Dear Scalper,
Please, rightly choose your Broker!
Sincerely, Investazor
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.
