What is Forex Broker? A Complete Guide and Review
Best Forex Brokers Review for 2023
We analyse the best forex brokers each year. In the foreign exchange industry competition is aggressive. That’s why we are committed to analysing the best forex brokers for you every single year. Choosing the best forex broker requires some important skills. Each broker’s trading platform was tested by our team of expert forex traders. You can Check Our Brokers Review on this Website: forexbrokersfacts.com. Forex trading is a foreign exchange to trade currencies. Just like how we trade reliance, Bajaj Finance and Nifty. Over here we trade USD-INR or Euro-USD, and we trade other such pairs. There’s a difference in money but you get quite a high leverage.
In this article I will tell you:
- What is Forex?
- Which pairs to trade?
- Which broker should we use for trading?
- Which mobile app should we use?
- What are pips and lot size in a mobile app?
- What is the strategy of a Forex Broker?
- What are the risk management techniques and psychology of forex brokers?
- What are the advantages and disadvantages of using forex brokers for forex trading?
Forex trading means to trade pairs such as Euro- USD, USD-CAD, GBP-USD, and to trade other such pairs. We trade currencies in forex. How do you trade currencies? But now the question is: Forex is illegal, isn’t it?
If we talk on a global level then Forex trading is legal. While not all nations allow for unchecked exchange, no nation currently bans forex trading totally.
What kind of brokers have you come across so far in your life? You have seen Zerodha, Upstox and so on. Zerodha, Upstox, and Angel Broking all provide 4 pairs to trade: USD/INR, GBP/INR, Euro/INR and JPY/INR.
You can trade in these 4 pairs but this is not real forex. Why? Do you know why? Because it opens at 9 AM and closes by 5 PM. The other forex pairs don’t close at 5 p.m.
USD/INR is running in the main Forex account. We need a real forex account. So there are so many accounts in this world that there’s an account called Exness.
There’s an all-in-one app called Metatrader. Now we must have heard of Metatrader MT4. You have to install Metatrader and Metatrader is something where all your IDs and passwords can be put. Metatrader MT4 is the world’s easiest software. You have to install Metatrader4, there you have to add your account, and after that, you can proceed to use it very easily.
Exness is an online trading platform that provides access to the global financial markets. It offers trading services in multiple financial instruments such as Forex, cryptocurrencies, metals and stocks. Exness was founded in 2008. The platform is user-friendly and offers competitive rates also includes fast execution and a wide range of trading tools and resources for both beginner and experienced traders.
There’s an all-in-one app called Metatrader. Now we must have heard of Metatrader MT4. You have to install Metatrader and Metatrader is something where all your IDs and passwords can be put. Metatrader MT4 is the world’s easiest software. You have to install Metatrader4, there you have to add your account, and after that, you can proceed to use it very easily.
Now I have suggested a mobile app for you to use. In this world, there are 2 types of brokers. One is the fraudulent broker and the other is the genuine broker.
So let’s come back to Metatrader4. So there is an app named MT4. Now, this app MT4 is just a body there is no soul. Now we have to put a soul into this body. soul means we have to put life into this hollow body somehow. So the ID and password will be given by your broker company which could be Exness. octa FX, CMS Prime and so on when you add its ID and password, it’ll be active. Now there are 2 things you have to use in this app MT, Metatrader4 and Metatrader5 have popped up. We can open anyone.
It is an all-in-one app for you which supports all companies in this you put MT4/MT5 account number. Your broker will tell you which server to use MT4 or MT5 and by coming here you can reduce it.
First of all, let’s understand the meaning of lot size.
Similar to the quantities like position sizing. We have learnt position sizing in the stock market, so here we have a lot of sizes. Before lot sizes, we will learn what pips are.
“Pip” is a composition of percentage in point or price interest point. A pip is the smallest whole unit price move that a trading charge can make, based on a forex market agreement.
They are a part of a currency pair’s trading rate market repeat. Pips means the change in the echo and value of a position in the market you may have taken. You bought a currency pair for 1.1234 and sold it for 1.1450. Then You made 4 pips on your trade. You have to calculate the value of a solo pip and multiply that by your lot size for the dollar value of your profit.
There are 3 Successful Strategies:
1: Scalping: Forex scalping is a famous trading strategy that is focused on smaller market activities. This strategy requires opening a large number of trades in advance to conduct small profits per each.
As a result, scalpers work to generate larger profits by generating a large number of smaller earnings. This approach is completely converse to holding a position for hours, days, or weeks.
Scalping is very famous in Forex due to its fluidity and volatility. Investors are focusing on the market where the price action is moving to take advantage of variation in small increments.
2: Day Trading: Day trading refers to the process of trading currencies in one trading day. While relevant in all markets, day trading strategy is mostly used in Forex. This trading strategy advises you to open and close all the trades at any time.
No position should stay unlocked at midnight to decrease the risk. Unlike scalpers, who are looking to stay in markets for a few minutes, day traders usually stay active over the day observe and lead opened trades. Day traders mostly use 30-minute and 1-hour time sizes to make trading ideas.
So many day traders tend to base their trading strategies on news. Scheduled events e.g. economic statistics, interest rates, GDPs, elections etc. tend to have a strong effect on the market.
3: Position Trading: Position trading is a long-term strategy. Unlike scalping and day trading, this trading strategy is first focused on a fundamental part.
Small market changes are not considered in this strategy as they don’t affect the large market picture. Position traders are more likely to analyse central bank financial policies, political developments and other fundamental factors to recognise cyclical mode. Successful position traders may open just a few trades over the year. However, profit quarry in these trades is likely to be at least a couple of hundred pips per trade. Forex risk management includes a single activity that allows traders to protect against the problem of a trade. More risk means a big chance of sizeable returns, but also a sizeable chance of serious losses. Therefore, being capable of managing the levels of risk to reduce loss, while maximising gains, is a key skill for any trader to have.
Here are some pros and cons of forex broker:
| pros | cons |
| ⦁ Flexibility: Forex exchange markets provide traders with a lot of elasticity. | ⦁ High Volatility: The forex market is known for its very high time of instability. |
| ⦁ Transparency: The Forex market is great in size and operates across some time zones. | ⦁ Difficulty in forecasting cost activity |
| ⦁ Trading Options | ⦁ Big Leverage |
| ⦁ Transaction Costs | |
| ⦁ Leverage |