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What is a forex dealer?
A forex dealer provides online trading services to allow individuals to speculate on rapidly changing foreign exchange rates. Forex Dealer Members (FDMs) are regulated by the CFTC and National Futures Association in the United States, as well as by national and local regulatory bodies where they conduct business, and are held to stringent business and ethical standards


How does forex trading work?
Many U.S. and international companies provide online trading software and services for individuals (traders) who want to speculate on the exchange rate differences between two currencies. In doing so, these speculators buy or sell currencies with the objective of making a profit when the value of the currencies changes in their favor, whether those fluctuations derive from market news, supply and demand principles, or geo-political events taking place throughout the world. In addition, the forex market is available to trade 24 hours a day, 5.5 days a week, allowing traders more freedom to trade when they want to, not just when an exchange is open.

Popularity of forex trading
The growth of trading OTC foreign exchange (known as retail FX or retail forex trading) has more than doubled from 2004 to 2007. Many financial experts suggest this growth curve is projected to continue well beyond 2010. What has led to this phenomenal growth? Innovation, competition and consumer demand.

The public has recognized U.S. forex companies as leaders in technology, with three of the leading forex firms named to the Deloitte Technology Fast 500[1], a highly regarded ranking of the top North American technology companies, for three consecutive years. The leading U.S. forex companies have also been named to the Inc. 500 list of the country’s fastest growing companies. In 2006, the top FX companies made up nearly 20 percent of the total number of financial services industry firms on the Inc. 500 list[2]. It is apparent that Americans have embraced this growing market, making foreign exchange one of the fastest growing industries in the United States.

Forex Scalping
Forex scalping is a trading strategy in which the trader makes dozens or even hundreds of trades daily, looking to capture a few pips per trade. Generally, scalpers stay in trades for less than a minute, bolting as soon as their position captures a few pips.
Brokers do not look kindly upon scalpers, as many times scalpers will exit a position before the dealing desk has time to deal your order. This means that the brokerage has to eat the position—a successful scalper will consistently earn money—money that comes directly from the brokerage’s pocket.
To avoid this conflict of interest between scalpers and the brokerages, scalpers often trade with electronic communication network (ECN) brokerages, which circumvent the dealing desk allowing online traders to trade directly with one another. ECN brokerages usually have less liquidity than traditional dealing desk brokerages and charge a per trade commission, but their pip spreads are narrower.
To be a successful online Forex scalper, traders must follow strict risk management rules. Because the scalper grabs only a couple of pips at a time, one big loss can wipe out dozens and dozens of careful, meticulous trading. Traders should be sure to use stop loss orders, ensuring that the profit/loss margin on each trade is very small.

History of the Foreign Exchange
Until the mid-seventies, major industrial economies were governed by the Bretton Woods agreement of 1944. The Bretton Woods agreement—which was named after the location of the international conference establishing this new monetary order—obliged participating international economies to peg their currencies to the dollar, which itself remained within a 1% standard deviation from the prevailing gold rate.
The architects of the Bretton Woods agreement hoped to prevent countries from artificially devaluating currencies, in order to make goods more attractive in the international marketplace, which led, in part, to a disastrous shrinking of the world economy in the 30s.
The system they established lasted for the next three decades. Shrinking confidence in the dollar, however, lead to a new international monetary system of floating rates, meaning that regular market forces, rather than governmental intervention, would determine the value of currencies. It was from this new system that the modern Forex market arose.
In a floating exchange rate system, market demand determines the relative value of currencies. Such a system is thought of as self-correcting, as any inefficiency is hammered out in the market. If, for instance, global demand for a particular currency falls, goods will become cheaper, and thus the value will begin to rise with the newly created demand.
In a floating exchange system, traders can exploit inefficiencies before the market corrects itself. These traders are called arbitrageurs, and they are able to utilize online brokers to execute their trades. If you are interested in beginning to trade in the Foreign Exchange, please visit our broker’s page to find a broker suitable for you.

How do I get started in Forex?
Do you see the profit potential in trading currencies, but learning to trade just seems too daunting? Have you watched with excitement the recent crashing of the value of the USD, but simply don’t know how to get started trading?

While it is simple to begin trading Forex online, maintaining profitability in the long term is no easy task. You have probably heard that 90% of Forex traders lose their money in the long term. If indeed this is true, it is the result of a couple of different factors.

Overtrading: Each trade costs you a couple of pips—Consider your trades well before you make them. Each faulty trade, even if exited quickly, drains equity.
Bad money management: One bad trade can wipe out a year of patient, smart trading. Manage your risk using stop loss orders, so that you never risk too high a percentage of your equity on any one single trade.
Lack of knowledge: If you have never traded Forex before, educate yourself! Successful traders are not born that way. The difference between success and failure in the Forex market depends in no small part on the knowledge and education of a trader. For the beginning trader, a proper education is essential before investing in the Foreign Exchange. Find a program you are comfortable with, and begin practicing on a demo account.

Trading on the foreign exchange offers unparalleled opportunities for profit, but it is also extremely risky. Make sure you know what you are getting into before you start trading, and start trading only when you are comfortable in your knowledge and ability.