What is Foreign Exchange?
The foreign exchange market (also known forex, FX, or currency market) is a form of exchange for the global decentralized trading of international currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock.
Why trade Forex?
Comparebroker has prepared a list of best forex brokers. You can read the reviews, highlights, and features of the top forex brokers for 2013. You can look at the spreads, trade platforms, execution, customer service and mobile platform.
If you are considering currency trading, you should be an experienced trader who can handle financial losses. Forex trading is risky and is not suitable for most investors. If you have been an active day trader, you likely have the skill set applicable to exchange successfully, or at least possess a rational understanding of the risk involved. It is prudent to keep in mind that market maker forex brokerages are not motivated to help you turn a profit. Quite the opposite, in fact. For the most part, brokers collect money from you regardless of whether you gain or lose, so they have little motivation to help you make money.
When selecting a broker, you need to consider whether the broker is a market maker or an Electronic Communications Network (ECN) broker. For the most part, market makers are considered the more nefarious of the two since some have been known to manipulate spreads artificially for their own gain. The more honest market makers only make money off the actual spread between the buying and selling price. ECN-type brokers usually just charge a commission but do not make money off the bid-ask spread, so they are not motivated to manipulate spreads. Be sure to read all fine print and contract details before opening a new account.
While choosing a forex broker, you must pay an emphasis on the following chracteristics