110 – 6 Mistakes Traders Make Picking an FX Broker with Justin Hertzberg
07 Apr, 2016 / By: Brandon Clay
Justin Hertzberg discusses the most common mistakes traders make when picking a forex broker.
Justin Hertzberg is a currency trader and also President and CEO of Forest Park FX, a CFTC-registered introducing brokerage firm. On this episode, we’re going to be discussing the mistakes people make when shopping for forex brokers. He lives in sunny Boca Raton, Florida.
Best Trading Advice
“Don’t expect it to be easy, treat it like any other profession.”
6 Mistakes Made Picking an FX Broker
- Not fully understanding commissions and spreads
- Not understanding the execution model your broker offers
- Neglecting your choice of trading platform
- Being oblivious about the regulatory agencies that are supervising your broker
- Choosing a broker that doesn’t fit your trading style
- Not using a value added introducing broker
From the Trader’s Story
“If you don’t really spend the time, it’s really no different than walking into a Vegas casino. The odds are stacked against you and you’re not going to put in the time necessary to change those odds.”
“When you’re trading on raw spreads the likelihood of your take profit increases and the likelihood of your stop losses being triggered decreases.”
“Don’t choose a platform because you feel you have to choose a platform.”
“If you learn from an educator or mentor and he trades on a certain platform, our advice is typically to use that platform.”
“Not every broker is right for every trader.”
“Don’t expect to be a millionaire overnight, don’t believe the hype, do your due diligence.”
Resources Mentioned by Trader
Favorite Trading Book
Reminiscences of a Stock Operator by Edwin Lefèvre
So many of you guys out there are forex traders. Many are not. But I still thought it would be good to have Justin Hertzberg on the podcast to review what happens after a currency trade is placed. There are so many things to consider. Hopefully, this episode shed some light on how to pick a forex broker. It may have even convinced you that you’re with the wrong broker. If that’s the case, then it was worth the price of admission. Thanks for bringing the value today, Justin.
And thank you guys for listening. In two more episodes, I’m back with a personal podcast update. I suppose I need to start outlining it so it’s not just a ramble. I’ve got a week to write it so I’ll make it happen. More to follow – not much has changed on the trading side except I’ve slowed down my trading to a virtual crawl with one strategy and one currency. But that’s what I think I need to do.
As for your call to action today, research more about your brokerage – whether or not you trade FX. That point about commission brokers vs. spread brokers was interesting and it made me think about how that would affect fills and long-term profitability. The fact is, a 3-pip spread can be the difference between a take-profit and a stop-loss trade – not on every trade, mind you, but on some. And that would affect long-term and medium-term results.
On the next podcast, I finally introduce you guys to my personal trading coach. If you’re interested in finding out about that guy who’s responsible for my horrible trading results thus far in the new method (you know I’m kidding – I’m responsible for my horrible trading results), here’s your chance to hear from the man, the myth, the legend. That’s in the next episode.
Until next time, all the best.
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