ForexGen | Does Your Forex Broker Immediately Offset Positions With Their Clearing House Or Do They Actively Take Positions On The Other Side Of Their

Remember even if the forex broker review passes the transaction on to a clearing house or clearing broker, your forex broker review is your only counter party. You trade EUR/USD. You buy, broker sells. You win, broker loses. You lose, broker wins. We have shown you in the leverage in forex example that it is a good business model for the forex broker review to take the opposite side of a trade of a highly leveraged speculator and that based on statistics those highly leveraged speculators generally lose.

Find a broker where you can trade with low leverage, definitely lower than 300:1 or the ridiculous ratios like 500:1. Those brokers offering high leverage have a business model established primarily for transferring wealth from their clients accounts into theirs and are not looking after YOUR interest. Remember also that there is a big difference between the minimum margin required and leverage. If you don't understand these concepts you are at risk. Nothing a broker offers in terms of technology, charts, news, training, narrow spreads, interest on unused margin or any of the many tricks the marketing wizards play will save you from the peril of too highly geared trading.
Dealing desk brokers (market makers) also do not allow for scalping in forex trading. (See our Forex Scalping Strategy page for an explanation of scalping and examples of forex scalping systems and methods).
Lastly enquire whether the forex broker review is a small independent entrepreneurial firm or is it part of a larger financial group? If the firm is part of a large financial group it is possible that many of the risks associated with a smaller firm do not come into play. It is also possible for your broker in such case to indeed offset all trades with "mother ship", thereby limiting the riks of "running stops", which may sometimes be to your disadvantage.

Non Dealing Desk Forex Brokers
Is there an alternative to the dealing desk broker? Yes. Your success in trading does not have to be tied to the good will of your sponsoring broker and the restrictions of an artificial market created and controlled by the sponsoring the forex broker review . You can trade currencies the same way brokers do through the forex broker review - through a non-trading, non-dealing desk. Instead of trading against a single broker, you can trade on-exchange against banks, institutional investors, and FCM’s through a disinterested broker who’s income is defined by a nominal transaction (commission) that is limited to a single pip per round turn.
Dealing Desk brokers advertise "zero commission" trading on their websites to promote a supposed benefit when in fact this is not how they make money. They make money through the spreads they charge clients and which (if you have had some experience in the past with them) you would know that they tend to jump unexpectedly in certain times. With a non-dealing desk broker, the fees (commission) they charge are fully transparent and stated upfront. the forex broker review is decidedly less than what you pay trading against a broker who controls pricing, can spike your trades and offer quotes whatever may suit them.

To learn more about the advantages of trading through a non-dealing desk forex broker and why its becoming a very popular option for serious traders, see here: Non-Dealing Desk Forex Trading. FX is now offering "mini" accounts through a non dealing desk as well and you can sign up for a FREE DEMO account. You will also find there some interesting and useful education tools worth checking out.

ForexGen Demo Accounts Contest
Win Cash Prizes
ForexGen has the pleasure to announce the launching of the Demo Account contest on the first of every month.