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  • I Advice - How To Avoid Forex Broker Traps - A Question and Answer Session

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    during other times of the day, the spread on the EUR/USD can get as high as 6 pips.

    If a broker is willing to give you a fixed 2 pip spread and let you trade an account th

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    Forex brokers seem to be a dime-a-dozen these days. Furthermore, it seems like everyone is calling foul about his or her broker. Indeed a lot of brokers are less than honest. Here's what you should look out for.

    Q. Where can I find an honest broker offering a 1 or 2 pip spread?

    A. That depends. For a mini-account or a micro-account, you can't. The smallest spread I've ever seen (that was legitimate) was 1.5 pips offered by Interactive Brokers. However, they required that you have an account size of $25,000.00.

    The only other broker that I know of that comes close is Oanda. They offer spreads that get very low during times of high liquidity for very small accounts. However, during other times of the day, the spread on the EUR/USD can get as high as 6 pips.

    If a broker is willing to give you a fixed 2 pip spread and let you trade an account tha

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    e's what you should look out for.

    Q. Where can I find an honest broker offering a 1 or 2 pip spread?

    A. That depends. For a mini-account or a micro-account, you can't. The smallest spread I've ever seen (that was legitimate) was 1.5 pips offered by Interactive Brokers. However, they required that you have an account size of $25,000.00.

    The only other broker that I know of that comes close is Oanda. They offer spreads that get very low during times of high liquidity for very small accounts. However, during other times of the day, the spread on the EUR/USD can get as high as 6 pips.

    If a broker is willing to give you a fixed 2 pip spread and let you trade an account th

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    ount, you can't. The smallest spread I've ever seen (that was legitimate) was 1.5 pips offered by Interactive Brokers. However, they required that you have an account size of $25,000.00.

    The only other broker that I know of that comes close is Oanda. They offer spreads that get very low during times of high liquidity for very small accounts. However, during other times of the day, the spread on the EUR/USD can get as high as 6 pips.

    If a broker is willing to give you a fixed 2 pip spread and let you trade an account th

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    000.00.

    The only other broker that I know of that comes close is Oanda. They offer spreads that get very low during times of high liquidity for very small accounts. However, during other times of the day, the spread on the EUR/USD can get as high as 6 pips.

    If a broker is willing to give you a fixed 2 pip spread and let you trade an account th

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    during other times of the day, the spread on the EUR/USD can get as high as 6 pips.

    If a broker is willing to give you a fixed 2 pip spread and let you trade an account that is only $200 in size, that is a problem. I can almost guarantee you there is some shading of the price going on. In other words, you aren't getting the real price. You've getting a price that will be more favorable to the broker. That means you'll have more losing trades. The old phrase, buyer beware, has much meaning in the forex broker world.

    Q. Why shouldn't I use 400:1 leverage?

    A. The higher the leverage you use, the harder it's going to be for you to make money. The more leverage you use the more value each pip has. Since the pips are worth more, you have to risk fewer pips per trade to avoid risking your account's wellbeing.

    Here's the problem. When you risk fewer p

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