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How to Find Select Online Forex Broker Dealers

May 23, 2008
Your choice of online forex brokers is no longer limited to firms that allow you to start trading with a $1000 or even $250 account. Forex dealing firms, known as forex brokers, that will let you open a trading account with such small sums of money may not be a good choice. Why is this? Because most forex brokers who accept such small amounts of opening deposits are not entering your forex orders into the international forex market place.

These firms are often acting on their own behalf with orders and are taking your trades directly onto their own books. They are acting as the counter party to your trade. They know that forex traders starting out with such small amounts of money will probably end up losing that money. Since they are the counter parties to your trade when you lose they win.

This is very much the way a gambling casino works. In a casino you are always playing against the house and the house always enjoys a small edge. Over time that small edge means that the casino will end up with your money unless you are extremely lucky. Not only do you have to be extremely lucky to win over the long run but you also have to be smart and disciplined enough to quit after a big win.

Since many online forex brokers work in this manner you need to be careful when opening an online forex trading account. If you want to give forex trading a go and only have a small amount of risk capital to open an account with you may want to go ahead and select a broker that accepts small deposits. Just be forewarned that the playing field will not be as level as is desirable for your financial health.

In recent years with the popularity of online forex trading growing large highly reputable banks have established forex trading facilities for smaller forex traders. While the starting capital is larger, usually in the $3,000 to $10,000 range, you will benefit from working with first class dealers and players in the international forex markets.

Spreads will be tight and you can trade fast moving markets without frequent requotes taking away the advantage of speedy executions. In addition, you will benefit from the free use of advanced forex trading platforms.

You can now open a retail account with the number one forex dealing bank in the world. The minimum account size is $5,000. The bank also offers a $50,000 play money demo account that will allow you to test their trading platform.

The bank feeds real-time streaming prices into their trading station. Prices update dynamically tick by tick with the slightest market move. The dealing rates you see are not an indication of where the market is trading, but of actual prices at which the currency pair can be bought or sold on the trading station. Spreads are offered from as low as 2 pips under normal market conditions.

To find major banks that welcome smaller retail forex trading business run a Google search for "forex trading banks" or "forex retail dealing banks" and the like. If you plan to make forex trading into a business venture that has a good prospect for success you will gain an edge by using the services of first class forex dealers and forex brokers.
About the Author
Gerald "Taipan" Greene is a retired forex trader and portfolio manager who worked in Asia for over 20 years. The nickname was acquired in Hong Kong and is now used for a number of financial, political, and Internet business related blogs. One of them is at Forex Trading Guru
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