Best forex brokers accepting us clients
This is because in addition to individual investors also known as retail customers the Forex market is also used by large investment banks, insurance companies and financial institutions. They use the market to manage the risks of currency exchange rates fluctuations. The risks to small individual investors and traders in a large and unregulated market are enormous. For example, unregulated Forex brokers often use the allure of high leverage to make themselves attractive to individual investors with low initial investments and capital.
They promise huge profits by using only your small initial investment. However, as many Forex traders know, this is a dangerous strategy and it can lead to big losses just as easily.
High leverage increases your profits in the same way it increases your losses. A small trader should always look to use only his own funds. He should only put at risk what he can afford to lose. High leverage may seem attractive, but it can be the death of a small investor. Fortunately for retail customers, there are regulatory agencies around the world which regulate big international markets and try to protect traders. These governmental, sometimes federal and sometimes private institutions make sure that the risk of fraud and misinformation is minimized or completely eradicated.
There is no one specific central agency to regulate the Forex market. However, most developed countries have clear rules and laws regarding Forex trading and Forex brokers.
In an attempt to explain legal US Forex trading we will list the answers to the ten most frequently asked questions on the topic. If you are a US citizen you will have no other option, but to trade with a regulated Forex broker so you might think that going through the register might not be worthwhile.
However, checking the information about each broker might be invaluable when making the decision which Forex operator to choose. For example, in the period between and , 26 thousand people were the victims of illegal activity and fraud. The US Forex market is one of the most highly regulated markets in the world.
This makes the market safe for investors and unattractive for fraudulent brokers. The CFTC is a governmental agency, independent from other bodies, which governs over and oversees all Forex transactions conducted through regulated Forex brokers which operate in the United States. Its main objectives are maintaining the integrity of markets within the USA and protecting traders and investors from being involved in a scam or a fraud.
Some of the key regulations include:. These regulations differ quite a lot from other countries where markets are less regulated. In fact, since the Forex market has started being regulated in the US, a lot of Forex brokers looking for quick profit have left the US and moved to countries with more lenient laws.
This further strengthens the notion that the US Forex market is one of the safest for small investors and businesses. Best Legal US Forex Brokers and Trading Platforms As many of you already know Forex trading is the trading of foreign currencies based on expectations of how currency exchange rates will change.
This doesn't mean that all your trades will be winners. It does mean that you don't have to be exact in your entries and exits once you find a strong trend to trade. Now how do you know when a trend starts and when it is going to end?
Since this is a beginners guide I will not elaborate on the various techniques that traders use to identify trends as this is beyond the scope of this book. I will however touch on several techniques in later chapters but note that these will be just in an introduction level without going too much deeper.
Any trader either a newbie or a pro should develop his own style of trading. There are several trading styles that you can adopt. You will choose your style based on your personality and financial capacities.
Many traders make the mistake of adopting a trading style that is unnatural for them. A trader may adopt one of the following two main trading styles: Day Trading and Intraweek trading. Let's discuss each of them;. Day Trading Day trading on Forex means that one or few trades are conducted within one trading day.
As a rule, the time intervals between the opening or the closing of trades may take from several minutes up to several hours. Despite some difficulties of day-trading, this type of trading is very popular among the newcomers as well as among experienced traders. Day trading allows for the opportunity to make a profit in a short time with a small amount of funds.
In order to achieve favorable results in an intraday trading it is essential that you make the right forecast as to the price movement, as there are many external factors that cause high volatility in the currency market. So to make your day trading beneficial you have to track the market situation, collate facts and make conclusions about the price behavior of currencies, it is also important to be able to react fast so that you will find entry and exit points quickly at the opening or the closing of trades.
Combining knowledge of technical analysis to be discussed in a later chapter with patience and observance a trader has good chances to earn well with a relatively low risk. There are several strategies of day trading. The most widespread among them is Scalping - a strategy that is offering a fast opening or closing of several day positions. The trader closes trades while making just a few profit pips on each trade while the earnings come from the accumulation of a large number of successfully completed short term trades.
Another popular day trading strategy is news trading. Traders, who choose news trading, monitor the market events permanently, analyze the currencies behavior in different cases. Usually news trading requires an insight learning of market development and a proper trade experience accumulation. Day trading can be a source of a nice income through the readiness to devote most of your free time to trading. Now here are the advantages and disadvantages of day trading.
This style is suitable for traders with endurance and quick reactions. Intraweek Trading Intraweek trade has no such furious market movements as in intraday trade.
It may seem that the market is motionless. But it is just at the first sight. Intraweek trading has the following characteristics: Intraweek pros and cons:. Forex Trading Risk Management Your first concern when trading Forex should be not to risk too much money on any given trade. Unfortunately, many traders start trading Forex without thinking about the risk that they are taking - only about the potential rewards.
If you want to succeed in Forex you must take into consideration the maximum percentage of the total trading money that you should risk in any one trade. Actually, your ability to limit your losses is equally as critical or even more critical as your success in managing winning trades.
The goal of practicing a good Forex money management is to minimize risk and increase payouts. For starters here are 3 quick tips:. First, Trading Forex is fun and exciting and money can be made; but you must also keep in mind that like with any other trading there is the risk of losing.
Hence, Forex trading rule number one: Second, never borrow money while trading, trade only with your own money this does not apply to leverage that is provided by your broker.
And third, set and stick to a budget. Write it on your forehead if you have to, but no matter what, when you hit that number, quit trading for the day. Good money management calls for adopting a conservative investment strategy that means that you should never risk your entire capital. When you enter a trade no matter how great it may be , always ensure to only invest conservatively. Forex trading like any other investing is not a sure thing, there is always a risk factor involved.
A conservative investment strategy helps you to conserve your money when things go wrong. Forex trading offers a lot of choices to the trader. A good money management strategy requires diversification. The volatility that accompanies trading currencies is much distinct from say trading commodities as well as stocks. Obviously, the payouts may vary depending on the currency pair which is selected. As the saying goes, never put all your eggs in the same basket.
Losses in a trade should be accepted on a positive note. The effects of a trade that goes against you are able to impact the future or successive trade decisions. Expecting losses whilst investing can assist traders in identifying the areas which may happen to be unnoticed. Losses needs to be seen as a stepping stone instead of having it affect you.
Start off slow and scale up - this has a significant role particularly for beginner traders. Certainly do not fall for the emotions and commit your entire amounts right away on one trade. Investing in small amounts continually helps you to take a self-disciplined approach. The majority of Forex brokers allow for a small minimum trade sum.
Use this advantage and be sure to trade with patience. Do not expect to make gains with Forex trading as soon as you made your first deposit.
Trade in small amounts until you have the sense of the assets that you're trading. This can gradually build your self-confidence levels and helps to automatically be aware of the indicators and be able to prepare your investing strategy and ultimately help reduce the losses. One of the important things that specifies successful traders has to do with using a good money management strategy.
There is a fine line between gambling and trading.