Tag: Professional Trader

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Forex Brokers

The Secrets Behind How Professional Traders Choose Brokers

What the best broker is for you might not be for someone else. They come in many different flavors, although some of them do better than others in all categories. To try one broker you will have to open an account, hopefully, what you get on the demo you get on the real account. Yet it is hard to know if the one you have selected is good for you unless you have some experience.

What the best broker is for you might not be for someone else. They come in many different flavors, although some of them do better than others in all categories. To try one broker you will have to open an account, hopefully, what you get on the demo you get on the real account. Yet it is hard to know if the one you have selected is good for you unless you have some experience.

What the best broker is for you might not be for someone else. They come in many different flavors, although some of them do better than others in all categories. To try one broker you will have to open an account, hopefully, what you get on the demo you get on the real account. Yet it is hard to know if the one you have selected is good for you unless you have some experience.

To get this idea you need a comparison. However, few will try 20 different brokers just to say this one is right. There are so many brokers out there, and most have some part of business traders would probably dislike. When you want to start out trading for the first time, you do not have a clue what to look for and what to avoid in the first place. At some point, you are probably going to get dissatisfied with the one you are with, you will want to find another because you do not like how you are treated.

The decision is so critical that even if you have the best trading system and great results, it is the broker that holds your money. Getting this right is very important so deep research has to be made. This article will present how one prop trader is carefully setting the rules to find the right one, and also some of the example brokers you might find interesting and why they might be good. 

Country-Specific Qualifications

Traders from the US might have a problem with the selection since the regulations are harsh and brokers have an easier time just not to accept clients from this country. This is the first question-stop on your research – do they accept clients from your country? Brokers like it if you stay a long time with them. More trading is done and more chips for them. Clients that do not understand the long game about forex trading get wiped pretty soon. These clients do not leave much on the broker’s table. Traders who follow a money management system, have their algorithm or a strategy are very welcome. Honest brokers want trading-educated customers, unlike the other side where fake investment platforms look for random naïve victim-clients. 

Security First

Investors or clients want security first. Your capital is at risk when you trade, this risk is under the inherent broker risk you take once you deposit. It is an unavoidable risk you want to be at the minimum. How safe is a broker is determined by several factors we are going to speak about. There are no special calculations or analysis, just common-sense conclusions – all you need to stay away from shady investment platforms. The second factor you want to investigate is the Ease of Use. No one wants to have delays, unclarities, frequent changes, unintuitive account management apps, perpetual requests, and so on. You want orders executed without gimmicks, the broker is there to give you just that.

Trading Conditions Matter

After these two most important factors on how to find a generally good broker, you want to have good Customer Support too. When you trade for a long time, it is very likely there will be a problem with liquidity, your orders, slippage, and other abnormalities you want to know more about. More importantly, you want the issue solved as quickly as possible. Most brokers save in this area, professional and knowledgeable staff is not easy to afford and come by. Whatsmore, the broker agents need to understand the problems you are experiencing. You cannot afford to have broker related irregularities unsolved because of the language or knowledge barrier. The final factor some might set as critical is trading and other costs related to your account. Now, when we talk about the spreads, they should be the broker’s main income source and trader’s main expense.

Spreads Matter, Too

Nowadays when we have good competition between brokers, the spread became small enough it is not a deciding factor, even when you trade frequently. If we compare the spreads, the difference is hard to see. If you decide to go with the broker with a lower spread you saw directly from the platform, you might be surprised it is higher in the evening when you trade than with the other broker. Spreads dynamics across time and assets are unknown to you and can only be measured with special tools that need time. Even then, judging a broker based on the spread only is not going to be a good choice, there are other specifics traders are interested in according to their trading style. The days when the spreads were an issue are over, brokers with high spreads got pushed away from business or lowered their spreads to keep the clients. 

Jurisdictions and Regulations

Safety first, then we can worry about other risks. Here is an opinion on what information to pay attention to when assessing how safe is a particular broker. Jurisdictions are a big factor in how a broker can conduct business so you need to pay attention to where they reside. Countries like the USA, UK, Australia, Singapore, and Japan have high-standard control measures that are applied promptly, leaving no room for unethical practices with your capital. Brokers who do not want to mess opening an office in these countries do not put your capital safety first too. Capital adequacy levels are also high here, giving you extra peace of mind. Brokers outside of these countries could also be classified as safe although they will have to fall under ESMA, CySEC, FCA, or other reputable regulatory bodies.

Of course, having regulations on brokers also carry more effort to sign up with them, but it is a good thing to have safety procedures if it means safety to your capital too. On the other hand, countries like Malta, Russia, Costa Rica, Belize, Vanuatu, other island countries, are not very appealing when it comes to funds safety. Not all brokers from these countries are bad, scam, or unethical in another way, they just create precaution since the chances of finding one such broker here is high. Brokers with great offers could go with regulations or jurisdictions from offshore countries just because they do not require a lot of capital adequacy to start a brokerage. However, no matter how good they are, it is better to go with medium and large capital brokers for several reasons. To get recognized, a broker has to stay in the business for some time, more than 3 years. A legit broker can survive only if they have a well-established business plan, structure, and execution supported by the traders’ reviews. All this takes time. Brokers that have the above traits create enough capital to be adaptable to sudden changes, which in turn means they are less likely to pose a risk to your investment. 

Ease of Use

Ease of Use comes after you sign in for a demo account once you establish a broker is safe enough. If you are getting confused with the tools they provide or do not get the quotes you were expecting, how can you be sure other surprises are not on the way? When it is time to make a decision, there is no room to get confused. If you find yourself searching for something for too long, it is a sign of a badly organized platform, website, or other tools. There is a risk it can cost you if you are not well informed with terms or not well acquainted with a particular platform. Some platforms can be promoted as made for professionals with an abundance of options, yet there might be too much to comprehend them correctly. If trading requires too many steps to check and type, it is not intuitively made. This also creates negative associations towards trading in general affecting your future decisions. Most of the brokers will offer MetaTrader 4 or 5 platforms which are enough for the majority of traders. Proprietary platforms should not create obstacles of any kind if they are offered by the broker. 

Another consideration is the execution times. Traders should not only aim for low latency but also consistency in order executions across asset categories. This can be tested with a demo account, however, be sure to check other assets, even if you are not going to trade them. A problem in one could mean liquidity is not a top priority for that broker. If you find out your price levels on orders are not precise when executed, and the issue is not caused on your side, be sure to mark these moments. A broker is not suitable for trading if it repeatedly cannot follow your order specifics precisely. This happening more than once per year is a sign you should think about migrating. Contacting customer service to correct this issue is where we come to the next criteria.

Customer Service

Customer Service can give you an additional headache. Experiencing long waiting times on chat or phone call is a sign the broker is understaffed or many have problems similar to yours. Understaffed customer service department points the broker is cutting costs, and this could further mean inadequate management, capital, or other issues that increase the broker risk. Another sign of this is outsourced, non-native English agents responding to your questions. Communication needs to be flawless when your money is at stake yet many brokers outsource Customer Service and fail to give proper integration. Customers dislike this trend across industries and the right broker knows this. A broker with native English customer support agents is a very good sign you at the right place to invest. 

Crypto Considerations

Since the cryptocurrency era started, a new type of brokers emerged to the scene, offering a very easy sign-up, great trading conditions, almost unrestricted client acceptance, and, unfortunately, very high safety risk. Interestingly, the benefits come by using cryptocurrency for transactions, cutting whole departments other brokers need to have, making it relatively easy to open such brokerage business. There are no safety regulations when it comes to bitcoin transactions, there are no guarantees your capital is safe or stored in a bank. The absolute holder of your funds is this broker. However, the popularity of such brokers is growing. The need for such easy-going trading on a smaller account scale is high. Brokers like this rely on positive client reactions to keep clients coming, the deposits are not as big as with the large and regulated brokers but fill the need of small traders to enjoy trading with all the benefits cryptocurrencies give. 

Security & Safety

The safety research is relatively quick to do. Other criteria such as Ease of Use takes some time to be checked. We will present two examples that fulfill what most traders would like to have with a broker. Starting with the Blueberry Markets, this broker from Australia is one of the top-rated brokers on the two most reputable review websites. They are mid to highly capitalized and backed up by a network of companies. Blueberry Markets follow the minimalist approach, provides hassle-free trading with great customer support and a trading environment. Professional traders like pure trading, no need for any bells and whistles. When you see the Blueberry Markets website there is nothing special, it is very basic except they can show one of the best ratings a broker can enjoy, for more than 2 years.

Trustpilot and Forex Peace Army good ratings are hard to achieve, especially when you have random bad ratings off traders who lost their accounts by their fault. Trustpilot is general but FPA is a forex specialized website, top ratings on both is an amazing achievement. Now, Blueberry Markets is an ECN broker, trading is done via MT4 and MT5 with great conditions, customer support is native English, and is focused on traders’ needs. This broker took a similar business approach to customers like Google, as our professional prop trader describes. When you compare Google search engine with Yahoo or others back then, it is obvious the only thing you see on a page is a search bar and two buttons. Yahoo and other search engines were stuffed with other materials. The simplicity, focus, and investment in what customers need to make Google the best search engine today. Blueberry Markets has the right approach even though some demanding traders might need a wider asset range than offered. 

The second broker example is Markets.com. This very highly capitalized and CySEC regulated broker does not enjoy the ratings like Blueberry Markets. They are worldwide, well known, and has an amazing array of trading platforms and assets for even the pickiest of traders. Having a well-managed company with big capital invested in platforms, assets, and liquidity providers is showing at every step. The sign-up process is not very easy with this Dealing Desk type broker. The website is far from simple, and the platforms will still require you to learn new features if you are familiar with the MT4/5. Markets.com is almost the complete opposite of Blueberry Markets. So many options, offers, assets, platforms might be too much, especially for a beginner trader. There are a lot of tutorials, however, only traders with some experience will like what they see. Markets.com is a great pick once you want to expand from trading only forex currency pairs into a rarely seen array of asset categories. You will have English speaking customer support and in other European languages, good executions, platforms, and additional content. 

Many other brokers fit the criteria we have set. Scam and dishonest brokers also dominate outside them. Having examples and other info above will be enough to guide you to the right one no matter your trading style, just be sure to put the effort into research before you put the money in.

Categories
Forex Basics

Rules That Most Professional Traders Follow

Professional traders are the people that are putting the food on their table with what they make with trading, so they must be doing well. They have gotten to this stage through a lot of dedication and learning. While the learning and time that they have put in helped them get there, they are able […]

Professional traders are the people that are putting the food on their table with what they make with trading, so they must be doing well. They have gotten to this stage through a lot of dedication and learning. While the learning and time that they have put in helped them get there, they are able […]

Professional traders are the people that are putting the food on their table with what they make with trading, so they must be doing well. They have gotten to this stage through a lot of dedication and learning. While the learning and time that they have put in helped them get there, they are able to stay there by following a number of different rules, of course not every trader will follow every single rule, but they most certainly will be looking at a number of them and following them on a day to day basis.

So let’s take a look at what some of rules that the professional traders may be following:

Keeping discipline: Discipline is an incredibly important trait and aspect of trading. Without it anything can happen, trades will be going in left right and centre and they will be going in without any actual reason. Discipline ensures that you will always be following your trading strategies and the rules that have been created by them. Once that strategy has been realised, they must remain on it, any sort of deviation can cause a loss and ultimately cause a strategy or even an entire account to fail. So maintaining self-control and discipline is one of the most valuable traits that a professional trader could have.

Not being influenced by others: A professional trader has their own plan and their own trading ideas. This is why when actively trading, a professional trader will not be accessing forums or chat rooms, they will not be talking to others about their trades, instead, they will be concentrating on their own plan and their plan alone. As soon as they start looking at others or talking to others, the information that they have will start to become muddy, so sticking to themselves and avoiding others while actively trading can be vital to staying on the straight and narrow line.

Updating their trading plan: A trading plan will not stay the same forever in fact it shouldn’t stay the same for long at a time. A professional trader will constantly be updating and adapting their strategies. If you were to just stick with the original plan without making any additional changes, as soon as the market conditions begin to change, then your strategy won’t be able to cope with the changes. A professional trader will constantly be changing bits of the strategy to meet the current trading conditions and to be adaptable to work in whatever state that markets are currently in.

Not cutting corners: A trader should not cut corners, this is particularly relevant when we look at both the analysis and the placing of trades. When doing your analysis, you cannot cut corners, as soon as you do, there is an opportunity that something will be missed, and no matter how small it is, it has the potential to make a good trade go bad. It is the same with making your trades, as soon as you cut a corner and enter or exit a trade without all criteria being met, it can cause a good trade to end up as a loss, so maintaining your plan and following it through completely is vital.

Not always going for the obvious: Sometimes when trading there could be a pattern forming or some news coming out that makes things look pretty obvious, there is nowhere that the markets can go apart from down. However, there have been plenty of times where the obvious has not happened, a lot of political news, economic news, and the consensus can all make it appear that something will go down, yet it continues to rise. This is why you cannot just follow the obvious, further analysis is always needed and you should not just blindly follow the crowd.

Not breaking rules: Rules are there for a reason, they are there to keep you on the short and narrow and to ensure that all of your trades are staying consistent with each other. Your Strategy has set these rules to ensure that you are profitable overall, as soon as you break a rule you are also breaking that ratio that was generated. As soon as a rule is broken, the overall strategy is thrown out of sync. Sticking to the rules is paramount if you have any hope at remaining profitable in the long run. This is why professionals always stick to their rules and very, very rarely break them.

Avoiding the gurus: Gurus claim to have the knowledge that a lot of other people do not. They claim to be able to predict the markets at a greater level to most people, so you need to ask yourself, why are they spouting their information over social media instead of trading it themselves? Professional traders know things, they know that the gurus do not have any more knowledge or information than anyone else and so they ignore them, using your own analysis and information is far more valuable than letting someone else cloud your judgment with their information and analysis.

Regular breaks: One of the things you would have been told about is the need to take regular breaks, a way to clear your mind and refresh yourself for some more trading. Professional traders will often plan their breaks, taking them during times where the markets are a little quieter, this can often be the times near to a market changeover or during times of no active trades. What is important is that breaks are being regularly taken as any professional trader will know that sitting in front of the computer for hours on end is not healthy for your mind or body.

Organising your personal life: If there are issues and stresses in your personal life, it is only a matter of time until those issues and feelings bleed into your trading., Having other things in the back of your mind can create distractions to your trading. Coming into trading stressed about something else can cause you to make mistakes or to cut corners which will only start to lead to losses. It is important that you are able to get your personal life in order so that you can fully concentrate on your trading It can be hard sometimes if you cannot fully sort it, find a way to separate the issues from your trading, so you can focus 100% on your trading when you are there to trade.

Not hating the markets: When the markets decide to move against you, you cannot begin to hate them and you cannot feel like you need to get even with them. The markets do not care about you, and they do not know who you are. You should be feeling the same way about the markets. You are there to make money, not to make a new friend, if they go against you, you need to be able to move on, as soon as you start to want to get back at it, your strategy will go out the window and further losses will be on their way.

Chasing losses: Do not do it, do not do it at all, leading on from the previous points, if you have made a loss, do not try to win it back This is one of the most dangerous things that you can do and simply leads to gambling. Your risk management will go out of the window, how would you chase losses? You chase them by either putting on additional trades or by putting in a larger position, whichever way you do it, you are increasing your risk and increasing the potential for more losses.

Control your confidence: Another aspect of your personality that you need to be able to keep in control is your confidence levels. It is great to be confident as this normally means that things are going the right way, what we do not want is for you to be overconfident. Overconfidence can cause you to take additional risks with larger trade sizes and can even encourage you to take shortcuts with your strategy, entering trades when the criteria aren’t fully met, something that a professional trader would avoid at all costs.

Don’t use too many tools: Tools are fantastic, they can give you a lot of information and they can help you to analyze the markets a lot quicker. The unfortunate thing is that if you use too many indicators or other tools, then you are taking your own thoughts and personalities out of the trading system. If you are not thinking about what you are analysing or trading, then you have no knowledge as to why you are doing it, and no way of adapting should things start to go the wrong way. It is fine to have some tools to help you, but you need to be able to limit them to ensure that you are still fully invested in your own strategy and trading.

There is no holy grail: New traders come into trading thinking that there must be a holy grail of trading, a strategy that can always be profitable and will make you rich. A professional trade knows that this is not real, there is no such thing as the perfect strategy. One strategy will work in one trading conditions but not another, so understanding that your strategy will not always work is paramount to protecting yourself.

Build an arsenal: A beginner trader may have a single strategy, it will work in one condition and maybe on a couple of assets. A professional trader will build themselves an arsenal of strategies, this allows them to be far more adaptable, using different strategies for different market conditions and also allowing you to focus on more currency pairs or assets as each strategy can be optimised for the characteristics of specific assets.

You are not here for a paycheck: Many traders come into trading to try and get rid of their day to day job, while this is a great goal to set yourself, a lot of professional traders will tell you that they are not taking a wage each month, the markets do not necessarily allow for it. You need to work to increase your equity, as soon as you start taking out money, you are taking out your equity, you need to be able to build without taking out capital to begin with. Once you have built up a decent level, then you can start to think about taking some money out.

Simplicity can be better: Sometimes it is the simple trades that make the most profits, there is no point in overcomplicating things with thousands of indicators or little bits of information. A professional trader will tell you that sometimes simply using your own analysis and just one or two indicators is more than enough, as soon as you bring in too much information, it can cloud your judgment and bring in a lot of contradicting information that can completely throw your trading game and strategy completely out of synch.

Accepting our losses: Losses happen. No matter how good you are, you will experience losses. You will always make losses. What you need to be able to do is to accept the, do not let them cloud your future decisions and choices. Every loss that you make should be a chance to learn, why did it go wrong? What caused it to change? There are always questions that you are able to ask yourself that can help you to be a better trader in the future. Be sure not to chase those losses, just learn from them, clear your mind, and move on to your next trades.

Avoid false reinforcement: Sometimes you can be thinking of a certain trade, things seem to be going ok, but there are a few bits of your criteria which are not being met, hearing other say something similar can give you the reinforcement to take the trade, unfortunately, as your criteria still have not been met, it is false reinforcement, you should not use what someone else has said to overrule one of your trading rules. Trust your own strategy and analysis, and don’t take reinforcement from those outside of your own strategy.

There are a lot of rules there, some things you are probably already doing, something probably not. There are of course additional things that raiders do on a day to day basis. It is important that you set your own rules that you need to be following, it is important to create your own, once you have created them, it is vital that you stick to them. Your rules of trading are how you trade and why you trade, create them, stick with them, be successful with them.