How to Choose the Best Broker

I want to share something on Brokers, something I learned the hard way. But I hope this will help you learn a little faster, a little sooner, and not have to worry too much about learning from the school of hard knocks like I do.

A broker quite frankly, is not your friend. Let me just explain. I thought that when I began, now I know, they are not. Don't make this mistake and listen to the few little tips to watch out for.

First of all, there are several different levels of trading privileges, depending on what size of account you have, depending on how much experience you have and a broker can tell when you talk over on phone, whether you are brand new, you are nervous, if this is your first account, or if you have been here for a while, around the blocks a few times.

When you are talking to the broker, you must always remember, no matter how nice they sound, no matter what promises they make, no matter how they advise to open up an account with them, always understand, if they are retail brokers or market makers, these are not your friends.

Most of the people I talk to don't understand the basic, simple little fact about their broker. Most of them are surprised and shocked to know that when they take their buy position, their broker is taking the sell position on the other side.

When the broker takes a sell position, he gets instantly entered into. That broker is no longer interested in the spread fees from the trades you enter in the market. Spread fees are miniscule.

They are nothing compared to what they are going to make when you lose your account. Now, you think, does the broker really want me to lose my account?

How are they going to make money that way? How they are going to keep making spread fees that way? You must understand, market makers which are the retail brokers, the vast, vast majority of brokers that are available to the small, little guy out there, who's the new guy.

These people know the odds. They know that the Forex market, in which I am possibly trading, is a very high risk market.

In fact, they know that the vast majority of new traders, if not all of them, are going to lose their account within 45 to 90 days and sometimes even less.

You need to know, they play the odds. That broker is no different than a bookie. He is taking your bet, because he himself is betting against you. You are going to lose, he is playing the odds.

And when you lose that account, he would rather you lose it to him, then to someone out there in the cyber space. However, he doesn't his make his spread fees anyways, because your account is empty.

So, why would he instead be advised to make spread fees, if he can make your entire account! Why not offer you a $300 bonus to set up a $2500 account. When he knows that he is going to make that bonus back anyways.

So just remember the retail market maker or that retail broker is not your friend and you must learn how to compensate for that issue if you are going to become a more successful trader. Hope this helps make an informed decision when choosing your broker!

Quote of the Day: "When you have God and money, everything other thing will fall in line."—Sam Awa