Broker to Trading

Forex trading is speculating on the movement in value of a Forex pair (two currencies valued relative to each other). Traders use various means to try and gauge whether the pair will increase or decrease in value. For example, because a pair is one currency valued against another, then the trader can look for signs that one currency will strengthen or weaken, based on fundamental analysis of the currencies' underlying economy. Traders may also use technical analysis to try and gauge the direction a pair may move in.

When placing a trade, one important factor is the leverage used. Forex tends to have the highest leverage offered, as the underlying movements in value are relatively small. The amount of leverage determines a number of features of a trade. Firstly, it may at least partly determines whether a trader may place a trade or not in a particular pair. Increasing leverage can decrease the amount of capital needed to open a position, all other factors being equal. However increases leverage exposes an increased amount of the trader's account capital to adverse moves, as increased leverage can allow the trader to trade with larger trade sizes, which can have a higher pip value per move.

Forex is a complex market and it can be expected that a traded move will move against the desired direction, even if it eventually moves in the way expected (which it may not at all). Thus the trader needs to have sufficient account capital to comfortably absorb retracements against the move. With high leverage, the trader may be able to take positions but with insufficient capital, thus defeating the purpose as they get stopped out or worse a margin call.

However leverage used sensibly can give the trader flexibility when trading. One way to use leverage more sensibly is to trade with smaller trade sizes, i.e. to reduce the cost of the trade and the value of each pip movement. With higher leverage the trader can trade with smaller account sizes, but the caveat that the trader needs to take account of the capital required to weather adverse moves in the trade. These brokers are chosen because they are well established brokers, which are regulated in the country they are based and offer high leverage for Forex trading.