Risk management always go hand in hand with forex. Why? Since forex market is all about risk, it is risk control that tells how far a trader can go. The concept of risk management in trading currencies is a concoction of ideas (hedging, lot size control and stop loss) that traders find far from difficult to learn. However, it is also as hard to apply in the actual forex situation.

It is important to know the survival strategies in forex because this melting pot of currency traders is very volatile and impossible for a single factor to control. Cutting on trade lots is one strategy. Basically, there is no specifics that determines the correct lot size but always, it is safe to begin trade with a smaller lot. Every trader has his own risk tolerance though, so it all boils down to how much you can spare to lose.

The use of a stop loss is quite difficult to use in a forex trade. It is meant to end a trade when it shifts its weights against you and you start losing money. In every trading, a stop loss should be used at a price where it is very likely for the trade to turn against you when marketed at. This will overcome the reduced profit when using stops and is more effective compared to targeting other traders’ stops.

Setting a stop loss can be in two different style, depending on what type of forex trader you are. Flexible forex traders will find it more comfortable to put stops at prices which they think will change the atmosphere, that point where they will begin to lose money. The reason behind this tactic is you will always have an easy escape when the tide turns against you.

If you are a system forex trader, mastering system trading method is for you. Stop loss and indicators, or stop placing at ratio determined prices are used in this forex trading method. As a rule of thumb, when indicators provide the most advantageous trade end, the placement of stops is based on them.

In cases where an exchange is down, stop orders are useless. Protection comes only in the form of hedging, which is essentially making a secondary forex trade that protects the open trade. Hedging methods vary and you can choose among them depending on what trade you have open.

The purpose of this article is to give an overview of risk management concepts in forex trading. For a more detailed information, you can visit this page: forex

There are a number of forex brokers in Australia to choose from, having choice is anadvantage but it can even beextremely confusing especially if you are new to forex currency trading. In order to save you precious time I figured that I would discuss my experiences withthe several types of forex brokers and which kind I prefer.

The most crucial things to watch out for when selecting a forex broker is to figure out what kind of broker they are – There are generally three types of brokers: market-makers, straight through processing broker (STP) and ECN brokers.. Generally it’s the market-marker or STP brokers that spend plenty of money marketing to have new clients, the reason behind this is because they often take advantage of client losses. DMA or ECN brokers however pass on your entire trades to an investment bank which means that they do not hold the other side of their client’s trades, these types of forex brokers often charge a commission on each trade instead of a widened spread.

Sadly in Australia there’s almost no option if you’relooking for a DMA or ECN broker. I have got accounts and traded with all the forex brokers in the nation and have only identified one real ECN broker in Australia on the contrary you’ll find around 10 market maker or STP brokers available.

I’m not about to take the trouble labeling the market-maker and STP brokers that I have traded with but let’s just say that they all are the same, they market themselves as having tight spreads and high leverage however the troubles are often the same, sluggish performance, re-quotes, server failures, slippage, stop placement limits, stop hunting, and the list keeps going. Stay away from the issues that will undoubtedly develop in case you do business with these kinds of broker and choose a DMA or ECN broker.

DMA and ECN brokers have no secret agendaand always put in efforts to make you more successful at the time you trade, they don’t have limits on stop placement plus they do not limit your trade sizes either, there aren’t any re-quotes and executions rates in many cases are a lot faster as compared to any other type of broker. It’s for these reasons that trading with a DMA or ECN broker is the only choice for active forex traders.

After searching everywhere I’ve found only one forex broker in Australia that is an actual ECNIC Markets is the broken that I’m telling you about.. I’ve traded with IC Markets for more than twelve months now and have hardly ever had any issues with, order delivery or speed, spreads are tight and are often zero that is fairly common with ECN brokers. I can trade 50 standard lots with no troubles, a sale this size can be impossible to place using an STP or market-maker broker. Due to the tight spreads and deep liquidity scalping with IC Markets is a trader’s dream, this is just not possible with any market maker or STP broker.

Obviously I’m able to only attest to ICMarkets from my own experience, I usually recommend that you test drive their platform by yourself and find how IC Markets ECN forex offering is best in Australia.