DD and NDD Types of Forex Broker

Forex broker is a part that can be an institution, agent or individual where it stands to meet the seller and buyer party. It is for sure that the product that they sell is Forex / foreign exchange or we can say it as international currency. Broker in Forex trading can be divided into some different types. If you wanted to choose the right brokers, you have to understand about each broker and its function.

Below is the explanation that we will share about the various types of brokers in Forex trading?

1. DD / NDD Broker

Commonly, there are two main kinds of broker in Forex; the Dealing Desk (DD) and No Dealing Desk (NDD) broker. Sometimes, the DD broker is also called the market maker broker, meanwhile the NDD broker can be divided into some brokers such as the STP or Straight to Processing broker and the combination between STP and ECN or Electronic Communication Network.

DD Broker gets the profits from spread. We can say that this kind of broker creates a market and their own exchange value for the clients. Maybe you will thing a manipulation here in this system, but it was not. Market maker is still providing the sell and buys and they don’t care about which one that will be chosen by trader.

What makes this broker good is that usually they offer great facilities such as high leverage up to 1:1000, free of interest, small spread (sometimes it’s even fixed spread), interesting bonuses, up to the possibility of deposite and easy withdrawal through the third party. The lack of this broker is that this broker has a market maker. It means trader is not seeing the real rate foreign currency that is happened in the interbank market. Besides that, usually they are also taking an opposite position with the traders.

The example is that if you open the buy position of EUR/USD for 1 standard lot. To fulfill that order first DD broker will try to find the order sell in pair and with the same size from the other trader. By doing that way, they decrease the risk possibility. However, if there was not match order, so they will open the opposite position with you. Every forex broker may have the different risk management. It means that although you now that a broker is DD type, it is better to ask them whether they do it or not.

Meanwhile NDD Broker literally means “without passing through the dealing table”. This broker is a true bridge between trader and interbank market. Spread in NDD broker cannot be fixed because it is based on the market price and usually it is bigger than the DD spread. Furthermore, usually NDD broker is not fighting back the trader position. Besides those forex broker types, there is also other type. It is the hybrid type which is the combination between DD and NDD forex broker.

How to Choose the Right Forex Broker?

We knew that Forex broker has an important role in a forex trading. That is why; it is really essential to choose the right broker, whether from the facilities that are given and from the other aspects that we need. However, choosing the right broker is not easy. Why? It is because nowadays there are a lot of brokers that are available that offer many interesting things such as the deposit value, leverage and many more.

So, how to choose the right broker in a forex trading? Below are some tips that you can consider.

1. Choose a broker with a complete service based on your need

Every broker has its own rule, services and facility and it is different between one and each other. That is why; first of all you have to own the list of some brokers that serve the trading in your own country. Then, re-check for it by visiting their website. By doing that way, you can observe the services that are given and what offer that they give. After that, match it with your wants and needs.

2. Pay attention to the safety factor. Make sure that a broker has a legitimate permit

In choosing a forex broker, security factor is the most important thing that must be your main priority. By choosing good broker, it can guarantee your money and it is also a good step to avoid the bad broker to steal your money. For ensuring the security aspect of a broker, you need to check whether a broker own a permit or not from the related institution. Make sure that the related institution is legit and act as a regulator for many brokers in your country.

Furthermore, a legitimate broker usually will have a segregated account in which when we put our money there, our money will be not directly transferred to a broker’s account, but it is on the third party. It means that broker will be not having even a change to steal your money. You have to be careful with the illegal broker that is still operating and usually this kind of broker will offer a really competitive price and fare to attract a lot of clients for doing the trading forex with them.

3. Getting the recommendation from the person who you trust

The last tip is getting the recommendation from people that you trust who have ever deal with choosing the right broker. It can be the best advantage for you. You can ask your family, friends or joining the related forum about this thing.

Those are two main tips that you can follow and do to choose and get the right Forex broker. Joining a trading forex is a business that full of profit, but you must be paying attention in choosing the right Forex broker. It can give many advantages for you such as to protect your money and also to give you a lot of knowledge about Forex trading and everything about that thing.

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What You Need to Aware in Creating an Account in Forex Broker

Before doing the forex trading, Forex broker will offer you to make an account and the different transaction detail. In fact, there are some things that you need to aware and know about this. Below are some things that you need to pay attention.

1. Choose a Forex Broker with flexible initial deposit

A well known broker is usually offering big deposit for its clients, but usually it can be withdraw. You can choose a broker that offers a flexible regulation that can suit the capital with deposit’s requirements that are offered.

2. Offering easiness for deposit and withdraw

Choose a broker that has all the easiness in doing the deposit and withdrawal process. The insertion and withdrawal process should be able to do in only a day. That is why; please be careful with a broker that offer more than a day for that process, especially for a broker that offer a really long time for that process. It can be an indication that they use our money for the other activity.

3. the lowest spread, commission and swap

This point can determine the amount of profit and loss that we get when we do a forex trading. The example is that if a broker offers a commission of $50, spread of 5 pips ($50), so when we open a position we have to look for 10 pip profits ($100). It just for returning our capital and the rest is to look for the profit. Besides that, make sure that the swap is based on the rules.

4. Choose a broker that offer the most varied currency

In a forex trading, as much as options that can be traded, it is much better. It is an anticipation to play on the other market if a market is stalemate. The major currencies that are commonly used are EUR/USD, AUD/USD, USD/CHF, USD/CAD, USD/JPY and GBP/USD.

5. The best platform of METATRADER 4

Because we choose an online system, we have to choose a broker that provides a trading platform in the shape of METATRADER 4. Besides that, please make sure that it has good connectivity so it can avoid the off quotes or a condition when the platform is not working well.

6. Quick facility and Services and 24 Hours Online

Choose a forex broker that has good facilities and services, starting from the telephone, office, customer service, email, marketing contact and many other things. Please make sure that they also give 24 hours X 5 active days to give a help for their clients. It is better as well if a broker has skype, fax or chat facility so clients can ask for anything and at anytime.

7. Good Reputation and Popular

You can visit some forums, blogs or website that discusses more about forex broker because usually it is honest. Watch for the experiences from the other users and notice a popular forex broker with the best services and facilities. It can be your priority, so you will get the right broker. 

Some Important Forex Terms that You Need to Know

Forex Trading contains some terms that you need to know in order to make your activity is easier. Some essential terms in Forex Trading are like the forex broker, Real and Demo Account, leverage and many more. Below is the further explanation about each of those terms.

1. Demo Account and Real Account

Before doing the Forex Trading straightly, you can test the performance of a broker and its ability by using its demo account. This demo account is usually free. In this account, you can trade with the un-real money. It means that profit and loss will not make you lose your money or get the real money. If you felt that you are ready enough to do the real forex trading, you can start to open or create the real account. Usually you need to do some required deposit that will be used in a real buy and sell transaction where the profit that is gotten can be withdraw to your bank account.

2. Metatrader

The trading activity is done through software (special trading platform). Mostly the platform that is used is Metatrader or MT. The newest version is MT5, but the MT4 version is still good and stabile enough.

3. Technical Analysis

It is a way to decide the market movement by doing a study of the past data by using mathematic formula.

4. Fundamental Analysis

It is a way to decide the market movement by analyzing the politic and economic issues of a country. It is because those issues are taking a special role in moving or deciding the currency’s movement.

5. Pair

Pair is the currency pair that is traded. The example is EUR/USD which means the currency pair of Euro and US Dollar.

6. Lot

Lot is transaction unit in forex. The standard size of lot is $100,000. The mini lot is $10,000 and mikro lot is $1000.

7. Pips

Pips or Price Interest Points is a unit that is used to calculate the price change or we can say it as the profit and loss calculation.

8. Leverage

For every 1 transaction lot, trader must have at least $100,000. This is a huge amount and it can be a serious obstacle for the retail trader with limited fund. Leverage is leverage with the fraction of capital trader can use 1 lot.

9. Money Management

Money management is an important part that takes role for a trader’s succeed. Forex trading has a high risk and we need a management to manage that risk. The aim is to press and decrease the loss. Some factors that need to be considered in this money management are like the capital amount, account types, lot size, trading frequency and risk exposure.

10. Forex Broker

Forex broker is a company that acts as a connector between trader and world money market. Through this broker, trader can do the online buy and sell transaction. Broker is also a place where trader opens the trading account, sending the deposit, doing the buy and sell transaction and withdrawal. 

How to Minimize the Loss in Forex Trading

Besides knowing the role of Forex Broker, it is also important to know and understand about the loss. Online Forex Trading is a kind of business that can give massive profit chance in a short time. However, in the other side it can make you lose a lot of capital in a short time as well. That is why; it is important to you for learning about Forex trading in detail before doing this business straightly in a real condition. If you are a beginner in Forex trading world, below are some tips that you can follow in order to minimize the loss in this trading.

1. Don not be over confident

This mental attitude is always happened in most newbie traders where they are too confident in doing the Forex trading. That attitude can be dangerous because sometimes you don’t know exactly about the thing that was happened in the money market. Confident is important in forex trading activity, but try for not too confident.

2. Don’t do the “Over Trading”

It is not wise if you did a forex transaction excessively or exaggerating without having a clear calculation that is related with the capital that you own. This action can bring you to a big loss instead of getting your desired profit. Forex is a margin system in which risk of loss is the real thing. That is why; it is really essential to consider wisely about the amount of lot that you will trade. Commonly, the usage of 10% from your capital to do the open position is enough.

3. Using the Stop Loss

Don’t be scared to use the stop loss feature for avoiding bigger lost. Sometimes traders are not sure enough when a position had already touched the stop loss, but accidentally price is moving back to the direction that they predicted. Vice versa, when the stop loss was erased what was happened is that market is making bigger floating? At every condition, we recommend you to always use the stop loss in your trading activity.

4. Don’t use too high Leverage

Leverage feature is an aspect why Forex market is too interesting for many people because they can get a lot of chances to do the margin trading or leverage trading. It means that although you just have a small deposit, it wills possibly you to open the trading position with huge number although it is accompanied with bigger loss as well. That is why; use the leverage option wisely.

5. Know your market better

One of the common mistakes that are always done by the newbie traders is pushing themselves to open the real account and start trading without knowing the detail of currency pairs that they trade and how the global issues can make an impact on that pair. To avoid the lost, you need to learn as much as possible about how the money market is impacting each other and connected. Learn for the other thing as well such as about Forex Broker. 

The Secret in Forex Trading when the Market is flat

When the market is flat or ranging, some traders in Forex broker will try to buy in a low price and sell in a high price. Although it looks so simple, but in fact there are some tricks that you need to understand. Below is the further information about the secret that you need to know when the market in a flat condition.

Trading Range Helping Tools

Trader who uses the ranging strategy is usually taking an advantage from the price pattern in the graphics and technical indicator. They use it as a helping tool. They can use that tool to help them in maximizing the sell or buy chance. Usually, trader will identify some supports stages and resistance to make it as a level reference of buy or sell price. This thing will make a market when it is in a ranging condition happened between two parallel horizontal lines. Those lines are support and resistance lines. In that area trader can look for the profits from the price condition in ranging movement.

Ranging Price Movement

Sometimes price moves between two parallel lines (support area and resistance area) for some days and sometimes in a week before breakout is happened. To try for getting profit in that situation, most traders who open the sell in resistance level or take the buy position in support area. Besides that, stop loss level can be above or under the support or resistance level to limit the risk that can be happened and make sure that the loss can be minimized if price was doing the breakout movement.

Ranging Price and Breakout

A momentum which is happened mostly is when price was moved breakout with a huge power and it was succeed to break the resistance and support level. After that, price is usually moved to the next target of movement with the same setup with the vertical distance between the lines that are projected from the price level before breakout is happening. If breakout was happened in the upper side (resistance), you need to add a step by measuring the breakout stage to get the profit target level.

Some traders will make use of that chance by:

1.      Buying in the dip area when the price is trying to move upward or vice versa

2.      Place the stop loss position when the price is in ranging movement

3.      Placing the take profit level.

4.      The example is that if the price is moved breakout, it means there is a possibility to BUY. Trader usually will measure the breakout level to decide the stop loss position and take profit level

5.      However you have to remember that it needs a certain skill to analyze the technical price movement. That is why; a continuous and consistent exercise must be done. For trying to practice that system, you can join the demo account that is provided by a Forex broker. Besides that, please be discipline so that this ranging trading system can work better and better. 

Important Steps to Become a Successful Forex Trader

Forex Broker – With a high risk, Forex market is a dangerous war area and it full or risks, especially for you who did not have an enough strategy and knowledge about that market. Instead of getting a lot of profit from a Forex trading, you can be a market’s victim because of your wrong action. That is why; you have to learn many detail things about Forex market. Below is the further explanation.

1. Knowing the Forex Trading

Forex market is a kind of trade that sells and buys the currency of a country with the other currency from the different countries. The transaction in Forex trading involves the Forex market from all over the world for 24 hours nonstop and 5 days in a week. Knowing the trading times is quite important because you will not be able to trade if you did not know the schedule. The interesting thing from that Forex trading schedule or time is some Forex traders recommend to do a transaction in certain times. The example is that just doing a transaction after the Europe trade time was opened because it has higher Volatile.

2. Learning about Forex Trading by using the Demo Account

In a Forex demo account you can learn about the transactions in Forex trading activity. You can learn of how to do the buy or sell open position, how to use the Forex indicator to do the trading analyze and many more things again. So, by using the demo account you are not only learn of how to know the Forex market directly, but also learn how to be a true Forex trader before later you will do it straightly in a real market.

3. Knowing the Movement of Traded Currency

You need to know the Pair Characteristic or currency pair because each pair has the different characteristic. The example is that EUR/USD and GBP/USD, both has the different characteristic from the volatile aspect or from the transaction aspect.

4. Looking for the information and understanding the market condition

In a Forex trading, you may not be only focus in a chart that was displayed in your monitor display. However, you need to know all the information that is related with the money market. That is why; before doing the open position it is better to look for much information first.

5. Choosing the right Forex Broker

Choosing the right Forex broker is an essential thing. You need to choose the trusted and good broker. You need to know about their offered facilities such as the way to deposit, withdrawal, spread that is used, margin leverage that is offered and the other important thing is that whether they provide the demo account or not. Besides that, the trading platform that is used must be matched with your needs. The example is that the availability of chart or graphic as your facility to analyze the market. The platform that is used by a Forex broker must be easy to understand as well. 

5 Essential Things to be considered by Beginner in Choosing the Right Forex Broker

If you are a beginner in Forex Trading world, it is better to create an account in a forex broker that is friendly enough for beginner. It can be a perfect step to learn about Forex and it is also good anticipation if someday you are really ready to fight in forex trading world. However, there are 5 essentials things that you need to know and consider in order to choose where you will open an account and about which broker that you can choose.

1. Low Minimum Deposit

This feature is important for you who had been already finished your learning process in a demo account. Maybe you will feel that you are ready to step into a real account after succeeding to make the consistent profits. In fact, it cannot be the only sign that you can reach your success in a real account as well. That is why; please note that it is really dangerous if you are straightly placing a high deposit in your very first time of using the real account. Choosing the low minimum deposit is the wisest way that you can consider.

2. about Leverage

Low minimum deposit triggers the need of high leverage. It is not completely wrong, because high leverage can provide more chances if you just have a low capital. However, the characteristic of leverage is like two sides of sword. It means that a high maximum limit is not always giving an advantage for beginner. High leverage can be only managed by them who had already known about margin and leverage risk.

3. Low minimum lot

The size of trading is also important to be considered when you choose an account’s type from a Forex broker. As bigger as the lot, as higher as the risk that you can have. Commonly, beginners are not interested in standard account that is offered because at the present time there are a lot of brokers that offer some trading solutions with the suitable lots for beginners such as micro, nano or even cent.

4. Forex Learning Guide

This feature is varied in types and it can be an advantageous feature as well. Forex learning guide from a broker is not always in the shape of Forex School, online course or private guidance, although some brokers are still offering it. However, nowadays some other guidance types such as webinar, seminar, e-book and exclusive trading tutorial video are more loved by the beginners.

5. Simple but be able to fulfill your needs

Simple here means for more specific things such as web broker display or for something that is more common like the whole broker component. Maybe there is a time when broker has the extra facilities and ignore the simplicity aspect and make it far from the beginners’ attraction. Too much tools or added indicators are not necessary. It is because a Forex broker can be classified as a qualified as good one as long as it can fulfill the traders’ base needs. 

Legality and Regulation of Forex Broker

In choosing a Forex broker, a problem that is commonly appeared is how to choose the right broker among thousands of online brokers in all over the world is. In the past, we can only see the limited amount of brokers, so trader is almost having no obligations to be selective. However, with the development of global interest to forex trading, a lot of new brokers appear with various kinds of types, services and also the cons. Some of those brokers are good enough, but unfortunately some of them are not secure. Some are worked professionally, but some are stealing their clients’ money. In order to choose the right forex broker, you need to understand those situations, so as a trader you can choose the right broker.

Below, we will explain many aspects and information that you need to know such as how to choose the right brokers and also about the brokers’ regulator that has the important role as well. So, check this out.

How to choose the right broker then?

Choosing the right broker with secure system and that is offering the best services is maybe not a piece of cake. One of the easiest ways to choose the right broker and the safe broker is by gaining as much as information about a broker’s regulation. A broker that is well regulated usually follows the standard and rules that are made by the related regulator.

Then, what is the “broker regulator”? In a simple way, it is an organization or legit financial institution under the government of a country; the better a regulator, the better and stricter rules that are followed. Broker cannot be operated with unclear standard because there are the threats of punishments that can be imposed if a broker violate the regulator’s terms. Broker can get a warning, punishment up to losing its operational permit or license. What forex broker regulators that are incredible and can be trusted? In this case, some institutions in a modern country like NFA (US), FCA (England), ASIC (Australia) are usually becoming the main options. You can use it as your main consideration as well.

Types of Forex Broker

After knowing about the legal and safe broker that you can choose, it is also essential to know about the types of broker that you can choose. There are some types of forex broker that we can know. Those types can be your consideration in choosing the right broker. In fact, there are three main choices that still exist until this time. Those options are no dealing desk, market marking and the electronic communications network brokers.

It is for sure that each type has the different aspects for many things. They have the different handling of transactions and also the different executing orders aspect. You have to know each other in order to choose the right broker. In order to give more information to you about these things, we will explain those types of Forex broker completely in our next article. 

What “Forex Broker” is and everything you need to know about it

Forex Broker is maybe not too popular for many people, but in fact it is an essential thing that you have to know especially if you wanted to learn about Forex trading. Basically, Forex Broker is a part that can be an institution, agent or individual where it stands to meet the seller and buyer party. Then, the next question is “what product that they sell?” It is for sure that the product that they sell is Forex / foreign exchange or we can say it as international currency.

In a worldwide trade activity, a currency exchange is always happened. This activity had already happened from many years ago when the economic relationship between one to the other country is bounded. Starting from that development, the forex is also developed really well nowadays in all over the world. Below is the further information about that thing.

Why we need a “broker” in Forex trade?

In fact, forex trading activity is dominated by big banks in all over the world. Doing a direct transaction with those banks is almost impossible for individual trader. Besides that, that transaction is only could be done in massive number. In the other words we can say that the transaction standard can’t be reached by the small scale trader like us.

Here is where broker in Forex is needed and taken its role. Broker will manage each individual trader so that they can join the forex trading. Broker will sent the request from trader to bigger broker. That thing happens continuously so that each trader’s request can be accommodated in a massive and bigger market.

Besides that, the other role of broker in Forex trading is to provide software and the other tools that possibly the trader to do an online transaction through the computer, laptop and other gadgets. That is why; trader can access the forex market by only using certain program or through the browser. That transaction can be done at anytime and everywhere.

From where does a Forex Broker have its Profit?

Each broker has different rules in making a fare of their services. However, usually they will charge you a commission fee and or spread. Commission fee is a commission that is gotten by cut your income (in dollar currency). This fare is done for every volume that is done by trade. Meanwhile, “spread” is the deviation between bids and ask. A broker can impose both of those things, but there are also some brokers that only impose one of them.

Usually, the amount of spread is based on the kind of currency pair that will be traded. Spread can be valued around 2 – 3 pips for the main currency pair that always be used like EUR / USD (Euro to United States Dollar). In the other side, the commission fee is varied based on the kind of Forex broker. In fact, Forex broker is important in a forex trading activity and it can be a perfect solution for small or individual trader.