Why is a Good Broker Essential?
- Date: 2008-10-13 - Word Count: 540
Share This!
It is hard to define good and bad, especially when they are terms slapped on to something as subjective as a brokerage service. A broker serves a few primary functions in the trading cycle. The brokerage takes orders from sellers and buyers and matches them. The broker also provides the most recent prices and most brokers provide a charting service as well. These services are not provided for free, the broker takes a commission from you each time you trade. This charge is called the pip spread. What that works is that when you enter a trade, you are automatically in the red. This spread varies from broker to broker but on the whole as a market, pip spreads for trading the majors are very low as compared to trading exotic currencies. A good broker can then be define as a broker who provides the basic services and keep the spreads low and fixed. The issue about floating spreads is that there are times when the spreads can go to atrocious levels and that means if you place your stop loss too low, there is a high possibility that you get kicked out of a trade through no fault of yours or because of any market movements. The good thing about having fixed spreads is that you can work the spreads into your trading plan. That gives you control of how you want to direct the trade. The reason why having a good broker is essential to your profits is that; you want to have reliability and stability when you trade. The last thing you need is a brokerage that might go bust, or not pay you or worse take your money and run! I have had experience with brokers who refused to pay out my profits especially if they were large good runs and these brokers even made it such that it seemed that it was a technical error so they were not liable to pay! As you can imagine, I quickly closed my account and switched services. The crazy thing was that the broker refused to give me MY money! After a few phone calls and a couple of weeks later I finally managed to resolve that ugly spat and recovered my funds. Reliability and stability are absolutely essential for traders to have especially when we are faced with an ever changing market. With market situations as such, the last thing you need is for your broker to pull a fast one on you. For example when you are in the midst of a trade and suddenly the trade window hangs. It might be a technical issue you think, so you log back on immediately. To your surprise you realize that your trade has been canceled and that the money you placed into the trade was lost! This is something that you don't need, so you try to contact the broker, but you emails never get answered and your calls fall on deaf ears. At this point in time the only thing you can do is to switch brokers. This will affect your trading and throw a wrench into your profits. Choose a good broker at the onset and you will fair better in the long run.
Related Tags: retirement, currency trading, forex trading, investments, forex, money management, trading plan
Dr. Joshua Geralds is a successful investment specialist with over twenty years experience increasing the income of people world wide. For a limited time get his free Money Management to a Million Dollars e-course here: http://www.pipsalot.com
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- Internet Based Forex Buying And Selling Class
By selecting to enrol in an online forex trading class, you are placing down a flag that you are tak - Fx Instruction Classes
Getting your self efficiently into the forex trading market, without taking undue dangers, can appea - Automatic Fx Trading
Intelligent Forex trading is performed by means of custom software applications that allow for non-s - Fibonacci Technical Analysis Overview
There is a unique ratio that could be used to describe the dimensions of just about everything from - Can A Forex Broker Help You Change Your Fortune?
Forex market is a volatile market and you should expect loses along with the profits. This very natu - Is It Important To Know About Forex Before Finding Forex Broker?
If you are planning to invest your money in the forex market, then you need to understand the rules - Managed Fx - Expert Managed Forex Service Will Make Easy Profits For You
Managed FX. Know what you need to easily start making profit in your forex trading account todayDo y - Fap Turbo Review - Facts About The Fap Turbo Expert Adviser!
FAP Turbo, despite being one of the older automated Forex trading systems, has managed to remain the - Forex Autopilot System - The Best Way To Use This Forex Software!
The Forex Autopilot System is an automated Forex trading program which will allow you to trade in th - Is Forex Trading Really That Risky?
You have most likely heard or maybe even experienced the risks involved in forex trading. It is not
Most viewed articles in this category:
- The Shocking Truth About the Forex Trading Industry!
You won't have to look far on the internet to find an endless barrage of web sites promoting the gla - Forex Trading - Money Management Secret (part 2)
Adjusting your trade size on a fixed percentage isn't a good idea. That we established in part 1. No - Trading System Possibilities
So many people continue to discuss the use of common technical indicators in trading systems, withou - A Beginner's Guide to Currency Trading
I'm sure that you must have heard of currency trading. But do you really understand what it is all a - Learn Forex Trading Online - An Introduction to Fundamental Analysis
It is often said that information is the key to successful Forex trading but, while accurate and up- - Forex Trading is NOT Just for the Pros
I had a discussion recently with one of my newsletter subscribers. He brought up the topic of forex - How Indicators and Patterns Point the Way to Forex Profits
If you have done even beginning research into trading, technical indicators and charting will become - Forex Trading from Home
Forex is one area of work at home opportunities that seems to be growing a great deal. People essen - Forex Advisory Services
Forex advisory services provide personalized consulting, currency forecasts and advice for corporati - Forex Currency Trading Systems
The forex currency trading system is the system, which lets the forex traders buy one currency and s