Foreign Exchange Services

Guide to Foreign Exchange Services

Find the forex services that best suit your trading needs
By Colleen Dixon

Foreign currency is traded globally, around the clock, and foreign exchange is considered the most widely traded security. Foreign exchange companies operating online account for a large portion of foreign exchange transactions.

The means to realizing profits in foreign exchange transactions are rapid market fluctuations that occur in minutes rather than days. The foreign exchange market is usually traded in a short or intermediate time frame, rather than a long one. Finding foreign exchange services that are reasonably simple to use will help you feel more at ease with each foreign currency exchange transaction.

Each foreign exchange provider offers various indicators to gauge market trends. Research the companies you are considering to verify which indicators they provide, if that information is available. Bottom line, your comfort level with the foreign exchange service you choose should be sufficient that you are confident you will be successful.

Here are questions to consider when choosing a foreign exchange company:

1. What do other traders think about various foreign exchange services?
2. Is the foreign exchange provider regulated?
3. Are funds insured against fraud or bankruptcy?
4. How fast are orders executed?
5. What is the minimum balance required to open an account?
6. What is the minimum trade size?
7. Can you earn interest on any unused equity in your account?

Action Steps

The best contacts and resources to help you get it done

Learn about global currencies Online foreign exchange services usually offer news and data in real-time, as well as constantly changing price charts. Potential traders can choose which currencies to pair in their transactions.

I recommend:  Get currency forecasts, past rate charts and real-time quotes on Exchange Rate.

Distinguish what business model forex services operate Different foreign exchange companies utilize Market Maker, ECN or NDD business models. Find out if orders are manually or automatically executed, and the maximum trade size allowed before customers are put on manual execution.

I recommend:  Among the better-known foreign exchange providers are Forex.com and ForexKnowledge.com.

Foreign exchange transaction services rated Compare various foreign exchange services.

I recommend:  Learn about many different aspects of competitive foreign exchange companies on GoForex. The independent ratings of various foreign exchange transaction services are included, and their money exchange software is reviewed.

Tips & Tactics

Helpful advice for making the most of this Guide

• Take time to practice. The foreign exchange service you select should have a 14- to 30-day trial period, during which you practice using fictitious money. Try out different trading strategies to see what works and what you need to change to have an acceptable risk level.
• Beware of foreign exchange services claiming to guarantee returns or declaring high percentages in accuracy. Remember, there is no such thing as a free lunch.
• Always be aware of risk and make a plan for risk management-accept the fact that you will not always come out ahead on each of your forex trades. Your trading capital should be an amount that will not seriously impact your daily living if you should lose it. In short, only risk what you can afford to lose.