Retail brokers and new traders
Retail brokerage and Retail trading are used to describe brokerage services especially designed for private traders. This market has exploded over the last 15 years for a variety of reasons – a combination of new financial services and information technologies. To mention a few, the opening of the Forex market (currencies), internet, good and cheap broadband connections, software-as-a-service, introduction of CFDs, and generally speaking marketing, web, high-speed information, blogging, online charting, accessible content etc.
But the colourful website of Forex, CFD or Spread-betting brokers promote the following:
- Easy money
- Day trading after your main job or activity
- Trade with a few dollars
- Immediate action
The reality which is understood by professionals in the trading arena is that Retail brokers are as good in marketing as they are in a number of finance mechanisms such as trade reconciliation or hedging.
"You and the forex house are now against each other: if you lose, your broker will profit, and if you win, he’ll lose. Since the house holds most of the cards, it has many ways to achieve the desired result."
Professional private traders
A trader aware of speculation promotes the following to his own business:
- Amusement Seriousness and Rigour
- Easy money Grow slowly and carefully
- Day trading after your main job or activity Design your own trading style
- Trade with a few dollars Build a solid funding before running a Trading plan
- Immediate action Research
It is possible to start on good basis
Does it mean that one should never open an account with a retail broker? Not at all. But it means that you must be willing to create a business, rather than opening a gambling account and lose everything.
In order to start, research is necessary, which represents a personal investment in learning platforms, finance concepts, instruments, systems, risk management, creation of a trading plan, just to mention a few.
A private trader who cannot respond to the following questions should not trade….
- What is a CFD?
- What is the difference between Forex and covered Forex?
- What is spread betting?
- What is a stock index?
- What is an index CFD?
- What is gearing or leverage?
- What is a future index?
- Should I trade currencies over a spread betting broker or a forex broker?
- and so on.
He should not trade either if he doesn’t know and understand a number of financial concepts….
- and so on.
And he should not trade either if he doesn’t know and understand a number of trading concepts….
- and so on.
In a few words, be careful when setting up your new business, open a test account with a retail broker and then follow this simple trading pathway: