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What broke criteria should you chose for trading with small capital?
To be successful, your broker should be:
- Allows a minimum deposit of USD50.
- Provides trading with micro lots (0.01).
- Charges no commission.
- Offers low spreads (less than 2 pips for major pairs).
Continue Reading at A Story of Making Forex Profit with Small Capital
Should you consider starting your own brokerage?
Starting your brokerage can be appealing for several reasons. It provides a way to stay involved in the trading industry, potentially offers better income predictability, and allows you to use your market knowledge to create a broker that caters to traders' needs.
Continue Reading at What You Need to Know Before Starting Your Own Brokerage
How to find out if my broker marks up the spreads?
Believe it or not, you can ask the broker directly. Some ECN/STP brokers openly state that they mark up spreads because they feel they have the right to do so.
You can also check the authenticity of spreads from an ECN/STP broker that (perhaps) covers up its spread mark-up by directly comparing the broker's spread with the actual market spread.
Continue Reading at Forex Broker Cheats and How to Anticipate Them
What are market maker brokers?
Market makers are the parties that provide liquidity and quote both the buy and sell rates. They can be individuals, brokers, banks, hedge funds, and other financial firms. Large banks in particular are the master market makers.
One simple example of the market-making practice is a foreign exchange transaction in a local bank. This is very similar to the business activity of market makers in forex trading. Let's see the illustration below.
Dolan is in need of USD currency for a trip to the USA. He carries the local currency EUR to Bank Z to be exchanged with USD. In this case, Dolan wants to buy USD and Bank Z makes the market by selling USD and buying EUR.
One month later, Dolan returns home and wants to exchange his remaining USD with EUR. He visits Bank Z again, and this time Bank Z makes the market by buying USD and selling EUR.
Here, Bank Z generates profits from the differences between the sell rate and buy rate.
Continue Reading at Are Market Maker Brokers Always Bad?
