Truth and myths about forex brokers
It's common to hear a lot of different opinions about what Forex trading is and how currency brokers work.
Many traders claim that the majority of brokers only want to take their money and do not have access to the foreign exchange market.
Their main goal is to deceive the gullible average person into their net and extort money from them.
What is the reality of the situation and which of the existing opinions are myths and what is really true?
In order to understand the essence of the issue, you should have some idea of the work of the Dealing Center and its earnings.
So, let's move on to an overview of the most common myths among novice traders.
Which Forex myths might be true?.
1. All brokers are shell companies – without access to a real exchange, in practice, things are not quite so simple. The majority of brokerage companies are introducing brokers, which are branches of large financial groups.
The only drawback in this case is the delay in order execution, as another intermediary is added to the trading process. However, thanks to modern technology, this delay rarely exceeds a few seconds.
Why create a fake platform, spend a ton of money on advertising to attract clients, and then shut down? The costs of opening a brokerage are so high that you won't be able to recoup them for at least a year.
The only ones that raise doubts are options brokers, namely those companies that specialize only in options trading. It so happened that I personally encountered the disappearance of more than 10 companies in 5 years.
Therefore, if you want to trade options, choose only from trusted companies - http://time-forex.com/brokery-opcyonov
2. The broker drains deposits – this statement is fundamentally incorrect; the trader drains the deposit themselves, and the broker can only help them a little in the event of technical problems.
Draining a deposit is fundamentally unprofitable for any DC, as the spread can earn much more than the principal amount of the deposit.
Moreover, if a client discovers obvious foul play, they will never return to that company and will spend a great deal of effort creating a negative reputation for that broker.
The validity of this judgment can be easily proven using a specific practical example:
You have a deposit of $150, which is sufficient to open trades of 1 lot, with a minimum spread of 1-2 pips or $10-20. You've made a certain number of trades in a day totaling 15 lots, resulting in a commission spread exceeding the amount in your deposit, and you can trade for several days or even months.
3. Fixed spreads are truly a myth, as the spread value can easily change several times without your knowledge. Just install a spread indicator in your trading terminal and you'll see for yourself.
4. Bonuses aren't a scam – they're always available, but very difficult to withdraw. While they are credited, the profits are immediately available for withdrawal, but to withdraw the main amount, you'll need to trade a certain number of lots. Typically, the terms and conditions specify a withdrawal amount of $1 to $5 per lot.
That is, after making a 10-lot trade, you can withdraw between $10 and $50 in bonus funds. A pretty fair rule.
5. Large capital – many believe that trading Forex requires a lot of money, but this is only partially true; it all depends on your needs. A few hundred dollars is enough for additional income, and a few thousand for the main one.
Don't forget about attracting investors either. PAMM account managers often trade hundreds of thousands of dollars, while their personal funds are only $1,000. For information on opening a PAMM account, see http://time-forex.com/pamm/pamm-upravlyushiy
Not everything is as sad as it seems at first glance, myths exist, in order to refute them, everything is in your power, the main thing is desire and perseverance.
