How To Choose A Forex Broker
Forex brokers are in abundance and that makes it very hard for someone new to forex trading to decide which is the right company to go with.
First off, I am not an Introducing Broker or affiliated with any forex broker. An Introducing Broker otherwise known as IB or an affiliate is a person or organization promoting the broker in return for some form of commission either once off or ongoing. I have previously promoted a particular company from my website but soon realized that this is not in the best interest of my readers and now do not promote any forex brokers. Quite often IB's or affiliates will advertise brokers on their websites as graphics or banners. I was on a seminar where the seminar company was heavily promoting a broker and offering all sorts of freebies if we signed up this weekend. It was clear they were some how associated with the broker and they were serving their own needs and not the seminar attendees requirements.
Never rush into signing up with a broker. You wouldnt buy a car without knowing something about it so don't rush into opening a broker account without knowing more about them.
Choosing a forex broker can be confusing but here are some tips to help you identify the qualities your broker should have.
The spreads is the difference between the buy price and sell price and is measured in pips. Compare spreads across a few brokers and look for the brokers with smaller spreads.
New forex traders should look to start trading with either a Micro or Mini account. Once experienced then a trader can move onto a Standard account. Your broker should offer either a micro or mini account.
The forex broker should be registered as a Futures Commission Merchant with the Commodity Futures Trading Commission (CTFC).
Customer Service and Speed:
Trading in forex is available 24 hours a day from Sunday evening until Friday evening. Customer service should be open during these exact times. Try calling the trading desk or helpdesk to see if they are open and check the speed at which they answer the phone. When in a trade the last thing a forex trader wants is to be kept waiting for the phone to be answered.
If you use many different computers you may prefer the trading platform that is web based. If you will be trading from just one computer all the time then downloading and installing the software to your computer will be fine. Check to see if your broker is software based or web based. Some brokers offer both options which would be the better option.
How Many Currencies:
Check to see what currencies they offer trading on. As a guidance confirm they trade most of the major pairs and all the ones that you may like to trade in addition.
How much leverage does the broker offer? For inexperienced forex traders using mini accounts should not use too much leverage and 100:1 would be adequate in most cases.
Check what the procedure is to fund your account and also to withdraw your profits including the time it takes to do both.
What tools are offered with the account? Some brokers offer an array of charting tools and although useful and well worth having I do not recommend relying on these solely for your trading. You get what you pay for and even though any free tools offered with the trading account is always great, a trader needs to invest in good tools to become a good trader.
The above is The Dynamic Trader guideline to help choosing the right forex broker.
Good dynamic trading...