A common question asked by retail currency traders who are new to the forex trading business is that of the commission charged for trading. Whilst there are some Forex brokers that to charge a small commission on the trade, a common practice amongst the forex brokers is to charge what is known as the spread, which is where a forex broker makes his money.

A pip is the smallest price increment, usually the third or fourth decimal place after the unit price. For example, a change from 1.9456 to 1.9458 is a change of two pips. The spread can be described as the difference between what is known as the asked price and paid the price, which refers to the price at which a particular currency is bought or sold at any given time. So if you’re given a quote of 1.9456 as a sale price or bid price and 1.9460 as the buy price or ask price, that is a difference of four pips or a four pips spread.

When you execute the trade, you will start off with a deficit of four pips which is the forex brokers spread. Therefore, each time you trade, you will need to make up usually between two and five pips in order to start going into profits and making money in Forex.

Some people evaluate the broker based on the spreads that they charging across a particular pair or a selection of currency pairs. It is important to check whether the spread is variable fixed because during particularly volatile times in the market, for example important economic announcements/news a variable spread will make it near to impossible to make money during these times.

A forex broker may advertise itself as being under the auspices of a large bank, institution or lending organisation. This is because of the large amounts of money that are involved in trading on the forex markets. If the forex broker is in America, the Commodity Futures Trading Commission is the regulatory body dealing with merchant registration.

The author finds that in addition to evaluating the spread offered and whether or not it is fixed or variable, bearing in mind that one should be finding trades that way outperform what is required to be spread anyway, it is useful also to test a demo account, so that the platform that the broker offers, it additional features and functions, the speed of execution and other factors can be gotten used to. Two weeks should be sufficient time to evaluate the platform.

As stated, and majority of forex brokers do not charge a commission but instead learn from buying and selling, interest on deposits, converting and holding currencies and fees for overnight rollover, i.e. they are active as currency dealers, and this is where their renumeration comes from.

The forex dealer broker acts as a middleman between the retail investor and the interbank markets. As previously stated, the spread is where the broker “makes his bones”. There is arguments amidst disgruntled forex traders on the markets that some Forex brokers are Forex scams and do not operate in a fair manner, so it is important to choose wisely.

Because Forex operates 24 hours a day, your broker should offer 24 hour telephone support. Telephone support is important because the Internet is not completely fail proof and therefore if there is a problem with either your platform or your system and you need to take action on the trade that is currently open, it’s important that you are able to use the telephone brokering to manage your trade in an emergency.

Sam Beatson trades the forex market 5 mornings per week and publishes articles, information and courses via www.sambeatson.com - his forex blog. If you want to use a broker with fast excecution, a powerful interface, built-in charting and that accepts PAYPAL and other payments, check out the side of the forex blog at www.sambeatson.com

There are two distinctions that will be made in this article. The first regards forex trading software that enables the retail forex trader to access data feeds and charts that show the current market action of major currency pairs and crosses in the forex markets.

The second regards forex trading software that either assists the trader in some way as an adjunct to their trading or claims to identify trading signals whereby the trader can enter the market using the software perhaps as a stand alone or in conjunction with their technical analysis charts.

The forex trading software that is probably most relevance to the forex trader, who participate in online forex currency trading through a forex broker, is that of a charting package which may well be provided by the broker. Many forex brokers, contrary to popular belief, provide excellent information for their clients, in order to help them.

In addition they will provide a kind of forex trading software, that incorporates a datafeed which transmits the latest market prices as given by the broker with a package that enables the trader to use charts of different timeframes, different currency pairs and a selection of technical analysis indicators, which can be used to create a technical training strategy.

A good charting package will be reliable 24 hours per day in providing up-to-date quotes and potting market action on a candlestick or bar graph. The amount of options will vary from broker to broker, from charting package to charting package.

Most will include the bid ask prices across a variety of pairs as well as the option to display one chart or multiple charts and to put on those charts indicators such as: moving averages; RSI; Fibonacci retracement levels and an ability to change the change the color scheme to the desired choice. Such a software made it to trader the opportunity to execute trades as well. Features such as one click order execution and closure are desirable. Speed of execution obviously is a major advantage for intraday trading.

The other type of forex trading software that has been popular to the retail investor, is the forex software that claims to identify signals and entry points for trades usually for a monthly fee. Unfortunately the reviews online for such softwares, purportedly from past users, are frequently very negative.

It is not the purpose of this article the judge, just a present appear to be the facts. The other hand, some companies offer a forex trading software, which rather than identifying the signals, provide either a template or a chart set up along with training which may or may not be proprietary, that can help the trader improve their style dramatically.

Of course, there are other types of forex trading software. There is the type of software that allows the trader to practise trading through a simulation of historical forex market data, so that the trader can practice their trading, even at times for the markets closed, i.e. at weekends.

One other thing to be remembered is that even if you’re forex broker does not provide you the software that you find is the most useful of the most helpful in terms of your looking at charts in order to trade, is that your computer may well be able to run both your brokers software and the particular charting package software that you like, at the same time, enabling you to place trade with your broker whilst monitoring the market using a charting software from either another broker or datafeed provider.

Full-time pro forex trader Sam Beatson is considered THE Master Forex Trainer by his students. He not only knows how to use forex software inside out - he’s created his own forex trading software to help traders for FREE. Visit www.sambeatson.com to find out about Sam’s coaching programs,newsletter & FREE forex trading software