Quite simply you cannot do without Forex Brokers. The broker is the go-between. He does not actually run the show but he places your trades, minds your money and pays you as required. The broker is the person who helps you to transact your orders (this is all done automatically once the account is set up) and who has a duty of care to you to see that your account runs smoothly.

Your broker is not there to offer help or advice. He makes his money by taking percentage of your profits in the form of spreads. The tighter the spread the bigger your profits. Most Forex brokers work on a spread margin of between 3 and 5 pips for trading the majors i.e. U.S. dollars, Euro, U.K.pound, Yen etc.

A pip is the smallest unit used in currency trading. If the Euro is worth 1.4735 and it moves to 1.4738 then the 3 unit difference is called 3 pips.

There should be no other commissions or fees – make sure the spread is all you pay.

While I would not recommend beginners to take leverage this is the common practice and the leverage amounts vary from 200:1 to 400:1. What this means in common terms is that if you have an investment of $1000 you will be given the authority to invest between $200,000 and $400,000. You can see that if a person becomes very adept at trading that this facility will enable the trader to make a lot of money from small capital. The downside is that the broker will look for some kind of collateral.

If you buy an automated Forex trading system such as the one I use then the system operators will recommend a reputable broker. But make sure that the broker offers a 24 hours support service.

Finally do a little research yourself and go on the internet searching for Forex Brokers. You will be amazed at the numbers of brokers out there who are clamouring for business. But look carefully at the broker recommended by the vendors of your automated Forex trading system.