Take a look at your Forex Broker

I wanted to take some time and create a series of blogs that will help Forex traders better navigate the “shark infested waters” of the Spot Forex over the counter marketplace.  I have spent a tremendous amount of time over the last few months researching the forex brokers.  I want to share what I have learned and how to better combat some of the tactics that brokers take to help them insure a better bottom line. 

Let me just say, that I still love trading the Forex market.  I think it is a great place to build a profession.  The Forex market is still the largest financial marketplace in the world.  To help insure that you are one of the successful traders in this marketplace you will need to start considering some positive steps.  

I would first start out by calling your Broker, ask them if you are on STP, Straight thru Processing.  You want to make sure that your broker is not trading against you.  I would send them an email to make sure that you have whatever they tell you in writing. What you will more than likely get from your broker is Bla Bla Bla-meaning “We don’t have a dealing desk”  - Well all you have to do is call your broker tell them you would like to talk to the dealing desk to place a trade.  Guess what?  Bet you get the so called nonexistent dealing desk. 

Just because they say they don’t have a dealing desk doesn’t mean they don’t have one.  You just have to ask them to put it in writing that they have your account on STP, if they won’t find a new broker.  When I Was introducing customers to the Forex Brokers I asked that my customers be put on STP, I even had the broker put in writing that my customers were on STP, Again not to beat this point to death, but you can only do what you can do, just get in writing that your broker is using STP for your account.  You do not want to be associated with any sort of aggregated orders. 

Also take special note when you are trading as to latency-How slow your order is filled, slippage, whether you get the price for your buy or sell that you executed the trade at, or error messages.  Any and all of these and others could be an indication that something is wrong, that the broker could be trading against you.  Even if they tell you that your account is on STP.  Even if the Broker says they don’t have a dealing desk.  They could have just simply removed the vocabulary word dealing desk and replaced it with a “server” automation of sorts.

To not sound so negative you can still trade this market and find good brokers, there are lots of traders that make money trading Forex.  If you want to be one of those traders then you need to become aware and understand the Forex market place, recognize that the Forex brokers are in business to make money.  Then arm yourself with all the knowledge tools and strategies you can to place solid trades. 

Watch for my next blog on more strategies to help you place better trades and beat your broker.