Jan 102011
 

Forex Trading during news can be extremely dangerous for the account. As recently as Friday, the market has fluctuated in 80 pips and caused loss of all those who had no coverage for the fluctuation margin. Market was expecting an increase in the dollar (and a drop in euro), but turnover was somewhat unexpected, given previous economic data. Calculations of a prudent trader should cover, and yet such a fluctuation margin of 50%. That means your account must have the equivalent of 80 + plus 40 pips to be ready to assume a possible loss.
Market chart

Feb 192010
 

Before making a choice for a broker be careful for few things:

  • Verify where is registered the company (the most companies are registered in off shore zones)
  • Check if you find details about the company, physical contact address (not PO Box)
  • Check if someone answer to a call and what kind of informations is giving
  • Check if is acredited and regulated by a trusted authority (like NFA)
  • When you deposit money to a forex broker, be careful where you deposit money to discover that not reached the right place. Generally prefer wire transfers that do not find that pulling the card more than you paid to cover margin excuse.
  • Better start with a demo account or smaller amount to understand very well how it works and if have bugs or strange things on the platform
  • Research on the forums and searching engines about the details and comment left by others

Be aware that trading scammers are everywhere on the web. They will appear to be a legitimate business. They will be pleasant and well spoken. Their leaflets, emails, letters and order forms will often look professional or official. Scammers are persistent and persuasive and try to rush you into making a decision. They may also target junior employees who may be less aware of the existence of scammers.