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.
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