Forex Broker Myths - 3 Common Myths, Believe Them And Lose
By kelly price
I earn a living in providing forex education but for 12 years, I was a forex broker and can tell you the three forex broker myths enclosed, will damage your chances of winning at forex trading so here they are...
1. Forex brokers Hunt Stops
No they don't they don't need to.
Consider this most forex brokers are market makers - this means that they win when you lose. They know over time that an average of 95% of traders will blow their money and that's great odds if you're the dealer.
They don't need to try and get the forex trader to lose; he can do that all on his own.
The story about hunting stops is put about by day traders most of the time. The problem is there not going to win anyway, because their stops are within random volatility and their bound to lose over time - so they pick someone to blame their broker!
It's not true
I have never ever seen a day trader win and I traded in excess of 9,000 clients, it's a mugs game. Instead of blaming their broker, the forex day trader should look at a more logical way of trading.
2. Demo Accounts are Great Way to Learn
Learn what exactly?
Maybe how the mechanics of orders work - but there of no use whatsoever in helping you trade, because the most important part of the trading experience is absent - Money! It's trading money that creates pressure and you can't get that from a demo account. Try trading real money and it's a lot harder.
So when a broker tells you they can help you trade successfully with a demo account, don't believe them. 95% of traders who make money with demo accounts, burn their money in real time trading.
3. A Broker Can Give You Advice
Never ever take advice from a broker and have a broker assisted account and the reason is obvious:
If brokers could assist you in making money, they would do it for themselves and wouldn't need a salary! They would all be traders instead. Trading success comes
from how you trade - your responsible for profits and your currency trading success - don't let anyone tell you any different.
What Makes a Good Broker?
Very simple these 3 points
1. Tight pip spreads
These should be as low as possible why pay more when you don't need to? Pay too much and that is subtracted from your profit and added to your loss hurting your bottom line profits.
2. Security
There is no point in having great services and fees and your broker goes bust! Check how long they have been in business, security of funds etc
3. Trading platform and support
Should be easy to use reliable and you should have 24 hour support.
The above is what a good forex broker should provide and if you want to be successful, avoid the forex broker myths enclosed and choose one based upon the above points.
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