and profit calls. It also explains how profits are made. To improve your forex trading skills, you can also learn to read charts and use technical analysis tools. You can create your own strategies and trading signals and then test them using the practice money.
These currency trading systems may allow you not only to trade forex with various currency pairs but also let you trade stocks, financial indexes and commodities. You can also learn to trade other asset types using the forex demo account.
Forex trading is a new field. I recommend that you open a forex demo account before investing any money. A demo account was used by the author to learn how to trade forex. The demo account is used to test his signal prediction before he makes any real money. He has had success with the strategy.
For someone new to the forex industry, it is vital to understand that the forex market is a competitive marketplace as there are thousands of brokers trying to attract clients by giving claims they might or might not be able to fulfill. But here comes the most common question: Are all brokers equal? Read More
Well, absolutely! Every broker uses a different execution model. Let’s discuss each of these execution models in detail and learn why it is important to deal with true ecn brokers.
Market Makers
A widely used broker that you see in the markets is a market maker. They focus on retail traders and take the opposite side of the trades. Thus, when a trader chooses to deal with a market maker, he/she are not competing with other traders or participants; you are actually trading against the forex broker.
In addition to making money by making their clients lose money, market makers also charge huge mark-ups on spreads for their clients. Generally, their spreads are ten times more than spreads offered by other brokers in the forex market. Although they don’t charge a commission, the spread markup is enough to make it the most costly alternate to trade.
Another remarkable feature of market makers is that they execute all their trades via a dealing desk. Furthermore, there have been instances when market makers use unethical tactics to keep an upper hand over the clients.
Straight Through Processing (STP) Brokers
STP brokers never take a side opposite to your trades. Furthermore, the trades are straight away passed to the forex market. Thus, when a trader deals with an STP broker, he/she trades against institutional participants in the forex market. Unlike market makers, STP brokers and their clients have no conflict of interest. However, they do mark up the spreads, but it is much smaller than a market maker.
Another benefit of STP brokers is that their accounts are commission-free. The traders who are frustrated by fixed commissions charged by their current brokers can indeed benefit from STP brokers.
Overall, the STP execution model is quite satisfactory. It is quite cheaper when compared with the market maker model, and there exists no conflict of interest between the broker and trader. Various ECN brokers also provide traders with STP accounts for traders who can’t afford high commissions.
True ECN Brokers
True ECN forex broker is the best trade execution model for professional forex traders in the forex market. Typically, ECN refers to Electronic Communication Network. Although this particular model was initially designed to cater to the equity market, it has made a significant place for itself in the forex market in the recent years. The ECN broker is quite similar to the STP broker in the following two ways:
ECN brokers don’t take the other side of the trades.
There arises no conflict of interest when the trader deals with an ECN broker.
So, what makes the two different from each other? Of course, the price! True ECN brokers never mark up the spreads at any cost. If you find any broker claiming to be a true ECN broker marking up the spreads, it’s a complete red flag! When you deal with a true ECN forex broker, you tend to take advantage of the best available price in the forex market.
ECN brokers do not mark up the spreads; therefore, they charge commissions and fees. But even if you add their commission and spread together, you will end up paying much less than what you would pay to a market maker or an STP broker. Thus, the ECN execution model is one of the most cost-effective models for traders.
ECN brokers are especially the ideal option for automated forex traders because every point counts to your trading success if you trade big or run an automated system.
Conclusion
Out of the three models mentioned above, ECN is considered the best because of its effective pricing and lowest commission. However, it is vital to choose a “true” ECN broker as many brokers in the market claim to follow the ECN trading model, but in reality, they are market makers. The above discussion clearly explains how you can differentiate between the three and not fall prey to scam brokers claiming to be something they are not.
