We offer instant fills*, 2 pips spread* on majors and $100 start up capital* Be aware of the broker asterisk! The retail forex market is still relatively young and is becoming increasingly competitive. Brokers are fighting for your business and offering the most attractive spreads, instant fills and even some start up capital are their main marketing weapons. However you should be aware of the small print when considering these offers rather than taking them at face value. There is no such thing as a guaranteed instant fill and the small print will tell you as much. Expect to read that during times of increased market volatility the sheer volume of orders and speed of price fluctuations make it impossible to guarantee fills. Simply put this means that you are likely to experience slippage. This is part and parcel of trading so it is very important not to expect perfect fills, especially at times of high volatility. By altering expectations new traders can avoid unpleasant experiences and reduce the chance of getting burned by the market. Offering a fixed spread of say 2 pips is subject to the same restraints as instant fills. During times of high volatility such as news announcements market dynamics can cause the spread at the interbank level to widen naturally. If a retail broker offers a fixed spread then they are not able to reflect this in their quotes. The result would be multiple re-quotes for their clients because the prices they are displaying do not exist in the market. Alternatively a retail broker can abandon a fixed spread structure during news times. This gives them more leeway to execute client orders. However, the degree to which the spread is widened is often much greater than natural widening at interbank level. This has the effect of dissuading some traders from entering the market and at the same time the extra premium makes it harder for those that do enter to book a profit. A fixed spread is a brokers means of collecting some profit on every trade without having to charge commission. In recent times retail clients have begun to recognise the limitations of the fixed spread model and have switched to ECN style brokers who claim to offer direct access to interbank prices. ECN brokers charge commission per trade based on the size and frequency of trades. Start up capital is a relatively new offering and as you may expect it is not as easy as opening an account, making a deposit and receiving a free $100. The start up bonus is not available for withdrawal, (for at least the first three months if at all) rather it can be used as margin or to subsidise client losses. There are usually some qualification criteria such as minimum initial deposit and number of trades per month. These factors guarantee the broker a certain amount of business from the client making the proposition financially viable and very profitable (statistically 90% of all traders lose money and it is common practice for brokers to take the other side of client positions). Also be aware of There are certain statements that should not be used in context with forex trading. Anything that uses the word easy or attempts to bring your emotions into play by compelling you to join the thrill or experience the rush should raise little red flags. No form of trading is easy and the foreign exchange market is no exception. Without going into too much depth regarding trading psychology, emotions should be checked at the door every morning before trading begins.
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