I have become very suspect about a a number of forex brokers that I’ve dealt with over the past few months who claim to have an ECN forex offering. Obviously trading with an ECN broker is the ultimate as you are certain to receive the absolute best spreads in the market and you may place big trades. It seems to me that there are allot of small forex brokers round the place that have jumped on the ECN bandwagon and are calling themselves an ECN broker when all that they are doing is takinganother brokers ECN price feed and making a market on this price themselves in order to benefit from your losses.

It is often hard for brand new fx traders to have the ability to choose the real ECN fx brokers from the bunch when these days there are so many fake ECN fx brokers out there. To assist brand new fx traders in determining whether or not a broker is actually an ECN forex broker or simply a forex broker taking a price feed from another broker. Below I’ve outlined just a few uncomplicated checks that you can conduct.

Checks

1. Is there a minimum distance that you can place your take profit and stop-loss orders from the current market price?

2. Does your forex broker slow or freeze price updates?

3. Do your fx brokers charts differ from the price shown on your order ticket?

4. Will your forex provider only pass on negative slippage?

5. Does your broker accept orders bigger than 5 standard lots?

Is there a minimum distance which you can place your take profit and stop-loss orders away from the current market price?

A True ECN forex broker will have no limits on the distance which you can put your stop-loss and take-profit orders away from the current market price. Market maker forex brokers apply this minimum distance rule to prevent scalpers and day traders from taking money from the forex broker when trading intraday. True ECN fx brokers do NOT aim to benefit from client losses they are motivated by flow only, meaning the more frequently you deal the more money you make, this is primarily why they charge a commission and will NOT have any limits on your deal placement.

Does your fx broker slow or freeze price updates? In a genuine ECN environment there are tens of thousands of pricing updates each minute this means that the prices a True ECN broker will show should fluctuate quite allot as spreads are set inside the ECN market place. Brokers that are NOT true ECN brokers are unlikely to show all the ECN price updates since it reduces load on their servers, after all they do not need to show all price updates as they are NOT passing on the trades to the ECN environment anyhow but instead warehousing them internally.

Do your brokers charts differ the bid price shown on your deal ticket?

A number of brokers that are NOT True ECN forex brokers adopt a piece meal approach to their Metatrader 4 setup and simply plug in an ECN price feed to their existing NON-ECN Metarader 4 offering. When fx brokers do this it means that the graphs won’t replicate the prices which the ECN price feed shows. This is what one would call a “Sticky Tape Offering” as there has been little attempt shown by the broker to setup their Metatrader 4 environment correctly. Brokers who’s setup exhibits this characteristic are NOT likely to be have a True ECN offering.

Will your forex broker only pass on negative slippage? Various traders think that slippage is negative feature of forex trading, however this is in-fact NOT true. Slippage is quite normal even inside a True ECN environment however the slippage that occurs will work for you in addition to against you. Slippage that works in your favour is often called positive slippage and slippage that works against you is generally known as negative slippage. Unfortunately some brokers take advantage of this and add a couple of pips to the negative slippage and simply don’t pass on any positive slippage at all. A tell tale sign of a fake ECN forex broker is one that does NOT pass on any positive slippage.

Does your provider agree to orders larger than five standard lots?

A True ECN environment is designed to provide traders with deep liquidity from the many contributors. Obviously if a broker is showing ECN prices but is in reality a market maker broker then they will simply not be able to pass on all the benefits that a True ECN has to offer. A fantastic test is to simply place a big trade on to see whether it gets accepted or rejected, a True ECN forex broker will have no problems taking on a trade that is 5 standard lots in size.

I have carried out these five easy checks on over fifty different fx brokers around the globe and my findings were really quite shocking. Out of in more than 50 different forex brokers who claim to be ECN brokers. I have found that there are just eight brokers that pass all five tests and could be considered a True ECN broker. Of these five forex brokers only 3 offer the Metatrader 4 trading platform to their customers.

I’m not in a position to tell you which fx broker fits you best as each forex trader has different necessities, however out of these 3 brokers I have personally chosen to deal with IC Markets simply due to their pricing and very fast order execution speeds.

It seems that the forex trading world may have been flooded with brokers claiming that they are ECN brokers but are they in actual fact ECN forex brokers or just market makers in disguise?. In this short article I’ll try to provide information as to what the difference between a True ECN and a market maker ECN really is. People will think that I am crazy by writing this critique but the fact of the matter is I’m here to help my fellow forex traders by sharing the truth about a few brokers who claim to be ECN forex brokers but are in truth market makers taking on risk against their customers by running what is called a B Book.

So let’s commence by explaining the distinction between a B Book and what’s known throughout the forex world as an A Book. Well to keep the meaning simple, brokers that run a B Book are those that wish to profit from their clients trading losses, in essence they selectively categorise their clients in order to capture the losses incurred by those customers that lose money. A Book clients on the other hand are those that earn money, so in an effort to avoid the forex provider form losing money when the investor wins the fx broker will hedge all A Book client orders.

So how does this all connect to ECN fx brokers? Well a quantity of ECN brokers are not really ECN fx brokers but are instead market makers utilising an ECN broker price feed by running a B Book behind the scenes. This has evidently led to heaps of of controversy and made people ask whether there actually are any true ECN fx brokers out there.

So you don’t get fooled by lavish internet sites and marketing material I there are a few checks which you can carry out yourself which will help you determine whether your forex provider is in actual fact a true ECN. Here are the checks that it is advisable to conduct.

1. Stop order distance from the current market price - True ECN fx brokers will NOT impose a distance stop orders can be located from the present market price. As all fx trades occur within the True ECN environment the forex broker does not care if you scalp for a few pips here or there. Only fake ECN brokers will enforce a minimum stop distance.

2. Trade size limits - A True ECN broker will not put any limit on your deal sizes as inside a True ECN environment there is always a buyer and a seller. A Fake ECN broker will likely restrict your order sizes as they’re taking the other side of your trade, if your order is just too large they might not have the capacity to manage their position exposure to you if you make money.

3. Slippage - Slippage can happen inside a True ECN environment and it can work for fx traders and against them, meaning that forex traders can get better or inferior fills. A Fake ECN broker will just pass on negative slippage NOT positive slippage, they’ll always keep the positive slippage for themselves rather than passing it on to their fx traders.

You should perform these 3 simple checks before trading with an ECN fx broker to make sure they are actually a True ECN broker not a market maker in disguise. I have done allot of testing myself and discovered there are a lot of Fake ECN fx brokers throughout the market place, a good number of them operate in unregulated jurisdictions.

There is one forex provider that I have found to have the best True ECN foreign exchange offering around with extremely tight spreads, that forex broker is Australian regulated company IC Markets.

I have been searching around for a reliable fx trading broker for the past three years. A number of weeks back I came across a few Australian forex brokers that were offering very low spreads. The forex broker that stood out one of the most was a company named IC Markets.

Because I had not heard about IC Markets I made a decision to explore what the company was all about. I was happy to discover that they’re a True ECN broker which obviously is a significant benefit for frequent fx traders and people using automatic robot strategies. They’ve also been around since 2007 making IC markets among the oldest providers in Australia. for me this is a really good sign as it demonstrates that they’ve been able to stand the test of time.

I conducted a few speed tests on their trading platform and found that their execution speeds were less than 100 milliseconds. This is extremely fast in anyone’s words though you ought to be aware that this will also depend on where in the world you are situated.

IC Markets bank with Westpac Banking Corporation and ANZ Bank, both are AA rated financial institutions in Australia and are at the forefront when it comes to compliance with risk management protocols making them two of the most secure banks in the world.

I funded my live trading account with $200 which is unheard of for a true ECN trading account. Most True ECN fx brokers necessitate a minimum starting amount of not less than $1,000. Their prices are spectacular they get down to zero pips although the EUR/USD often has a spread of 0.1 pips. They set my account up on 400:1 leverage and even let me trade micro lots that are equal to 0.1 lots or 1,000 units. This really suits me as I’m fairly new to forex trading and want to trade with smaller lot sizes. I forgot to say that IC markets commission rates are only $3.5 per lot which is the cheapest that I’ve ever witnessed for a Metatrader 4 True ECN.

I am very convinced that I’ve found the right ECN fx broker for my forex trading expert advisor and my discretionary trading. The razor sharp prices combined with extremely low latency deal execution speeds make IC Markets my primary choice for Metatrader 4 fx trading.

Their one-click dealing module is also the coolest Metatrader 4 add-on that I’ve ever seen, the one-clicker lets me to scalp the market much more efficiently and I can see the spread on the foreign exchange pair pair right in front of me on the screen. The also have several really good newsfeeds on the trading platform which helps me when I trade the news, although this isn’t something that I have perfected yet. There are far more order types on IC Markets Metatrader 4 trading platform than on every other brokers platform in the world, this makes a huge difference to me as I love to use OCO orders which Metatrader doesn’t offer in its normal form.

Since writing this assessment I’ve actually found that IC Markets is in fact also the biggest broker in Australia and is the only fx broker in Australia to have a True ECN offering, sadly most of the other so called ECN forex brokers are actually just market makers. As always I never endorse any single fx broker that is why I urge you to try one or two different forex brokers to see which one suits you best. Just be aware when in search of an ECN provider as most will not be True ECN brokers merely market makers in disguise.

Penny shares are traded through the OTC Bulletin Board r the Pink Sheets and cost between 1 cent and $5. You may also trade these stocks via foreign and other securities exchanges. However , when trading penny shares you must be aware about the rules that apply to the trade of penny stocks. The rules set down by the Securities and Exchange Commission (SEC) to help control the trade of penny stocks and shares are as follows:

The SEC needs the broker to have documented proof of the transaction between them and their shopper, which can only happen if their customer is ready to complete the exchange.

The brokerage house must provide their customers with documentation outlining all of the potential risks that are concerned with low priced stock trading.

If there's a market quotation on the penny shares they want to buy the clients must be informed by their broker.

The agent must also reveal to their customers what their commission will be for the trades.

The low priced stock rules also say the brokerage company must also provide their clients with monthly statements that communicate the value of each low-priced share the consumer owns.

The guidelines ruling the trade of penny stocks were established to be certain that trades were fair and that speculators knew about the hazards before investing. These rules were set in place by the SEC to be certain that new investors knew what they were getting into and that they would not get in over their heads.

The low-priced share rules include a Customer Protection Rule (Rule 15c3-3) that states that all of the cash you pay to the broker is in their control. The broker must then intermittently figure what quantity of the money being held belongs to the consumer of has been gained thru stocks owned by the purchaser. If the broker defines that there's more cash on their books than what is owed to their buyer or if the shopper has paid more to the broker than was required then the remainder is placed into a reserve checking account. This cash is then set aside for the categorical utilisation of the purchasers. The rule stops brokers from using a consumers money to advance their own business.

These rules are designed to defend the customers as well as the market and even the broker. Any broker who breaks the SEC’s rules is likely to become the subject of and SEC enquiry which may be trouble for the broker as well as the broker themselves. SO it's vital that any new financier is aware of these rules to be certain that their broker follows them all so that their investments aren't contaminated in any way.

The main way you are going to have the ability to become really successful on the Forex markets is simply by mastering Forex trading basics. That’s why you have to know precisely what it is that you must be performing when you first begin trading the Forex markets each and every day. I am going to educate you on some of these things at this time so that you could get a good understanding of what it is you are trying to accomplish.

So let’s take a much closer look at this subject right now.

One of the first main Forex basics that you should comprehend is that you are definitely looking to buy low and then sell high. The major chance you are looking for is when a currency looks specifically low in value. You are going to want to grab up this currency at this time in time so that you could later on sell it for a diverse currency in which possesses a much higher value. This is how you are making money in the Forex markets so you should know this stuff immediately if you are going to have great results.

Another vitally important matter that you need to understand when first learning the fundamentals of Forex is leverage. If you possess the proper leverage you’ll be able to gain access to a margin that will allow you to manage a lot more value in currency then you probably would be able to control on your own. So absolutely utilize as well as implement leverage in to your thinking so that you can have a chance to make a much more money quicker. Definitely this is your call but I definitely think that leverage would be a really good idea if you’re looking to expand swiftly.

The third trading basic you must understand is actually a personal quality. And that feature is that you have to be a self-starter. These funds isn’t literally going to fall in your lap so you have to make sure you do the work and place in the time if you are going to succeed.

Foreign exchange is not a new concept and not a recent economic activity. In ancient times it formed part of world trade and may have played its part in world activities such as slave trading. Later it became the preserve of bankers and wealthy financiers, but only in the late twentieth century forex trading did become another success story of the Internet.

The Internet allows brokers to operate in mass markets, offering opportunities for millions of small traders intent on becoming big traders. The trade of trading can be learned over time. New players may open demo accounts with fictitious money. Once confidence and expertise has been developed real money can be risked. The word is that successful traders are those with discipline, and that there are such people.

It is in the interests of brokers and their clients that the latter do well and establish growing accounts. This will ensure larger cuts for brokers and the two in partnership against the market will flourish. It is an encouraging feature of the activity that a broker and his client have the same ends in sight, working to mutual advantage.

There must be a catch somewhere in this scenario. It is the high risk of losses. In order to counter this threat the best online forex trading brokers allow traders to start with no capital at all. They can open practice accounts and trade with no risk of losing real money. Unfortunately none can be made either. Nevertheless there is an opportunity to develop strategy and discipline.

The foreign exchange market is global, with millions of users, open through the entire working week. As a result of huge volumes prices between currency pairs fluctuate constantly. However, at certain times when the main markets in New York, Tokyo or London open or close there may be some periods of higher and lower volatility providing opportunities for profit and threats of loss.

Fine art is said to be an excellent investment but profits only eventuate when prices rise. Conversely losses may occur when the market is in decline. The same goes for the property market. In the online forex market money can be made equally on rising or falling prices. This adds to the excitement of trading in it and the excitement is complemented by deep satisfaction if money is made incidentally.

The best online forex trading brokers have developed platforms that are highly beneficial to traders. They are easy to use and as interactive as possible providing good information streams that assist the decision making process. Some also provide generous bonuses and cut administration to the bone in order to make things as easy as possible for traders. After all, they are the bread and butter of brokerages.

The best online forex trading experiences occur when a trader listens carefully to news, watches the charts and then takes a position which quickly wins, yielding a highly leveraged profit. This is not luck, and not gambling. It is much more gratifying to be rewarded as a result of considered and informed action than it is to be rewarded by pure luck such as winning a lotto.

Firstly, penny stocks are stocks that are priced between 1 cent and $5 and they are traded via the Pink Sheets or the OTC Bulletin Board. These stocks can also be traded n foreign and other securities exchanges. However, when trading penny stocks you must be aware of the rules that apply to the trade of penny stocks.

The following rules have been set down by the SEC or the Securities and Exchange Commission and they pertain, specifically, to the trade of penny stocks.

The brokerage house will need to obtain a written agreement regarding the transaction from their customer and their customer must be approved in order for the transaction to be able to take place.

The brokerage house must provide their customers with documentation outlining all the potential risks that are involved with penny stock trading.

If there is a market quotation on the penny stocks they want to buy the consumers must be informed by their brokerage firm.

The consumer must also be aware of the commission charged by the brokerage firm on the trade.

The penny stock rules also say that the brokerage house must also provide their customers with monthly statements that disclose the value of each penny stock the customer owns.

The rules governing the trade of penny stocks were put in place to ensure that trades were fair and that investors knew about the risks before investing. These rules were set in place by the SEC to ensure that new investors knew what they were getting into and that they wouldn’t get in over their heads.

The penny stock rules include a Customer Protection Rule (Rule 15c3-3) that states that all the money you pay to the broker is in their control. Brokers will need to figure out on a regular basis how much of the money they are holding belongs to their customer or was gained via stocks owned by the customer. If the broker comes to the conclusion that there is more money on their hands than that which is owed to their customers or which has been paid from their customers then this money is put into a reserve bank account. This money is for the sloe purpose of being a benefit to the customers. This vital rule helps to stop brokerages from using their clients money to further their own business interests.

These rules are designed to protect the customers as well as the stock market and even the broker. If a broker breaks any of the SEC’s rules that they will be the subject of SEC investigations and that can spell trouble for the brokerage house as well. learning these rules and making sure that your broker is following them means that you will know that your investments have not been compromised in any way.

The advantages of investing in a mutual fund over trying to pick individual stocks is something we have all heard of. First of all, professional analysts that devout many hours of study to the various stocks and are also known as market experts are hired by mutual funds. To study the financial reports, you need to devout a large portion of your free time and unless you are willing to do this, then you won’t have as much information to make a decision as a mutual fund manager.

The well documented advantage of diversification is another thing you shouldn’t forget. You can reduce risk by holding several non-correlated investments. To put it simply, some would go up and others would go down and the return levels off the fluctuations or risk when combined.

Because of mutual fund, rather than having to save a large chunk of cash to purchase 100 shares of stock, smaller investors are offered a chance to invest in small increments.

Given the above advantages, it’s no wonder that mutual funds have become a very popular form of investing. But how does one make a selection since there are about thousands of mutual funds to choose from? Here are a few tips:

Do not be seduced to jump on the recently performing best fund. Like individual stocks, what you want to do is buy low and sell high, not buy high and pray for more growth even though it may seem like it’s safe and rational.

To overcome the force of the overall market, even good funds may not be enough. What you should be looking for are funds that can exceed the broad market without increasing the risk. In each fund, there are risk parameters that it is required to follow. Read the prospectus closely to understand what these are.

Limit the number of funds that you own. Unless you are trying to simply achieve the same returns as the broad market, diversifying into many mutual funds will not reduce your risk or increase your return by much.

Tending to slip in performance are funds that have become too popular and too big. There are several reasons for this.

There is one final point that you need to remember and that is the type of fund being totally dependent on your investment objectives. Whether they are for retirement, income, growth, funding the kids college, etc., there are certain funds that are designed for your objectives.

Forex trading forms a huge chunk of global currency trading across the globe rendering whopping profits to various organizations and banks that actively participate in the process. In general terms forex trading is defined as the buying or selling of currency in the currency market with the help of dedicated online forex brokers.

Typically the leverage ranges between 100 to 200 times. Forex trading operates 24*7 and the currencies are usually transacted in pairs. The pairs may typically be of two different currencies such as Euro-Us dollar pair or Canadian dollar-euro pair etc.

Forex trading operates on the purchase and sale of various leading currencies across the world. However people usually invest in currencies that have higher return on investment. The highest paying goose in the currency market are following currencies Euro (EUR), Japanese Yen (JPY),British Pound (GBP),New Zealand Dollar (NZD), US Dollar (USD), Canadian Dollar (CND) and Australian Dollar (AUD). Like the stock exchange rate the transactions in forex exchange take place through forex rate.

The forex rate is defined as the difference in currency value i.e., the Forex rate for EUR/USD is 1.31 for 5th Feb, 2012. In simple terms if an investor has to buy the base currency i.e. EUR in today’s date for the above pair he needs to shell out 1031 of the counter currency which is USD. Due to constant fluctuations if after few months the above rate turns out to be 1.58, the investor can sell his base currency or the earlier purchased 1000 EUR to redeem 1058 USD thereby registering a profit of 26 USD. When this transaction is done in higher amounts it yields enormous returns to investors.

At a given point of time there is always difference in the rates at which an investor buys(bid) a particular pair and then sells(ask) it i.e., the buying is always slightly higher than selling a particular pair. Thus if an investor buys a pair and immediately sells it, he will lose money in the transaction. This bid/ask difference is usually indicates in Pip or basis point of 0.0001 or less.

A penny stock is defined as any stock that is trading for less than one dollar. Some investors customize their definition of penny stock to indicate certain stocks that fall below fifty cents.

Some consider a penny stock as a stock trading off of a major stock exchange, which is worth less than a dollar. Where the stock originates is not all that important in the definition, since the main defining factor is really the price.

Penny stocks sometimes go by different names. Names such as nano, micro, and small caps, are sometimes used interchangeably with penny stocks. Penny stocks come from companies with a small amount of capitalizations, which means the total value of their company stock.

You can invest in penny stocks with a small initial investment, but you usually have less information to go by when it comes to evaluating the company. Larger companies selling more expensive stocks are required to file reports with SEC.

Although penny companies are harder to research, they offer the opportunity to get the foot into the door of up and coming companies. The amount of research you have to undertake might be greater, but your chances of payoff are equally great.

If you are interested in a penny stock company, you can check and see if their financial information is available to the public. You shouldn’t just blindly believe information about a company you have received from a third party.

If you notice anything questionable, such as if the auditors haven’t certified the company’s financial statements, you should carefully back out. Another red flag is if the auditors have declared that the company may not have enough money to keep operating.

Penny stock investments don’t have any minimum standards for their listings, because they are done on the OTCBB (OTC bulletin board) and the Pink Sheets.

Why are penny stock investments risky? While the cost to trade penny stocks is relatively low, the risk is a bit higher because you don’t have a way to see the history of the company or the stocks and how it factors into your investment strategy.