Sick And Tired Of Doing Essentials Of An Ideal Forex Broker And Trading Plans The Old Way? Read On…

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Forex Broker Essentials


forex broker essentials
Forex Broker Essentials
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 foreign broker will always supply the best news/informations available to him/her. A broker will not only help 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, get positive guidelines and help too. 
In the beginning of your career in this segment, a good and expert 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. 

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Essentials And Basics Of A Foreign Exchange Broker :

  • Registration : It is absolutely essential that your foreign exchange broker or broking firm must be a registered one, signed up as a 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 always ask for the Registration Number of an authorised foreign exchange broking firm. Judge and if required, consult with the other clients of that broker to know about his/her competence in this profession. 
  • On Call Broker :  The broker must be aware that trading in forex is a ’round the clock’ affair and he/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 judge 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 and go through their qualifications/experiences and check their past performance history before finally picking up one. 

A Broker Is An Important Aspect For The Beginner : 

  • When you are just a beginner and stepped into the market with a dream of success, a lot depends on the broker. You must be 100 percent confident that the price you are ready to pay to the broker is really his/her worth. It is always better to choose a broker who is associated with a reputed forex company and is quite worthy to the reputation and goodwill of that company. If necessary, consult with some other clients of that broker and seek their views on the ability and expertise of the broker.

Selecting A Broker Is Not All, Selecting A Suitable Trading Plan Is Equally Important :-

Forex broking firms are equipped with several ‘trading plans’ typically called a ‘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.

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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, a ‘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 may vary widely. If a plan is followed blindly, you might fall short of knowing its ‘dos’ and ‘donts’ which may prove to be fatal for your hard earned money. 
Trading is an art and based on 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.
How To Cultivate Self-Discipline For Success :

  • 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 reap a rich harvest with maximum profit and minimum risk. Once your goal is set your task is half done. Remember, a disciplined trader always sticks to his/her goal. Goal so set should always be realistic – means it can be achieved by an average person.
  • Actions : Next, most important task is to chalk out your plan and strategy to achieve that goal. Strategy and perfect 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 and lesser risks then ‘trading plan’ should also match that goal. 
    Traders who are seasoned to bear ‘high risks’ for ‘higher profit’ prepare their trading plans likewise. For beginners, it is always advisable never to get carried away with greed for more as it makes you vulnerable to ‘disastrous consequences’. If the scope of profit is a reasonable percentage of your 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 And 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 lose money 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 progress if it is observed that the setbacks are of minor nature and common then there is no need to worry about. What one has to do is to ensure that the number of ‘winning occasions‘ is always greater than the number of ‘losing occasions’. 
    To counter setbacks, a substantial amount of effort needs to be adopted. A major reason why some traders fail is that they never monitor their progress and seldom analyse their failures. Remember, success touches the feet of those only who never rest by just setting a goal but also endeavour to achieve it by adopting wise and practical steps.
Read : Forex Trading – Checklist For Beginners
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