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Forex traders need to know about their forex brokers if they want to really start trading forex trading. There are many myths and scams that need to be exposed. Many retail forex traders are too simpleton to understand the games the forex brokers play with them.

There is a difference between the interbank forex market and the retail forex market. Interbank forex markets are where big players like banks, multinational corporations, hedge fund and other institutional investors operate. The size of the transaction in the interbank market is large due to which it is not open to small retail traders.

The internet revolution made retail forex trading possible. Anyone can open an online margin account with a forex broker and start trading forex from the comfort of his/her home. But the problem is this that retail forex market is loosely regulated. Being not well regulated lets the forex brokers do whatever they like with you.

You should be beware of those games. You need to know the following facts while trading forex:

Nontransparent pricing: Since, forex market is over the counter market with no clearing central exchange, the prices that your forex broker quotes to you is the price that you get. It is really difficult for you to know whether the quoted price is fair or not. You have to just accept it.

Use of Leverage: Your forex broker will love you to use a high leverage like 100-1 or 200-1 in your trading. Since most of the small forex traders are unsophisticated, they easily overexpose themselves and get wiped out in the market making gains for the broker in return.

Brokers trade against you: Since most of the retail forex trades are too small in size, forex broker is not immediately able to offset this position in the interbank market. This provides them the chance to trade against you. Most of the retail traders dont know how to trade. So you lose and your broker wins.

Unfair practices: Just like Casinos, Forex Brokers dont like winner. If you are winning too much, your forex broker may resort to denying the service to you or complicate execution of your trades so much as to make it impossible for you to trade.

Once you know these facts, you can use a scorecard for evaluating different forex brokers. Bill Poulos, a veteran forex trader has developed one for you. Visit my Blog to read about it.

Forex trading can be risky, but it does have huge potential for you to either make a lot of money or lose a lot of money. If you have been around the market awhile you will realize that not all Forex Brokers are equal, and in fact some border being just plain rip off merchants. This can be a major turn off for many new investors, the fear of being rip off by a Forex Broker. So how can you find a Great Forex Broker?

The great news is that there are some awesome forex brokers in the market. A good place to start is finding Forex Brokers as a referral or through a company that knows a lot about forex brokers. Recently the CFD FX REPORTresearched all the Forex Brokers and have found who they believe to be the best.

Now if you don’t feel comfortable with that and you want to do all the hard work of researching brokers yourself, then here is a list of things to look about when looking for a great Forex Broker.

1. Find and validated the companies reputation- See what license they hold

2. Make sure they are tied to Forex legitmatly

3. If the company has just started stay away, they maybe fly by nighter

4. What sort of spreads do they offer

5. Do they offer stop losses?

6. Do they requite your orders? If the do stay away

7. What is the slippage?

8. Where is your money held? If it is not through a reputable bank stay away

Most importantly whatever broker you start with, start off small, test the waters these are just some of the research that CFD FX REPORTuse when looking for a Great Forex Broker.