Finding Forex Broker
Investor categories and
how to find a good forex broker
Forex trading has gained enormous popularity over the past few
years, much of it due to frustrated investors searching for a more accommodating medium of investment. Stocks
have lost their luster during the recession unless your approach has been more like a trader than a long-term
investor. As newcomers to forex have learned very quickly, there are high-risk profiles that
must be addressed, and one must be adept at both fundamental and technical analysis or risk disaster at every
turn. In the forex domain, these two analytical tools are your partners, working synergistically for your
ultimate success in forex trading.
Two categories of
Investors from the world of stocks and bonds generally fall into two categories.
There are those that prefer to research their investment options to a high degree up front and then buy and hold
for the long-term, perhaps disposing of their weak performers from time to time and fine tuning their portfolios to
ensure prudent diversification.
|The foreign exchange or currency
trading must take place via properly accredited
investment broker or a broker company, to be
scam-free. (Image by Pixabay.com)
The second type recoils from this “plodding” process. He is more action oriented
and prefers to actively manage his portfolio, entering and exiting the market at will, always ready to pounce on a
short-term opportunity. The former traditionally relies on fundamental analysis, while the latter is joined at the
hip with technical analytical methods of investing.
In forex trading, these distinctions quickly blur. If a trader ignores the
potential for disruption that fundamental economic data releases can cause, then he misses both an
opportunity to grab onto a predominant trend or, worse yet, he may be blindsided by an immediate reversal in
pricing behavior that his awareness could have prevented with proper
Experienced traders learn early on to keep schedules of potential
release dates and times for the government agencies in the countries of their respectively chosen currency
good forex broker
The forex broker
reviews often point you towards the brokers that provide quality
customer support, including current schedules of key events. By necessity, volume and volatility naturally
increase around these key dates and times, and brokers must prepare for the avalanche
The Forex markets
involve trading currencies on the open market internationally.
The best ones increase their server capacity for these periods in
order to maintain efficient order execution. Others accept the overloaded condition as a cost of doing
business and even exempt their responsibility for executing on a timely basis during these critical
Trading on the
Trading on the
news is one of the first forex strategies taught in a
course. There are many data releases that can be classified as
“market movers”. Interest rates, GDP growth, consumer confidence, and pricing data are a
However, for the past few years, the release that guarantees a 50
to 200-pip move in relative rates compared to the U.S. Dollar is anything related to employment. The
Department of Labor releases its report for the previous month on the first Friday of every month at 8:30 EST
in the morning.
markets initially “stall” in anticipation of this data release with
perhaps some minor movement in one direction that reflects the “mood” of the majority of traders. There is a
bit of jostling after the immediate release by those that are attempting to guess the eventual direction of
the impending trend, but it generally takes forty-five minutes for analysts to read, assimilate, and develop
an opinion about the data.
At that point, the majority becomes a plurality, and a definite
trend line forms, lasting upwards of a few hours before leveling off at a new equilibrium. Technical
indicators are used to guide your entry and exit.
Trading on the news requires fundamental and technical analytical
support, as do most all other forex strategies.