Q. I wanna trade in currencies...and there are so many Forex account sites on the net that the choice becomes difficult for a guy like me who has so far NEVER traded in currencies, especially in Euros and $$$...

Answer
There are a ton of Forex brokers("Forex account sites") to choose from. The honest truth is that the Forex broker you choose is VERY important to your success. Here are some questions I recommend you ask yourself before choosing your Forex broker:

1) What trading strategy do I plan to trade? If you scalp the market you will need a broker who does not restrict scalping or place minimum time limits on positions. If you plan on trading a carry trade system you will need to research the brokers swap(rollover) rate and find the most competitive broker. If your system usually trades in peak hour times you may want a Broker that offers variable rate spreads while if your system tends to trade off market times a fixed spread Broker may be the best option. Understanding your trading strategy and how the Broker will affect it's performance is key.

2) How large of an account do I plan on trading? If you expect to be trading more than $50,000 you will need a broker with sufficient liquidity to quickly and efficiently get you in and out of the market. These larger accounts are significantly affected by the size of a Broker's liquidity pool. Also, the larger your account the more important "broker financial stability" will be. Choose a broker that has a combination of liquidity and financial stability.

3) What currency pair(s) do I expect to trade? Depending on a Broker's liquidity source(s) the broker may have better or worse spreads on different pairs. For instance, MB Trading usually beats Dukascopy's British Pound pair spreads while Dukascopy tends to have better Swiss Franc pair spreads. Also, Brokers have access to different currency pairs. If you expect to be trading exotic currencies you will need to find a Broker that offers those pairs.

4) ECN/STP or Market Maker? I won't spend time explaining the differences between the two as an entire article could be written on the subject.... but both broker types have their advantages and disadvantages. You will want to research the differences, understand how those differences may affect your system, and decide accordingly.

5) Fixed spread or Variable spread? Some Brokers offer a set spread cost that normally only changes during news announcements. Other Brokers offer changing spreads depending on the demand for that currency at any given price. This choice can be extremely important depending on the strategy you trade and the position sizes you take. If you mainly stick to high-volume market times for your trading than you will probably want a variable spread which often translates into lower overall spread costs. If you get signals around the clock, many times during off peak hours a fixed spread Broker may be better because fixed spreads tend to be cheaper than variable spreads during off market times. It is important to open multiple demo accounts at a variety of fixed and variable spread brokers to compare the difference.

6) Do I want to trade using the Metatrader platform? Metatrader 4 is currently the most common trading platform available on retail Forex. It is wise to open demo accounts using several different platforms to get a feel for each platform and choose the one that suites your strategy best. Some platforms such as Metatrader offer an auto trading feature (Expert Advisor) where the computer executes the trades for you. If you plan on using such a feature either now or in the future, it is important to know the options and limitations of the platform you choose.

7) Do I trade with an on-shore or off-shore Broker? The location of your Broker has important tax and legal consequences. Also, Brokers are regulated differently depending on the jurisdiction in which they are found. Make sure to consult your tax, legal, and financial advisors prior to making the decision.

I hope this isn't an information overload but the Broker you choose is HUGE. I recommend narrowing your search down to 3 and then demo trading all three before choosing. NEVER trade live until you know what you are doing and have practiced for months.

Can any one tell few strategies for forex trading?

Answer
I like a strategy that;

1) reduces the market risks associated with Forex market
2) pays me an interest rate payment 7 days a week
3) takes advantage of downtrends to buy additional shares
4) takes advantage of uptrends to capture profits
5) requires minimal time staring at a stupid computer screen
6) requires less than 1 hour a week to monitor all my accounts
7) can consistently generate at least 7% per month

Oh wait......that's the strategy that I use right now!

Paul Upp
(925) 236-1839