Forex Broker
When you have just ventured into foreign exchange currencies market, the role of a foreign exchange broker is of immense importance. A friendly and trust worthy forex broker will always supply the best news/informations available to him/her. A broker not only helps you to trade effectively but also suggests which currencies to trade in and when. If you are a new comer in this arena you can ask your broker a great deal of queries and get positive guidelines and help too.
In the beginning of your career in this segment, a good and honest foreign exchange broker may be described as your eyes through whom you look at the market. Since forex brokers depend heavily on borrowing from Banking Institutions, try to judge the quality and goodwill of the firm/organization a forex broker is connected to. Although, a broking firm will suggest best possible trading opportunities but it is you who has to take the final decision about whether to trade or not based on those suggestions.
Essentials And Basics Of A Foreign Exchange Broker
- Registration : It is absolutely essential that your foreign exchange broker or broker firm must be a registered one, signed up as participant of a Bank. Registration is absolutely essential with 'Future Commission Merchant'(FCM) for approval or solicitation of orders and also for future distribution with agreement markets. You can demand the Registration Number of an Authorised forex broking firm. Judge and if required, consult with the other clients of that broker to know about their competence in this profession.
- On Call Broker : The broker must be aware that trading in forex is a 'round the clock' job and he or she must be available to you 'round the clock'.
- Experience Of The Broker : It is the experience of the broker that counts and goes a long way to attain success. Seek your broker's viewpoint regarding present scopes in the financial market and evaluate his opinion. This will enable you to know his/her knowledge and competence in the market.
- Cost Of The Broker : The price you pay to the broker for his/her services and guidance must be reasonable and justified as far as the trend in the market is concerned. Of course, vastly experienced and popular brokers deserve better brokerage. It is always better to select a couple of brokers go through their qualifications/experiences and check their past performance history before finally picking up one.
- When you are just a beginner and have stepped into the market with a dream of success, a lot depends on the broker. You must be 100 per cent confident that the price you are ready to pay to the broker is really his/her worth. It's best to choose a broker who is associated with a reputed forex company and is quite worthy to the reputation of that company. If necessary, consult with some other clients of that broker and seek their views on the ability and knowledge of the broker.
Selecting a broker is not enough, selecting a suitable 'trading plan is equally important too :-
Forex broking firms are equipped with several 'trading plans' called in the trading market as 'trading system'. Pick the plan you are sure about and which is likely to pay you handsomely in the long run. Never think of copying other successful trader's 'plans' blindly. Do always remember, a plan working superbly for somebody else may prove to be really bad for you.
There is a distinction between a 'trading plan' and a 'trading system'. A 'trading system' is just a part of the trading plan and defines how a trader should enter and exit a trade. Whereas 'trading plan' includes collection of news, analysis, calculation, goal, risk management and finally execution.
It is because every plan has some secret dos and donts and right timings based on market view, risk tolerance, unique analysis of a situation and experience. All of us live in different situations in life and our points of view vary widely. If a plan is followed blindly, you might fall short of knowing its dos and donts which may turn out to be very fatal for hard earned money.
Trading is an art and based on following certain predetermined principles. To do this, what is most important is sticking to those predetermined principles and never violating them. A trader of high self discipline can only do this. To become consistently successful and to exploit the opportunities, one has to take up the path of disciplined traders. Forex trading is an area of profession where discipline plays a crucial role irrespective of the trader being a beginner or a professional. It is very difficult to maintain a track of uniform profit without discipline.
Below are discussed a set of some essential rules to cultivate self discipline :-
Goal or Target :- A man without a goal is like a boat without a ladder. It is essential to set your goal first based on the informations/suggestions supplied by your broker. One has to find out which suggestion is most likely to result in maximum profit with minimum risk. Once the goal is set your task is half done. Remember, a disciplined trader always sticks to his/her goal. Goal should always be realistic - means it can be achieved by an average person.
Actions :- Second most important task is to chalk out your plan and strategy to achieve that goal. Strategy and timing to enter the market, should be based on logic, experience and accurate calculation. Brokers always supply the real time news and tips but the final decision always rests with the trader. If your goal is set to a level of moderate profit but lesser risks then 'trading plans' should also match that goal.
Traders who are seasoned to bear 'high risk' for 'highest profit' prepare their trading plans likewise. For beginners it is always advisable not get carried away with greed for more as this makes you vulnerable to disastrous consequences. If the scope of profit is a reasonable percentage of investment, say 20 - 25 percent and 'risk level' is very low then it is always wiser to go in for that goal.
Get Rid of Negative thoughts & Emotions :- Once you have set your goal and adopted a suitable 'trading plan', the next most important thing is to monitor your progress on a regular basis. Losing money in this market is not a new thing. Even most experienced and professional traders lost funds several times. In case of a major slump the entire accumulated profit upto that point of time or a part of it may be wiped out. .
So, there are either major or minor setbacks to everyone. While monitoring your performance if it is observed the setbacks is of minor nature and common then there is no need to worry about. To counter setbacks, a substantial amount of effort need to be adopted. A major reason why some traders fail is that they never monitor their progress and seldom analyse their failures. Success touches the feet of those only who never rest by just setting a goal but also endeavour to achieve it by taking wise and practical steps.
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