Many traders simply don't know how to use Forex brokers correctly and end up losing because some of the services offered are not as helpful as they seem - here's why...
Forex brokers provide a link to the market for you they are not there purposely to hurt you - but some services do, and here are the 4 that you need to use wisely or they will lose you money.
1. Leverage
200:1 is standard and I have seen 400:1 or higher now most traders don't need anywhere near this leverage 10:1 is fine for most but most get given it and use it - so why are brokers so generous? Most are market makers and if you lose they take your money. Over leverage kills more accounts than any other single reason, so a broker could give 1,000:1 and know traders won't use it wisely and lose.
Never over leverage! It's not the brokers fault traders over leverage, it's the trader's greed and naivety.
2. News Services
They also will provide you with a lot of news, either in house or from independent sources - but these services will distract you, reflect the crowd and the crowd always losses. Stay away from news from breaking news and so called expert opinion.
3. Demo Accounts
These are useful for one purpose - learning the trading platform. Don't believe the story that you can see if you will win for real, by using a demo account before opening a live account - it's not true. There is no pressure when there is no money on the line and just because you win in a demo account, does not mean you will win when money is on the line.
4. The broker Assisted Account
If brokers made money they wouldn't be brokers, they would be traders and to a degree, this type of account is dying out and so to are broker managed services. You are responsible for your destiny and don't shift it to anyone else, especially not a broker.
Use Broker Services Wisely
Today online Forex brokers offer retail investors a fantastic service - but its one you need to use wisely and not make any of the mistakes above and if you do you have a great link to the market ad Forex trading success.
