Finding a Forex Broker

First things first. We need a broker to handle our transactions. This is a little dicey for me because I use a broker I consider the best: OandA. Not all broker/dealers are reputable. There are scoundrels at all levels. Since this is a world-wide business it pays to check out who you’re dealing with. I selected http://www.oanda.com on that basis and am very happy I did so. However, not everyone agrees with me.

It’s my own opinion and experience. And I don’t receive a dime for referring you to them. You may already have a broker of your own, but if not then give them a try. For one thing all the info you’re going to learn and see in this report is from their platform.

On the other hand, if you’d like to check out additional brokers, there’s a pretty good collection of opinions at: http://www.forexpeacearmy.com

Here’s a review from that site that expresses my sentiments completely.

From: Nick in Brisbane
Date of Post: 2008-10-27
Review: “I've been using OandA for almost 2 years and haven’t experienced any major issues with their service or platform. Their charting software is not the best but the most important things for me are tight spreads on the majors and reliable execution of orders.

The bitching that goes on here about wide spreads during data releases just confirms my opinion that most would-be traders here are novices with very limited experience or knowledge of themechanics of financial market places. During volatile market conditions all brokers have to face and deal with widening spreads from their liquidity providers. That’s the nature of the global nterbank market. For some reason all the "Johnny come lately" trade-from-home novices that frequent this site think that for some reason brokers such as OandA should bear the cost of this volatility by guaranteeing fixed spreads.

Trading currencies intra day is not a get rich scheme but a highly skilled niche skill. If you can’t devise a way to make money without betting on split second volatility during data releases then go and find something else to do.”

What he’s saying is there is widespread trading based on news events. For example, if you think an interest related report is coming out that is gong to move the markets, you jump on it.

But let’s be honest. Do you think you can catch that kind of trade consistently when your
competition is big banks with millions of dollars?

I don’t trade news stories. Never have. It’s just not worth the grief if you’re on the wrong side. So I would strongly encourage you to refrain from that kind of trading unless you have a really good crystal ball! Now that we’ve got that out of the way, let me be more specific. I only trade the Eurodollar/US Dollar (EUR/USD) pair, but my strategy works with any currency pair.

If one currency gets stronger than the other then the numbers go up (or down). To tell you the truth I don’t really understand why. The less I know about economics the less likely I am to be influenced one way or the other!

I just know how to trade the numbers!

Now, this is very important. On most days, at precisely 08:30 AM, Eastern time, and then again at 10:00 AM Eastern, a variety of reports come out that can shock the markets. We do not want to hold a position around these times!

Once again, for the few moments before and after these times, do not trade. When the
fireworks are over we go back to our regular trading pattern.

We make our profits on small, consistent trades that add up to five percent per day. We don’t shoot for a big killing that could result in devastating losses!

If we don’t reach our goal of five percent, possibly because of a very slow day, we don’t try to make up for it. We simply wait for tomorrow to continue our efforts.

We’re not in a hurry. We’re not greedy. We know we’re going to the world series even though we’re going to lose a lot of games on the way!

Before I finish beating this issue to death, there is one more thing you must take into account and that is the meeting convened usually eight times a year by the Federal Open Market Committee (FOMC). This is the group (commonly called the Fed’s Fund Rating) that defines interest rates.

This has a huge impact on the currency markets. DO NOT try to trade during the few minutes before and after the report is made public, around 2:15 PM. Eastern.

To obtain the dates, go to:

http://www.federalreserve.gov/monetarypolicy/fomc.htm#calendars

End of issue!