Did you know that most Forex ”brokers” are not brokers and also that there is no such thing as a retail Forex broker. There are only ”Forex dealers” that retail traders can deposit money with. Forex brokers only exist in the interbank market, which we can never access.

However nobody in the retail trading industry uses the correct term so from now on, although I will also use the term broker please note that I am referencing the Forex ”dealers” that take our money and allow us to trade Forex.

When you really look underneath the hood of the Forex brokers marketplace you see a lot of things that are surprising. The broker marketplace is a multi billion dollar entity. A lot of people make a very lot of money running a brokerage.

All that money is made off us, the retail traders. There is something called an ”interbank market” where the big players trade. Most of the volume in the Forex marketplace is in that interbank market. The rest of the volume, which although relative to the bank marketplace is small, is still in the billions of dollars, and it comes from us retail traders. So even though we make up a small fraction of the volume of Forex trades, because Forex is a Trillion dollar daily market, our contribution is still huge and is in the billions.

Consequently over the last 30 years an enormous opportunity has arisen for businesses to make money off us. The problem is that the market is so big that it is impossible to efficiently regulate, and this has led to a lot of people setting up apparently reputable ”brokerage” firms, which are in fact questionable businesses hell bent on squeezing as much money out of us as they can.

Now…please don’t be alarmed by this as I believe that from a risk management perspective Forex is the safest market to trade if you are a retail trader. No other market allows you to make money taking such low risk. But I need to differentiate between the ”safeness” of trading Forex versus the ”safeness” of trading with one broker or another. Because whilst there is no doubt in my mind that we are far better trading Forex than stocks, bonds or commodities, that safeness only applies if we also use a broker who is financially stable and big enough to withstand any headwinds in the economy. Frankly the majority of brokers do not even pass that test, and many of the ones that do still fail the ”integrity” test. By integrity I mean that they operate in such a way that they do not ”manipulate” their platform to maximize their profits. 

So the pool of ”brokers” to choose from that, in my opinion, meet all the criteria that allow you to sleep at night knowing that your money is safe, is small.

If this all sounds a bit scary, I have you covered. I have recorded two video sessions about brokers lasting 3 hours . I go through absolutely everything you need to know to make the right choice.

To give you an idea of how in depth the sessions are here are some of the points discussed:

• Slippage and how to minimise it
• Dealing desk / non dealing desk
• How STP (straight through processing) is used fraudulently in the industry
• ECN
• How to check if a broker is shady
• The safe regulatory countries
• FX spot contracts
• CFDs
• Differences in the U.S broker marketplace
• How the interbank market works
• What a prime broker is
• Counterparty risk
• OTC
• How orders are executed by brokers
• Broker vs dealer
• A book vs B book orders and the Hybrid model
• Liquidity providers vs liquidity retailers
• How brokers hedge and why you need to know how your broker hedges
• ”Testing” your broker
• Stop hunting

…and that is not an exhaustive list.

You can be the best Forex trader in the world, but if you do not do your due diligence with brokers, and you end up depositing funds into the hands of an unscrupulous broker, you will probably come unstuck. I have made sure in the two sessions that you will have the knowledge to prevent that happening.

The two sessions are a FREE bonus that come with my Forex video training course.

I also have a 1 hour video above that in itself will help you well on the way to choosing a good broker

Regards

Mark Boardman