Forex Broker
Choosing a broker isn't that easy. There are hundreds of brokers Many of them are scam you!!! . Before investing check for feedback on the website Forex Peace Army or surf some forums. It's very hard to find a broker that will satisfy all your needs like spread, no slippage, deposit amount etc. but overall, you need to know if you want to trade with a Market Maker (MM), TRUE STP or an ECN broker.
So let's say a few words about those three types of brokers.
Market Maker -
this broker makes the market. every time you buy or sell a pair the broker is the counter party. If you lose your money, the broker earns it. So their interest is you losing money and that's bad. The only good thing is the instant execution, all your orders are filled almost in the same second and you won't get any re-quotes. This type of brokers are OK for smaller amounts but when you'll start making trades at 5$/pip they will delay your execution or even make your trades re-quote. But on the other hand, market maker have account types with minimal deposit requirements and often offer nice welcome bonuses for newbie trades. Some will give you 5$, 10$ and up to 200$ bonus without any deposit made.
ECN Broker -
is a broker that offers you direct trading on the real market. This broker makes money from spread displayed to you: Example : current spread on an GBPUSD pair is 0.3 pips, this broker might display you a 0.6 pips spread, so he's making 0.3 pips on every trade you make. And ECN brokers have commissions per round turn lot traded, around 10$/round lot. Real ECN brokers have min deposits above 1k$ and min lotsize of 1$/pip. traders are typically required to trade very large lots and minimum deposit requirements min.$50,000. This model is will re-quotes and order rejections. when you open a large order the broker routes it to the real market, but the prices there might have already changed so the broker is faced with two options: either rejecting the order asking for you to adjust prices or completing the order by taking the risk that it might end up a successful trade meaning the broker will have to pay you from its pockets and this will not happen.
STP Brokers -
are a hybrid between Market Makers and ECN brokers. This type of broker displays most of the time its own quotes which are correlated to the actual inter banking quotes.
And now here is the real complexity of STP brokers.This brokers sometimes routes your orders to the real market (acts as an STP broker) but other times it doesn't and acts like a Market Maker.
STP brokers use complex algorithms that finds if a trader is successful and automatically routes those traders to the real market while small and losing traders aren't routed to the market. This way the broker profits twice once by clients losses and another by not losing money to successful traders. STP brokers are currently a hit and are not so long around.
So let's say a few words about those three types of brokers.
Market Maker -
this broker makes the market. every time you buy or sell a pair the broker is the counter party. If you lose your money, the broker earns it. So their interest is you losing money and that's bad. The only good thing is the instant execution, all your orders are filled almost in the same second and you won't get any re-quotes. This type of brokers are OK for smaller amounts but when you'll start making trades at 5$/pip they will delay your execution or even make your trades re-quote. But on the other hand, market maker have account types with minimal deposit requirements and often offer nice welcome bonuses for newbie trades. Some will give you 5$, 10$ and up to 200$ bonus without any deposit made.
ECN Broker -
is a broker that offers you direct trading on the real market. This broker makes money from spread displayed to you: Example : current spread on an GBPUSD pair is 0.3 pips, this broker might display you a 0.6 pips spread, so he's making 0.3 pips on every trade you make. And ECN brokers have commissions per round turn lot traded, around 10$/round lot. Real ECN brokers have min deposits above 1k$ and min lotsize of 1$/pip. traders are typically required to trade very large lots and minimum deposit requirements min.$50,000. This model is will re-quotes and order rejections. when you open a large order the broker routes it to the real market, but the prices there might have already changed so the broker is faced with two options: either rejecting the order asking for you to adjust prices or completing the order by taking the risk that it might end up a successful trade meaning the broker will have to pay you from its pockets and this will not happen.
STP Brokers -
are a hybrid between Market Makers and ECN brokers. This type of broker displays most of the time its own quotes which are correlated to the actual inter banking quotes.
And now here is the real complexity of STP brokers.This brokers sometimes routes your orders to the real market (acts as an STP broker) but other times it doesn't and acts like a Market Maker.
STP brokers use complex algorithms that finds if a trader is successful and automatically routes those traders to the real market while small and losing traders aren't routed to the market. This way the broker profits twice once by clients losses and another by not losing money to successful traders. STP brokers are currently a hit and are not so long around.
PAMM Account
How Forex PAMM works?
PAMM means we need a master trader who manages his master account with real money and we need investors which will assign their trading accounts to the money manager account to handle their accounts for them. when master trader engages in a trade and all of the managed accounts automatically copy the same trades from the money manager in the same time, there are no delays, always the same time. Trades are automatically copied to investors account with size based on their investors accounts. Even more simply said the manager will not trade each account separately but will make one trading decision which will affect all following account at once and will allocate gains to each account.
Fair investment.
In difference to funds or pooled investments Forex PAMM allows investors (managed account holders) to withdraw at any time with no costs and therefore capitalize on their gains or minimize their losses which have occurred from the trading decisions of the Master account holder which their accounts follow.
therefore meaning that in most cases as an investor or a shareholder of a pooled investment you will not be permitted to withdraw your share at any given time as bonds, property or stocks cannot be transferred to raw cash on the spot. PAMM accounts don't have this disadvantage.
The fundamental tasks of a trader in FOREX PAMM accounts is to maximize profit and protect his and investors capital. However
PAMM means we need a master trader who manages his master account with real money and we need investors which will assign their trading accounts to the money manager account to handle their accounts for them. when master trader engages in a trade and all of the managed accounts automatically copy the same trades from the money manager in the same time, there are no delays, always the same time. Trades are automatically copied to investors account with size based on their investors accounts. Even more simply said the manager will not trade each account separately but will make one trading decision which will affect all following account at once and will allocate gains to each account.
Fair investment.
In difference to funds or pooled investments Forex PAMM allows investors (managed account holders) to withdraw at any time with no costs and therefore capitalize on their gains or minimize their losses which have occurred from the trading decisions of the Master account holder which their accounts follow.
therefore meaning that in most cases as an investor or a shareholder of a pooled investment you will not be permitted to withdraw your share at any given time as bonds, property or stocks cannot be transferred to raw cash on the spot. PAMM accounts don't have this disadvantage.
The fundamental tasks of a trader in FOREX PAMM accounts is to maximize profit and protect his and investors capital. However
Useful Link
1. http://www.dailyforex.com/
2. www.100forexbrokers.com/
3. www.forex-broker-rating.com/
Free Signal Provider :
1. http://live-forex-signals.com/
2. http://www.fxmarketleaders.com/
2. www.100forexbrokers.com/
3. www.forex-broker-rating.com/
Free Signal Provider :
1. http://live-forex-signals.com/
2. http://www.fxmarketleaders.com/