Quote from Chood:
Trotting out an older post, adjusted somewhat for this interesting and relatively easy request for help in identifying which fx dealer's platform to choose. The answer is in parts:
1) Avoid exchange-traded products, where cold-blooded volatility jeopardizes your money. That means avoiding "brokers" who place your orders on exchanges. "Brokers" aren't dealers. Unlike dealers, brokers don't make the prices themselves. They only place your orders on exchanges, where your order is executed or not according to market forces. Forex futures on the Chicago Mercantile Exchange are an example. CME forex futures are priced according to market forces and, if at any point there are more sellers than buyers for the currency future youâve bought, youâll lose. No mercy. And, believe it or not, your broker will get paid nonethess; he earns a commission whether you win or lose.
2) Scrap together all you have and all you can borrow and open an account with a spot forex dealer. These are the companies that offer platform trading of foreign currencies. These are the companies the poster is asking about (although he confuses them with "brokers"). There are dozens of these forex (or "fx") dealers to choose from, each one with its own platform for trading. At the one you choose, the dealer's algorithms and its dealing desk personnel (live human beings) will move and set the prices, including for specific orders such as stops and limits. No such personal touch with exchange-traded products, the prices of which move strictly according to market forces.
3) Always remember that the fx dealer is there to help, offering a fascinating trading platform free of charge, with juicy extras like charts, streaming news, and commentary. The dealer is giving you access to international finance, and at a pittance of what the big players pony up to participate.
4) Quit your job.
5) Use the extra time you now have to read all the most active posters on boards devoted to forex. Some of those boards, like Moneytec, have an unusually high percentage of posters who make money trading forex. Those traders have developed systems, particularly systems grounded in technical analysis, that consistently deliver profits. Follow those systems in your trading. They can do it, so you can, too.
6) Closely follow each new post of successful âsystemsâ traders. Eventually, the poster will let slip the name of the spot fx dealer he trades with. Thatâs the dealer you want to go with (see item #2 above). Itâs easy to start because that same dealer usually sponsors the board youâre reading. Just click on the dealerâs ad and youâre set.
If your average trade size is 10x your account size, then you're playing with leverage, at current levels, of merely 12:1 for euro or, equivalently, 18:1 for pound. A fraction of 50:1, let alone 100:1.