Online Forex Brokers - is your Broker your Friend or your Enemy?
I read a lot about the above subject and most traders don't understand the role the online forex broker performs.
So, is an online forex your friend or your enemy?
The answer is:
Neither. If you know how to use a broker correctly, all they do is simply transact orders on your behalf and that's it.
Brokers don't hunt stops
The thought that brokers go around hunting stops and trying to "get" their clients is not true.
This myth comes from day traders who cant understand why they get stopped out so often and lose, so they blame their broker.
What they should really look at is:
That their systems are flawed and the real enemy (if it can be called that) is price volatility.
Volatility is only the enemy though if you let it be.
The fact is though that trading in short time frames with close stops is a great way to lose your money.
That's the traders fault and they need to deal with volatility.
If you jump in front of a speeding car you will get run over.
That's not the cars fault, its yours.
That's why you never see a long term day trading track record with a profit and a great excuse is blame the broker not the logic of day trading!
I was a broker for 10 years and we loved day traders, they would lose their money with no help from us and give us a great profit.
We didn't need to help them lose they did it all on their own.
Think about this simple fact:
In a market that trades trillions of dollars a day short term moves are random and no one (apart from a central bank maybe) can push prices where they want them.
All you need from a broker is a tight spread and that's it and there are plenty of brokers who will give you that.
Then its down to you to cope with market conditions.
Brokers that can harm you.
Are the ones that offer advice to help you trade.
Well, if they were so good at trading they would be traders not brokers!
The fact is your broker should simply transact your trades and the rest is down to our trading methodology.
An online forex broker then is neither a friend or an enemy there simply there to transact orders.
Get one with low transaction costs don't take advice and then you can set your trading plan in motion.
It really is that simple.
Related Tags: day trading, forex, online forex trading, forex strategy, online forex brokers, forex trading plan
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