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Forex Broker Selection Criteria For Retail Traders

Trade using the Metaquotes MT4 Platform with no trading restrictions and lightning fast execution. Brokers are are in business to make money. Forex traders want to trade profitably and the vast majority of forex traders lose money. This is a real problem because to some extent these are competing goals. Brokers are rightfully concerned about how many accounts they sign up and how many trades are made by their clients each month and how much money they have in customer assets. Brokers are concerned with their profit, not traders profit, that’s it and nothing else.

What is the “Base” currency and what is the “Quote” Currency and the relationship between them

Like you may already know, a Forex pair is composed of two currencies. The first currency in the pair is called “Base” and the second one is called “Quote” or “Counter” currency. For example, in the pair EUR/USD, the Euro is the Base currency and US Dollar is the Quote currency. The Quote currency is used as reference to give us the relative value of the Base currency.

Economic Indicators

You've probably heard the words 'economic indicators' mentioned often in the news, but what are they and why are important to us as Forex traders? Simply put, an economic indicator is any economic statistic, such as GDP, inflation rate or even unemployment that is released by any particular country. They give us as traders & investors, the ability to judge how well economies are doing and how well they might do in the future.

Ways of Entering the Market

We talked about the mechanics behind a Forex trade and today we are going to find out how to actually enter the market. You can do this in multiple ways, the easiest being a market order. This means we enter a trade at market price (current price), by using our platform’s “Buy” or “Sell” button. This type of order will be executed within seconds, depending on your broker’s execution speed and your internet connection. The next way of entering the market is by using a Buy Stop or a Sell Stop order.

The different currencies traded on the Forex market

The Forex market includes many official currencies that are used all over the world. However there are only a handful of currencies that are traded in large quantities, actively on a day to day basis. The biggest of these being the United States Dollar (USD), mainly due to the sheer size and strength of its economy. The mostly commonly traded currencies are those that come from established, well developed countries. Who are actively involved in international banking and commerce all over the globe. The most frequently traded currencies are:


What is Leveraging?

Leveraging is a concept that applies to both investors and companies. It allows a trader to borrow money from a Forex broker, and use that money to specifically trade in the Forex markets. By taking advantage of this concept, a trader can invest a small amount of capital in a relatively large value contract. Therefore minimising their own capital risk. You will find throughout your Forex journey that many Forex brokerage firms offer a number of various leverage options to choose from. Allowing a trader to control their risk levels as well as profit capabilities.

Technical analysis - Types of charts

Price is represented on our screens in three main ways: a line chart, a bar chart and our favorite, a candlestick chart. Next we are going to talk about the characteristics of each one and what information they can provide us. The simplest chart is the line chart shown below. It only takes into consideration the closing price and draws a line between the closing prices of each period. Other than that, not a lot of information is displayed by the line chart and that’s why it is not widely used.


Economic Theories and Models

Within the Forex market there are a great number of economic theories and models that can be applied to certain currencies. Developed through academic research, these theories are not always directly applicable to day-to-day trading, however they can help traders understand the overarching ideas behind Forex economics. The most common economic theories and models revolve around the idea of parity conditions. A parity condition is simply an economic explanation of when a particular currency should be exchanged at a certain price, based on factors such as interest rates or inflation.