CHOOSING THE BROKER BEFORE STARTING TRADING

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Before you choose a Forex Broker, we will provide you with information about knowing your broker. In general, there are 4 types of forex brokers most often used by traders in trading or forex trading, which broker Conventional, Non Dealing Desk (ECN / STP / DMA), Dealing Desk, and Hybrid.

Forex trading can also be done in the way you go to your bank or to the exchange (money changer) to deal with the physical money. The traditional way of forex trading it is called the conventional (non-online), which is certainly a lot of limitations and is not realtime. On this page we only discuss and introduce the types used for Bertading broker Forex Online (non-physical), ie:

BROKER NON DEALING DESK

That is a broker for which the order is forwarded directly to the markets, financial institutions and big banks, or to another broker. Usually spread in Non Dealing Desk broker type is both volatile (volatile) depends on the actual market. Non Dealing Desk broker type is suitable for professional traders, because it is very fair, without manipulation and user betting against the real market and not against the broker or dealer. Non Dealing Desk broker type is divided into three, ie ECN Broker, STP Broker and Broker DMA.

ECN Forex Broker (Electronic Communication Network)

At ECN broker type is the user can jump directly and participate in a real market in which participated also mingled with other participants in the market such as the Bank, Government, Institutions and Individuals Trader where they interact Sell and Buy it simultaneously without any intervention from the broker or dealer (dealing desk). Usually the only brokerage firm to benefit from commissions or mark-ups of spread. At ECN broker type used condition is a condition that occurs in the real market and no artificial. ECN Broker working with buyers and sellers bring significantly (via online, real-time), and not against broker / dealers Buy and Sell in doing it.

STP Forex Broker (Straight Through Processing)

Broker type serves as a bridge connecting to another brokerage firm as likuiditornya. Usually the broker's order execution STP type is passed on to the big brokers (large institutions) or to some ECN brokers. But if the order of the STP broker forwarded to broker a manifold Dealing Desk Brokers STP then the order of these depend on the broker who headed it. Broker jenis ini berfungsi sebagai jembatan yang menghubungkan dengan perusahaan broker lain selaku likuiditornya.

DMA Forex Broker (Direct Market Access)

Forex Broker DMA (Direct Market Access) that is a broker that works almost the same as ECN broker type, but the difference in DMA broker is under contract with a particular liquiditor.

Often the brokers (especially those who are not legal or regulated / unregulated) calls with ECN or DMA STP, but basically somewhat different, because the STP broker is using the other as a liquiditornya (thrown to another broker), so the execution and everything from broker STP is the kind of quality RELY liquiditornya broker and quality connection path routing. While in the type that really ECN broker is not thrown again into another broker, but directly to some large banks (multi inter-bank), the other trader, and that brings real market sellers and buyers directly WITHOUT the intervention of a broker dealer or croupier (no middle men).

BROKER DEALING DESK

That is a broker that they made a separate market with its own conditions they specify (Market Maker). In this case the user trading against the broker or dealer. Basically dealing desk brokers benefit from the defeat of the user should be, so that when the user makes profit the broker will be paid from cash on their own broker (not purely derived from actual market). When you trade in kind Dealing Desk broker, make sure you put your funds in a legal Dealing Desk broker and registered (regulated) by the government as a broker and have reputable.

Market Maker is not always bad, as long as they are properly regulated.

Because the Market Maker means they can also create a market of its own user should, therefore, called Market Maker (Market Makers).

So the elements of BUY and SELL Market Maker broker is actually taken from the buyers and sellers from a collection of their own users, but if the volume is not sufficient then the brokerage firm then menghandlenya (but should not be cheating / naughty). Usually this can be done at the broker who has a number of users that are many and sufficient volume, of course MUST be properly regulated as well (there are government agencies that watch) so that they operate and conduct business in accordance with legal regulations and does not harm the user / customer is. So the Market Maker FOREVER BE BAD, provided regulated properly.

Regulation correct and credible broker for a company with international marketsie (make sure registered in the category of broker / FCM): NFA, CFTC, FSA, ASIC (see more regulation in the list). Dealing desk brokers are often referred to as dealers (dealers).

Broker Dealers consists of two types:

Big dealer, Brokers usually have this type has a good reputation and a registered legal (regulated) as a brokerage firm (Futures Commission Merchant or FCM) as regulated in the NFA, CFTC, FSA, and is not located in a remote or obscure. Just as you are playing in a casino then you should look for such a large casino in Macau or Las Vegas. It is intended that if you get a profit then certainly the broker can pay your winnings and deposit your funds remain safe investment. Because in a regulated broker's dealing desk there is a regulatory agency (usually local government) which aims to control or ensure that the broker has done its job well and do not cheat the customers.

Small or Broker Dealer Unregulated (Bucket Shop or broker pavement, which is usually located in remote / Offshore). This type of broker is a broker that you should avoid, because they are potentially huge for manipulating your transactions or act fraudulently so you will easily defeat that should not happen. Generally bucket shop broker is not permitted as it should be, and only licensed as a regular corporation or other (not as brokerage firms) and this is often mislead potential customers who still lay.

The characteristics of broker bucket shop is located in places that are not obvious or remote (offshore countries that are not clear) and unlicensed regulations properly (this is usually done). Besides other features of the bucket shop broker is they are 98% sure let him transfer money to third parties / individuals, or use Voucher, may use Liberty Reserve, registration is easy and seem haphazard and WITHOUT adequate verification, then there is a limit or prohibit a particular trading techniques (such as scalping, martingale, etc.) there is also a bucket shop broker that allows all kinds of trading techniques as in the system is already installed an automated script that can inhibit these techniques (the script usually called Virtual Dealer). The conditions offered bucket shop broker is often beyond the normal condition of the real state of the market, such as the leverage is too high (eg 1:1000), low spreads that make no sense (example: 1 0 pip pip fixed even fixed, whereas in actual market spreads is always changing or fluctuating continue every second), and there are also big bonuses goal is to trap the customers to want to put their money (which in the end is to "eat" the croupier cheating). Be wary of brokers who offer these things too bombastic or bonuses that looks very attractive, because the larger the bonus then need to watch more closely, rather than later caught and you will incur a loss that is not comparable with the bonuses offered.

These things are usually done by fraudulent brokers ie manifold Bucket Shop: excessive requotes, slow order execution, if exposed to TP (target profit) but otherwise it is difficult to be executed if exposed to SL (stop loss) it is easy to execute, the server often down, the manipulation of the price quote, eliminating transaction unilaterally profit under the pretext of illegal trading, withdrawals are often detained or can not be done, that statement is not true, and fraud matters (Scam) others. Be careful with statements from the broker bucket shop that often provide false and misleading statements about their system, as they claim that they are ECN broker type, DMA or STP but the fact that they are applying Dealing Desk bookie even worse, it is simply intended to deceive the eye and attract the general public in order to trade in their place, when in fact they are NOT ECN, DMA or STP true. Therefore the role of regulation SUPERVISION IS VERY IMPORTANT that the broker or brokers for not arbitrary and does not give false statements to mislead the public.

Similarly alert Award and the awards they claim (usually done by illegal brokers & Bucket Shop for attention). Example: as the best broker. The award does not guarantee the broker is safe. Also check from which institutions give ratings company. Search in Google about the credibility of the company's rating. Examples Prime4x a scam forex brokers also previously claimed to be "The Best Broker 2009" when the rating agencies are institutions that are not credible, and the proof is in fact a scam broker and carried off customers' money. Be careful also with the rating of the purchased (or the term corruption / bribery), and also be careful with that as if it were an award when it was just a web advertisement broker that writes itself, but is made as if it were an award of the media , but it's not (never happened in a broker is claiming rewards from CNBC, but after investigation it turns out it's just advertising articles written yourself). Alert to the tricks of "naughty" and statements / advertisements that are not true of illegal forex broker.

HYBRID BROKER

Broker is a combination of types of brokers ECN / STP / DMA with Dealing Desk broker. Hybrid brokers generally have a rule in the throwing order or by the type of account used. For Example: If you are Lot size, or frequency, or below the value of your equity XXX then you executed at the dealer, but if the above is to be executed on the type of STP or ECN or DMA. Actually it is difficult to know that the broker is including hybrid type or not. It is just that you can see the try or on the basis of the reputation of the broker and regulations.

DEMO vs LIVE ACCOUNT

In demo accounts are not the same as the actual account usage (live account), so if the conditions in your demo goes well then it does not guarantee that your real account would be the same, especially in that type of bucket shop broker. So to know the right broker then be tested through live account conditions.

And also check the addresses of HEADQUARTERS forex broker you want to use (not the address of IB, Agent or Resellernya), whether their head office is located in a remote country, PO BOX (mailbox only) / leased, the address is not clear (from the offshore ), or in the good repute. It is important to look before you fall into the forex broker or company that is not true. TIPS: Here is the link from the CFTC website CFTC .gov (U.S. government) the financial condition of major financial firms including premium Forex companies that are transparent and audited regularly. (if the company your Forex Broker included in the list of the CFTC, then we can be sure they are safe. Because the the cost to be listed in the regulation of the NFA/CFTC in category FCM requires at least $ 20 million., and if violated, they could potentially lose $20 million (IDR Millyar.200), so they are safer and higher quality than those not listed). Be careful with the Regulation or Licensing false false can outwit, which sometimes also dipampang by the broker bucket shop (though it's not the actual regulations).

Hopefully this information can be useful and you avoid being stuck in the bucket shop brokers that spreads.
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