Choose Your Online Forex Broker

Online Forex brokers are known to be a required evil if you are going to trade in currency. There are also those people who are eligible to trade without outside assistance, but for the normal trader, enforcing to trade on the Online Forex market with no broker is like trying to chase a grizzly bear with a soup spoon. Your chances of achievement are actually very low, and there is a distinct option you would get hurt quite badly. Of course choosing the incorrect forex broker might return results same as to the sick fated bear hunt. That is why it is significant that you select a broker in the right way.First thing to be considered is to be sure that the broker you choose has the proper qualifications. When you look at the brokerage firms in the United States, immediately exclude those that are not registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC). This is again important as this designation means that you are confined against scam and any possible abusive forex trading practices. Covering your personal security before a forex trade has been made is a high-quality way to wade gradually into the forex currency market.Once you have removed the ones who do not have the required qualifications, and now have a short list of potential, the internet comes into picture. Just don't go with the brokerage firm, which has the best profitable, or gets the most excellent "Law and Order" individuality to assist in the following advertising, research your choices. A superior idea is to send some effective emails to your customer service people. Estimate how long it takes them to get in touch to you. This is, after all, a customer examine ambitious profession.Once you are pleased with a firm's experience and customer service practices, its time to get down to your self-assurance tacks. Online forex trading speed is forever an issue, so find out how fast it takes your own potential online forex broker to carry out an order. Also, you would desire to know how much slippage could be expected. This needs information, which could be discovered in a phone call, or any email to customer service. You would desire these answers not only for regular markets, but for fast moving ones as well.Online Forex brokers are known to be a required evil if you are going to trade in currency. There are also those people who are eligible to trade without outside assistance, but for the normal trader, enforcing to trade on the Online Forex market with no broker is like trying to chase a grizzly bear with a soup spoon. Your chances of achievement are actually very low, and there is a distinct option you would get hurt quite badly. Of course choosing the incorrect forex broker might return results same as to the sick fated bear hunt. That is why it is significant that you select a broker in the right way.First thing to be considered is to be sure that the broker you choose has the proper qualifications. When you look at the brokerage firms in the United States, immediately exclude those that are not registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC). This is again important as this designation means that you are confined against scam and any possible abusive forex trading practices. Covering your personal security before a forex trade has been made is a high-quality way to wade gradually into the forex currency market.Once you have removed the ones who do not have the required qualifications, and now have a short list of potential, the internet comes into picture. Just don't go with the brokerage firm, which has the best profitable, or gets the most excellent "Law and Order" individuality to assist in the following advertising, research your choices. A superior idea is to send some effective emails to your customer service people. Estimate how long it takes them to get in touch to you. This is, after all, a customer examine ambitious profession.Once you are pleased with a firm's experience and customer service practices, its time to get down to your self-assurance tacks. Online forex trading speed is forever an issue, so find out how fast it takes your own potential online forex broker to carry out an order. Also, you would desire to know how much slippage could be expected. This needs information, which could be discovered in a phone call, or any email to customer service. You would desire these answers not only for regular markets, but for fast moving ones as well.

Online Currency Trading and the FOREX Market - A Flexible Alternative to Commodity Trading

Online currency trading is all done through the Foreign Exchange or FOREX. It is the largest market in the world with about $1.9 trillion going into different hands everyday. Unlike all other financial markets on the planet, FOREX doesn't actually have an actual physical location. That is because it is all done on the Internet and through banks with individuals trading their local currency for another. Or, if they have come back from a different country, then they might be changing from that currency into their home currency. Because FOREX is all based on the Internet, you can use online currency trading services to work within the market 24 hours a day.

But to be able to use the FOREX service, you have to sign yourself up to one of the many companies that offer FOREX trading accounts to customers. You can open an account with any one of the hundreds of companies available; and then immediately begin trading currencies. You will not want to use this service if you only exchange currency once a year, as you can do that at your local bank. Although this choice of account is available, large corporations mostly use online currency trading and they are the ones that will use this service the most.

Also, on these online currency trading websites, you will get up to minute exchange rates from all over the world, so you will know the exact amount that you will get from your money. This also enables you to know the best time to use the online currency trading services. When the rates are just right for you, then that is when you can exchange your money.

However, it is important to note that some currency trading companies will need two days advance notice before you withdraw your money, so it is always wise to plan ahead if your goal is to make money with FOREX trading then use that money to pay bills or to pay for living expenses.

The Difference Between Forex & Shares

1. Advantage and favorable currency dealings first, is the continuation of dealing 24 hours a day. This leaves room for each dealer to devote part of his time, as circumstances allow for that. While some believe to do the job, while others see career professionally proficient in additional income lactation. They can spend a few hours in the afternoon or evening, regardless of the country or region where they live. The shares Treating the doomed Greenwich country belonging to him. In America, for example believe that the deal begins at 9:30 am and ends at 4:00 pm New York time.

2. In the currency market available at every moment trading conditions, regardless of the state of the economy generally. This situation imposes on the stock market retreat has long-lasting impossible to work. In currencies, a dealer can sell in the market and buy passiveness in the market is high. This provides the possibility of a profit in the case.

3. Easily traded currencies due to the small number, Valeraesseh of not more than six pairs, and this offers the possibility of focus and analysis. It also raises the incidence in defining the goal and reduce the error rate, while the shares that are dealing with more than hundreds of thousands, confounding dealer sometimes opted to different ways unsafe side to identify and hand work.

4. In the currency market, you can obtain the free illusory deal, which trained on the progress of work, while not in the stock market. You can also obtain market news periodically and continuous, and the graph too. 5-in the currency market, you can start with the "Arab Online Brokers" deal in a mini-account gives you the danger of trains because Khsartk limited to one point in this account equal to the loss in the extreme case one dollar. This is impossible in other markets.

Origins of foreign exchange

In order to gain a complete understanding of what foreign exchange market is, it is useful to examine the reasons that lead to its existence in the first place. Exhaustively detailing the historical events that shaped the foreign exchange market into what it is today is of no great importance to the fx trader and therefore we happily will omit lengthy explanations of historical events such as the Bretton Woods accord in favor of a more specific insight into the reasoning behind foreign exchange as a medium of exchange of goods and services.Originally our ancestors conducted trading of goods against other goods this system of bartering was of course quite inefficient and required lengthy negotiation and searching to be able to strike a deal. Eventually forms of metal like bronze, silver and gold came to be used in standardized sizes and later grades (purity) to facilitate the exchange of merchandise. The basis for these mediums of exchange was acceptance by the general public and practical variables like durability and storage. Eventually during the late middle ages, a variety of paper IOU started gaining popularity as an exchange medium.The obvious advantage of carrying around 'precious' paper versus carrying around bags of precious metal was slowly recognized through the ages. Eventually stable governments adopted paper currency and backed the value of the paper with gold reserves. This came to be known as the gold standard. The Bretton Woods accord in July 1944 fixed the dollar to 35 USD per ounce and other currencies to the dollar. In 1971, president Nixon suspended the convertibility to gold and let the US dollar 'float' against other currencies.Since then the foreign exchange market has developed into the largest market in the world with a total daily turnover of about 1.5 trillion USD. Traditionally an institutional (inter-bank) market, the popularity of online currency trading offered to the private individual is democratising foreign exchange and widening the retail market.

Why Trade the Forex Market

Trading the Forex market has become very popular in the last years. Technology advances like the internet have spawned this new trading craze, where anyone with a secure internet connection prepared to undertake a small amount of training can engage in trading foreign exchange on the forex market. Before the Internet, only corporations and wealthy individuals could trade currencies in the Forex market through the use of proprietary trading systems of banks, often through private banking. The foreign exchange market is one of the largest in the world if not the largest. It is more than 3 times larger than the stock/equities market and more than 5 times bigger than futures, give Forex traders nearly unlimited liquidity and flexibility. It has been estimated that approximately $2 trillion USD of currency exchanges hands each and every day. The foreign currency markets are very liquid because worldwide, the most powerful international banks provide a market around the clock. The Global foreign exchange market daily averages of the Bank for International Settlements in 1998 were $660 billion and now have increased to $2.3 trillion (2006). There is really no insider information in the forex markets. Since exchange rates are calculated by actual money flow as well as by the outlook of financial flowage, which takes into consideration such things as inflation, GDP changes, trade and budget deficits and surpluses, as well as interest rates, it would be difficult to come across so-called 'insider information'. All of these factors are self-evident, though different projected outlooks may prove more accurate than others. There is less room for market manipulation is there may be for thinly traded stocks. A equally important property of forex market is the fact that trends in forex market last longer and are more clearly defined than in any other trading instrument. Analysis of forex market charts also often displays identifiable chart patterns of price movement and once a pattern is established, the trend or pattern becomes the most probable course of future price action until the market changes. Because the FOREX market is so huge, there is no possibility of someone controlling the market price for a long time. When there are a lot of buyers and a lot of sellers, you can expect to buy or sell at a price that is very close to the last market price. The market maker in the forex market is usually a bank or brokerage company that provides during the trading day a bid and ask price. Example of forex market makers include CMS Forex, GFS, Forex, Forex Capital Markets (FXCM), and Global Forex Trading, all of which are regulated by the Commodity Futures Trading Commission (CFTC) of the USA. Brokers offer clients access to online FX trading system, platform or software that can make it easy and fun to trade the market and usually there are usually no commission charges. With these trading systems and platforms you can trade the forex markets for free using the same state-of-the-art software packages that professional Forex traders use to help them make real-time, live currency trades. So individuals with a few hundreds of their own currency hope to buy and sell something for a smiling profit. Speculators trade to make a profit by purchasing one currency and simultaneously selling another. In conclusion I think the FOREX market is one of the best investment opportunities around today. There are great opportunities in the FOREX market because of the constant movements of the exchange rates. There is no surprise that more and more traders are turning to the foreign currency market to take advantage of the fluctuation in exchange currency rates as a way to speculate and trade to increase their capital and wealth.

A Look at Online Forex Brokers

An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account).Gain Capital Group's Online Forex offers 200:1 leverage. In some cases, the total return on investment is higher due to leverage. For example, with $1000 cash in a margin account, the investor can control up to $200,000 in notional value. Of course, trading on leverage magnifies both the investor's profits and losses. GCI Financial Ltd. offers commission-free online trading in forex. GCI offers Internet trading software, fast and efficient execution, and 0.5% margin requirements. This broker offers USD or Euro denominated trading accounts. The spreads are 3 pips in EUR/USD and USD/JPY, and are 4 to 5 pips for other major commissions. Clients can hedge by opening positions in the same currency in opposite directions. Risk to the investor is limited to the deposited funds. Market analysis and research, real-time charts, and forex trading signals are available at no charge.ACM, part of the REFCO group, offers 3 pip spreads on all major currencies, which works out to between 0.02% and 0.03% on the dollar value. They also offer commission-free trading, and forex trading with a 1% margin, which means that a trader can control $1,000,000 with $10,000 in his account.There are many online forex brokers that offer free demo accounts for potential forex traders to practice trading. It is only a matter of registering and starting demo trading to get a feel for forex trading. In addition, at most sites, traders can find free forex news to assist them with their trade strategies.

Currency Exchange: Terms Every Forex Trader Should Know

Before jumping into the forex market, you need to arm yourself with some terminology that will be used in any course or software on this subject. The following set of terms were put together with the idea of providing the novice forex trader with the fundamental concepts of the forex trading business. While they sound technical, most are easy to understand and apply.

Let us begin with the instruments that are traded in the forex markets. Currencies are traded in pairs so the instrument will always be in this double denomination. The reason for this is simple; the basis of forex currency trading is to exchange one currency for another. So if the pair is the Euro and the US Dollar, and the forex trader is taking a long position or buying the Euro in hopes that it will appreciate, effectively the trader is also selling US Dollars to buy the Euros. The most widely traded pairs are the Great Britain Pound and the US Dollar (indicated as GBP/USD), the Euro and the US Dollar (the EUR/USD pair), the Aussie Dollar and the US Dollar (AUD/USD pair), the USD and the Japanese Yen (USD/JPY pair), and the Canadian Dollar and the USD (USD/CAD pair). These pairs account for well over 80% of the total volume of the trading in the forex market. The advantage to trading in these currency pairs is that they are highly liquid and allow the investor to convert their portfolio to cash very quickly to realize a profit.

In every pair, the first currency is called the base currency, over which the second one is countered to imply the price of the pair, or commonly referred to as the "cross currency". The second is therefore called the quote currency and the pair price is recorded in terms of the units of the quote currency required to buy one unit of the base currency. Thus, assuming the price of the GBP/USD pair is 1.5, this implies that 1.5 USD will buy 1 GBP.

Every pair is quoted in terms of a bid ask spread. The bid price is the rate at which your forex broker bids to buy the currency at, while the ask price is the rate the forex broker is asking to sell the currency to the forex trader. The bid price will always be less than the ask price and the forex trader will buy at the ask price and sell at the bid price. The bid ask price will be quoted as: GBP/USD 1.532/5, meaning the bid price is 1.532 and the ask price is 1.535.

A pip price interest point), as it is commonly called, is the smallest incremental change a currency pair will experience, for instance, a change in the GBP/USD price from 1.532 to 1.542 is a change of 10 pips. A trading margin is a deposit which is a minimum amount or a small percentage of your traded amount that you have to put up. The remaining amount is supplied by your broker. This amount can vary from 1% to 0.25%, also referred to as 100:1 and 400:1. Most often, forex brokers will offer 100:1 or 200:1 to most clients. This is risky but enables the trader to leverage a large amount that he or she would not otherwise have access to.

Finally, a margin call can happen when the forex trader allows the balance in the trading account to go below the margin deposit percentage agreed upon with the forex broker. The broker will automatically sell your long positions or buy your short positions and clear the entire trading account, returning the margin amount to the trader to protect the trader from losing more money than they have.

Forex Trading Systems

The foreign exchange currency market is the largest market in the world because it trades up to $1.9 trillion daily. There is an enormous scope of trade in Forex because it is global, and is open twenty-four hours a day, making the presence of buyers and sellers constant, and the fluidity of the market, grand. The market is ever present because it does not have a central venue like Wall Street or Tokyo. It is a series of internet and telephone communications between buyers and sellers and it is not overseen by any one main authority like the Securities and Exchange Commission. The Forex is made available to traders through platforms.Traders of Forex commonly favor Forex trading systems. Forex trading systems are methods of trading currency based on ideas that have rules associated with them. Forex trading systems are a merging of theory and practice that have been tried and tested over and over, and the results of the tests have been documented.Some Forex trading systems are based on the idea of going against trends. Other Forex trading systems are based on the idea of going with trends. Some Forex trading systems are based on the idea of tracking breakouts of a particular currency and these Forex trading systems rely heavily on the averages of a currency s highs and lows, and utilize Bollinger bands that track the average highs, the average lows and the moving average of the two.Traders utilize Forex trading systems in order to work against human characteristics that can hamper trading, like greed, addiction, impulsivity, compulsivity and fear.

The Laws of Charts

Great Ebook, explains in details al types of charts used in technical analysis, from the ebook: A typical 1-2-3 high is formed at the end of an up-trending market. Typically, prices will make a final high (1), proceed downward to point (2) where an upward correction begins; then proceed upward to a point where they resume a downward movement, thereby creating the pivot (3).

There can be more than one bar in the movement from point 1 to point 2, and again from point 2 to point 3. There must be a full correction before points 2 or 3 can be defined.

The number 2 point of a 1-2-3 high is created when a full correction takes place. Full correction means that as prices move up from the potential number 2 point, there must be a single bar that makes both a higher high and a higher low than the preceding bar or a combination of up to three bars creating both the higher high and the higher low. The higher high and the higher low may occur in any order. Subsequent to three bars we have congestion. Congestion will be explained in depth later on in the course. It is possible for both the number 1 and number 2 points to occur on the same bar.

Expose Yourself! A Powerful Technique for Breaking Emotional Patterns in Trading

Traders love patterns. We trade chart patterns, oscillator patterns, historical patterns, cyclical patterns—you name the pattern, chances are there’s someone trading it. Much of trading boils down to pattern recognition and the ability to quickly identify and act upon profitable patterns as they occur. This is particularly challenging for active futures and options traders, who must read the patterns, make their decisions, and place their orders within a matter of seconds.

Processing market patterns in the midst of our own emotional patterns—our tendencies toward impulsivity, hesitation, frustration, and regret—is one of the greatest challenges of active trading.

It is always sobering for traders to realize that they are every bit as patterned as the markets they’re trading—and sometimes far more so. In this article, I will draw upon two decades of experience as a clinical psychologist to illustrate a powerful technique for interrupting and changing repetitive emotional and behavioral patterns that disrupt trading. The technique is a cognitive-behavioral method known as exposure, and—in the Ranger tradition described by Brace Barber, Linda Rashcke, and me in September’s issue—it is a powerful tool for challenging oneself for exemplary performance...

Forex vs. Futures

The origins of today's futures market lies in the agriculture markets of the 19th century. At that time, farmers began selling contracts to deliver agricultural products at a later date. This was done to anticipate market needs and stabilize supply and demand during off seasons.The current futures market includes much more than agricultural products. It is a worldwide market for all sorts of commodities including manufactured goods, agricultural products, and financial instruments such as currencies and treasury bonds. A futures contract states what price will be paid for a product at a specified delivery date.When the futures market is played by speculators, the actual goods are not important and there is no expectation of delivery. Rather, it is the futures contract itself that is traded as the value of that contract changes daily according the market value of the commodity.In every futures contract there is a buyer and a seller. The seller takes the short position and the buyer takes the long position. The futures contract specifies a buying price, a quantity and a delivery date. For example: A farmer agrees to deliver 1000 bushels of wheat to a baker at a price of $5.00 a bushel. If the daily price of wheat futures falls to $4.00 a bushel, the farmer's account is credited with $1000 ($5.00 - $4.00 X 1000 bushels) and the baker's account is debited by the same amount. Futures accounts are settled every day.At the end of the contract period, the contract is settled. If the price of wheat futures is still at $4.00 the farmer will have made $1000 on the futures contract and the baker will have lost the same amount. However, the baker now buys wheat on the open market at $4.00 a bushel - $1000 less than the original contract, so the amount he lost on the futures contract is made up by the cheaper cost of wheat. Similarly, the farmer must sell his wheat on the open market for $4.00 a bushel, less than what he anticipated when entering the futures contract, but the profit generated by the futures contract makes up the difference.The baker, however, is still in effect buying the wheat at $5.00 a bushel, and if he hadn't entered into a futures contract he would have been able to buy wheat at $4.00 a bushel. He protected himself against rising prices but he loses if the market price drops.Speculators hope to profit by the daily fluctuations in the futures market by buying long (from the buyer) if they expect prices to rise or by buying short (from the seller) if they expect prices to fall.FOREXThe foreign exchange market (FOREX) has several advantages over the futures market. FOREX is a more liquid market – as the largest financial market in the world it dwarfs the futures market in daily exchanges. This means that stop orders can be executed more easily and with less slippage in the FOREX.The FOREX is open 24 hours a day, 5 days a week. Most futures exchanges are open 7 hours a day. This makes FOREX more liquid and allows FOREX traders to take advantage of trading opportunities as they arise rather than waiting for the market to open.FOREX transactions are commission-free. Brokers earn money by setting a spread – the difference between what a currency can be bought at and what it can be sold at. In contrast, traders must pay a commission or brokerage fee for each futures transaction they enter into.Because of the high volume of trading FOREX transactions are almost instantly executed. This minimizes slippage and increases price certainty. Brokers in the futures market often quote prices reflecting the last trade – not necessarily the price of your transaction.The FOREX is less risky than the futures market because of built-in safeguards in the trading system. Debits in futures are always a possiblility because of market gap and slippage.

Money Management

There are some common mistakes I’ve seen traders make in the area of money management. First, let’s understand what money management is all about.

Money management overlaps with risk, trade, business, and personal management, yet it has many aspects that make it unique, distinctly different from all of the other areas of management. In this chapter we want to examine some areas of money management that seem to involve mental quirks leading to costly mistakes.

Listening to Opinion

Kim has entered a short position in crude oil after carefully studying as many factors as she could reasonably include while making her decision to trade. She has entered the trade because her study of the underlying fundamentals has her convinced that crude oil prices must soon begin to fall. Then Kim turns on her television set and begins to watch one of the financial news stations. An “expert” in crude oil is being interviewed. He begins to talk about how crude oil inventories are almost certain to drop this year because oil companies are not doing as much exploration as they have in previous years. Kim listens intently to what he has to say and then begins to doubt her decision about the trade she has entered.

The more she thinks about it, the more panicky she becomes. She considers abandoning her position even though she will end up with a loss. The fact that an “expert” has decided something else completely shakes her confidence. She exits the trade intraday and takes a $400 loss. Prices have not come near her protective stop, which was $700 away from her entry. The market never moves sufficiently far to have taken out her stop. By the end of the day, her crude oil futures have made a new high, and in the following days explodes into a genuine bull market. Instead of a magnificent win, Kim has a loss. The loss is more than money, she has lost confidence in herself.

Forex vs. Futures

The origins of today's futures market lies in the agriculture markets of the 19th century. At that time, farmers began selling contracts to deliver agricultural products at a later date. This was done to anticipate market needs and stabilize supply and demand during off seasons.The current futures market includes much more than agricultural products. It is a worldwide market for all sorts of commodities including manufactured goods, agricultural products, and financial instruments such as currencies and treasury bonds. A futures contract states what price will be paid for a product at a specified delivery date.When the futures market is played by speculators, the actual goods are not important and there is no expectation of delivery. Rather, it is the futures contract itself that is traded as the value of that contract changes daily according the market value of the commodity.In every futures contract there is a buyer and a seller. The seller takes the short position and the buyer takes the long position. The futures contract specifies a buying price, a quantity and a delivery date. For example: A farmer agrees to deliver 1000 bushels of wheat to a baker at a price of $5.00 a bushel. If the daily price of wheat futures falls to $4.00 a bushel, the farmer's account is credited with $1000 ($5.00 - $4.00 X 1000 bushels) and the baker's account is debited by the same amount. Futures accounts are settled every day.At the end of the contract period, the contract is settled. If the price of wheat futures is still at $4.00 the farmer will have made $1000 on the futures contract and the baker will have lost the same amount. However, the baker now buys wheat on the open market at $4.00 a bushel - $1000 less than the original contract, so the amount he lost on the futures contract is made up by the cheaper cost of wheat. Similarly, the farmer must sell his wheat on the open market for $4.00 a bushel, less than what he anticipated when entering the futures contract, but the profit generated by the futures contract makes up the difference.The baker, however, is still in effect buying the wheat at $5.00 a bushel, and if he hadn't entered into a futures contract he would have been able to buy wheat at $4.00 a bushel. He protected himself against rising prices but he loses if the market price drops.Speculators hope to profit by the daily fluctuations in the futures market by buying long (from the buyer) if they expect prices to rise or by buying short (from the seller) if they expect prices to fall.FOREXThe foreign exchange market (FOREX) has several advantages over the futures market. FOREX is a more liquid market – as the largest financial market in the world it dwarfs the futures market in daily exchanges. This means that stop orders can be executed more easily and with less slippage in the FOREX.The FOREX is open 24 hours a day, 5 days a week. Most futures exchanges are open 7 hours a day. This makes FOREX more liquid and allows FOREX traders to take advantage of trading opportunities as they arise rather than waiting for the market to open.FOREX transactions are commission-free. Brokers earn money by setting a spread – the difference between what a currency can be bought at and what it can be sold at. In contrast, traders must pay a commission or brokerage fee for each futures transaction they enter into.Because of the high volume of trading FOREX transactions are almost instantly executed. This minimizes slippage and increases price certainty. Brokers in the futures market often quote prices reflecting the last trade – not necessarily the price of your transaction.The FOREX is less risky than the futures market because of built-in safeguards in the trading system. Debits in futures are always a possiblility because of market gap and slippage.

Futures Brokers

With all of the technical analysis and research that goes into commodities investing, it is possible that the most important decision you will make doesn't concern oil futures or the NASDAQ 100. Every trade you will make has one thing in common; while you might not always buy or sell, you will always be in contact with your futures broker. Your futures broker will be a part of everything you do and this fact makes your decision crucial.

The choice of futures brokers for commodity trading is not simply selecting to start a business relationship with a person, but it includes understanding the investment philosophy and available service of the futures brokerage firm. When choosing commodity futures brokers, there are several concepts to consider:

- Type of brokerage or the clearing arrangement
- A history of ethical business practices
- Amount of time doing business
- Level of commissions
- Level of service

Type of Brokerage Firm
Primarily there are two types of clearing arrangements for futures brokers, namely Futures Commission Merchants (FCM) and Introducing Brokers (IB). An FCM is a group of futures brokers that accepts orders to buy or sell options or futures contracts and accepts money or other assets from customers in connection with such orders. An IB, on the other hand, is a commodity broker who delegates the work of the trade execution, floor operation and back office operations to a FCM and acts primarily as an intermediary for your investment options.

History of Ethical Business Practices
Think about it this way; you will trust your commodity broker with a lot of money. Shouldn't he or she have a history of doing things the right way? In addition, the brokerage firm should always have your best interests in mind and resolve any problems in a fair way. A good way to check this is to contact the National Futures Association and find out if the broker has any disciplinary actions against him or her; a few minutes worth of checking might be your best investment advice.

Amount of Time Doing Business
80% of all businesses go under within the first five years. A beginner investing makes enough of his or her own mistakes; a futures broker is even more vulnerable. Because of this, it is wise to choose someone who has five or more years in the business, giving them time to establish their investment abilities.

Level of Commissions
One of the most common investing mistakes is not knowing the cost of doing business. Commodity trading creates a lot of trades, so the cost can accumulate quickly. It is a wise investment basic to know how much the commissions run for your trades; you can easily find this out before deciding on your futures broker.

Level of Service
You need to ask yourself; how much help do I need? If you are learning to invest, you will likely need more involvement from your futures broker; if you have a lot of experience, you might need less. It is important to decide this because the level of support varies whether you are using a discount futures broker or a full service brokerage firm. Either way, it is important to honestly evaluate your current abilities and choose based on your needs.

Conclusion
Selecting a futures broker and a brokerage firm are very important decisions; no brokerage firm can guarantee that you will make money but it is a very important part of the process. You will find that choosing a futures broker for your commodities trading that will handle your account with the highest degree of integrity and professionalism will enhance your trading experience.

Trading Strategies

It’s the age-old question that so many traders ask themselves and each other: which stock trading strategy should I follow?

Does day trading offer better rewards than swing trading? Should I scalp or hold positions? How can I best limit my risk, yet still generate the returns I want?Like others, I have often wondered whether I should be day trading or swing trading. I have found ways to do both, and each style has its advantages and disadvantages.

Ultimately, I think it’s a question traders should continually ask themselves, rather than just once early in their trading careers. Isn’t adaptation the key to successful trading over time?

The adaptive trader is always evaluating current conditions. Always be asking yourself questions. Is the market in an uptrend?

Smooth with good volume, or are they narrow, choppy and drifting on light volume?

By staying aware of current conditions, a trader is able to determine which trading style will suit him best in the near term, allowing him to limit risk and maximize the rewards of profitable trades.As you consider the best way for you to trade, be sure to evaluate your own personality traits.

By employing a trading style that corresponds with your personality, you are essentially being your own best friend (a cheesy phrase but a necessity for traders).

If you’re patient, consider a longer timeframe.

Your personality will help you to stay in positions while you wait for the outcome to develop. If you are hyper-active with lots of energy and a short attention span, you may be better of day trading smaller incremental moves on a short term basis. Take stock of your personality when contemplating the best trading strategy for you, and soon you’ll be on the right path toward claiming the profits that have your name on them.

In Part 2, we will take a look at day trading strategies, the pro’s and con’s of that approach, and what market conditions are best suited for that style of trading.