Please, rightly choose your Broker!
All scalpers, beginners or experienced, need to have an overview of how this area is and how it works. Beyond the scope of making money, known by everybody, it is important to know under what circumstances this passion can be pursued. There are 3 main entities that promote and give access to the trading world: exchange (New York, London, depending on the trading instrument), banks and investment funds (commercial banks) and brokerage houses. Obviously, access is guaranteed depending on the amount of money invested.
A forex scalper will always need to work with a brokerage house in order to have access to a server, a trading platform, quotes and liquidity. Therefore, it is mandatory to rightly choose the broker you work with. In this article you will find out how to choose your broker and to what details you need to pay attention when doing this. Apart from what this person can offer to you as primary conditions to start trading, one big advantage is that if you do not dispose of a big amount of money, a broker can offer lower costs than a bank.
Still, the great job about will be yours, don’t forget that! The broker is only an important factor, willing to give you the possibility, chance and profitability of the forex scalping strategy chosen by the trader. This actor will only create the great environment for your profits, success and gains, while the scalper is fully controlling his / her own time frame for trading, strategies, stop loss and take profit orders.
Technically speaking, what brokerage houses offer to traders are hundreds of offers, depending on his/ her profile. For the day traders and scalpers the business model can be explained simply by the distinction between profit and loss: a tax paid to the broker for his services, on profits and losses. However, the broker remains an important actor contributing to the scalpers success, and this makes the relationship between the two partners a lot deeper than this technical details.
Analyze spreads and offers
As we defined this relationship as starting from the business making point of view, it is important to rightly analyze the offer of the brokerage house. At the end of the day, the broker also has to make money according to your profit and loss.
But the goal of the scalper (short and very short term type of trader) is to obtain profit by repeated short transactions, which is way different from the strategies used by medium to long term traders. Since the scalper will open and close tens of positions during a trading day, the costs will be proportional. So, it is desirable to analyze all the brokerage houses’ offers available on the market before choosing the right one as well as choosing the lowest spread for the currency pair you want to trade. The broker himself, will then be only a matter of preference and intuition.
Scalping is not for brokers, it is for scalpers!
Apart from being the partner of every client, the broker also has to establish some kind of stability between the scalpers, before passing them to the banks. That is why, most of the times, brokers do not appreciate scalping strategies and brokerage houses do not accept scalpers.
Making it short, because of his mission of netting out trader positions against each other in order to maintain liability against banks, brokers do not find scalpers easy to follow. Given the fact that they enter trades that only last a few minutes and are not constant, brokers lacking experience are not able to counter- balance the profits. Add the lack of speed of the servers and the slow outdated systems used by the brokerage houses, profitable scalpers can become the most redoubtable clients. There are not few the cases when scalpers are not liked by brokers, or brokerage houses do not allow scalpers between its clients, because of this reasons.
That is why, successful scalping strategies are not enough for a good scalper, but he/ she also needs an innovative and technologically competent broker as partner. If you have the chance to find with a no-dealing desk broker, he can be all you need.
Advanced trading tools may be the key to success
A good scalper also needs to use improved versions of technical tools, in order to have access to all details he needs existing in the market. For this reason, it is important for scalpers to look for and choose the brokerage houses that offer sophisticated technical packages and show respect for the client’s needs.
Also, it is almost mandatory to have access to simultaneous display of multiple time frames in order to have an overview of all price movements and price action in the same time, in order to have a good money management and to build strong strategical planning.
Last but not least, take care of your eyes’ health and choose the interface and platforms that fit your own needs and pleasures. Feeling comfortable and not having your eyes tired and stressed up after a trading session will give you the force to open new transactions.
Choose professional brokers
Scalpers need support from the broker, in order to have timely execution and precise quotes at his/ her disposal. Not only the systems and modern platforms are needed, but also a highly prepared and competent broker to work with. But remember, the broker is there only to support the scalper, who still has to choose the right scalping strategy for him/ her and use strong knowledge in order to achieve long term profit.
Previous << 6 Essential Scalping Tips For Beginners <<