Forex trading

There are many dealers with online access to be found on the world wide web, both legal and illegal. Many offer the same services and access to the market, but their policies and procedures might differ. Therefore, every trader must chose his type carefully.

Beginners need to be very careful, as the market allows a lot of trading services, which are not suitable for beginners, to operate on the market.

Different levels of the Forex market are represented by each type of broker, ranging from a high level with direct access to a lower level with little or no access to the market at all. We will cover the different types of brokers below.

Beside the account types listed below each Forex Broker handles a user value. Mini accounts, managed account or full accounts are the most used terms. The accountt ype stands for a deposit you'll make. For example: If you deposit $100 you will be a mini forex trader, if you deopsit $1000 you will be a moderate.

When you are new to forex you could try to have a managed forex account. In this case someone from the forex company will trade with your account for a fee. This system is quite the same as investment advisor. For more details check your Forex Broker.

Bucket shops
Since this type of broker's legality is questioned, it's not suitable for beginners. The shops use currency futures and options, have no connection to the market, and - in fact - bet against the trader.

Book makers
This type is much alike a bucket shop, only the book maker doesn't make a profit by winning the bet. His profit is determined by the difference in the buy and sell price of the trade, called the spread. This is what gave them the name spread betters or spread betting companies. In addition, there is no connection to the market and the book makers are forbidden in the United States and many other countries.

Retail market maker
Despite the fact that this type of broker represents most brokers on the market, they do not provide the same services and access to the market. A lot of traders chose this type and is also suitable for beginning traders. Nevertheless, one most be aware of the provided services. In the United States and most other countries, this type of broker is legal.

Institutional market maker
This type of broker has the most direct access to the Forex market and is very suitable for beginners. You can be given more direct access to the Interbank market, when you are willing to pay a larger sum of money.

Institutional Forex
As only banks can participate in this type of broker, it is not suitable for beginners. If any other broker grants you direct access to the Interbank market, he does not play fair as the market is not open to individual traders. Furthermore, institutional brokers have direct access to the market and represent 50% of all Forex trading.

Now you can see, that only four of the five mentioned markets are open for individuals. From these four, the Retail market maker is the most appropriate one. Within this type, there are a lot of different types and they are easy to find. However, one must take a look at the services provided by the broker he selects. But don't chose a book maker or bucket shop, as they are illegal.