Lately, more and more people are looking towards trade as a form of investment as well as a form of business. Forex trading or foreign exchange trading is quickly becoming one of the most popular forms of investment trading today.
And required with a minimum of start-up capital, the market entry barriers are relatively low and that made it easier for the man on the street to start trading the Forex market.
However, if you are a bank or a large financial institution, you will need the services of a broker to be able to act currencies.
Fortunately, with an increase in the demand for FX trading, there is a corresponding increase in the number of Forex brokers in the market.
But to choose with so many brokers, the problem is, before the most potential Forex traders do not like the trade, but how to choose a reliable broker to start trading with.
Unfortunately, not all brokers on the market the same. You must have a suitable broker responsive to your specific needs as a trader.
And from experience, this could prove to be the difficult part, since not all brokers offer the same services or have the same fees and policies. Have slight differences in costs as the pip spread a huge impact on your profits' bottom line.
Seriously, if you want to make a living as a forex trader, you need to focus on the markets and do not care about questionable brokers. Therefore, choosing a reliable forex currency trading brokers one of the top priorities that you should need to do before you even start his trading.
There are actually several factors that a Forex Broker a good one, and here is my top 10 tips for choosing a good forex trading broker make.
Reputation is important in this business, as there are a whole lot of "fly-by-night" operations out there on the market. Basically, the rule of thumb to stick with established forex currency trading brokers who have a good track record.
An important factor to note is that all of their transactions must be verifiable. Do they have a legitimate office with many satisfied customers? They have been in business for many years, or have they just pop up overnight?
Here you will find a lot of information from unbiased review sites that talk about their experiences with brokers. If someone got out before torn, you should probably steer clear.
Reliable agents should be transparent in their dealings and operations. Relevant information about how they have to work to be readily available online so that potential traders can easily find out more about their reputation and performance.
No matter what country you live in, you always choose a forex broker, the execution of transactions in a country where their activities are monitored by a regulatory body. A reliable Forex broker must be regulated and accountable to the competent authorities.
For example, the Swiss banking system is one of tightly run ships in the world is regulated by the Swiss Federal Department of Finance, while the U.S. Trade Brokers FX official members of the National Futures Association (NFA) should be, and registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC).
In other words, they must adhere to and comply with industry rules and regulations. The last thing you want is some unregulated broker in the middle of nowhere holding on to your money. If they go under, good luck ever getting your money back.
If a broker is regulated by any monetary authority, it might be better to choose another broker instead.
3 Differences in pip spread
Unlike brokers, forex trading brokers do not charge fees or commissions, instead they make their commission from the difference in the spread of the currency pair pip when you trade.
Unlike other financial markets, the foreign exchange market are not traded through a central exchange, the value of this spread is thus determined by the broker you instead.
Most forex brokers publish live or delayed prices on their website so that the dealer distributes compare differences and some brokers even offer a variable pip spread.
At first glance, the concept of a variable spread may seem tempting because of the volatility of the Forex Market. If the market is quiet the spread is relatively small, but if the market really heats up the spread difference could only widen large enough to wipe out your profits.
Unfortunately, many real estate agents are there to as "bucket shops". You do not have your best interest in mind, and some have been known to spread the change to their advantage.
The bottom line here is still looking for FX broker with fixed and low pip spreads, regardless of how the market moves.
4 Speed Of Execution
In my book, this is something that most newbies rarely notice when they are. For a trading account
Most brokers do publish live prices for their trading platform, but the question is how quickly they are able to execute the contract, if the "Buy" or "Sell" button.
Speed of execution of the order is absolutely necessary, especially if you are a scalper trade the 5 minute charts, can not possibly around and wait another 5 minutes for the order to be confirmed, are sitting right?
Fortunately, the best solution for this problem is to open a demo account with the broker and give them a test drive. This will allow you to test their trading platform study the speed of execution.
5 Minimum Trade Size Account
Nowadays uses brokers are getting higher and higher in order for the small retailers who have little capital, but wants to be a piece of the forex action requirements.
Micro-and nano-accounts are available, but most brokers offer 2 standard trading account sizes, namely the standard and mini account.
There main difference between a standard and mini account is that a standard account trades in 100,000 units, while a mini account is only a tenth of that size, or 10,000 units per lot.
In other words, the mini account offers in one-tenth the size of the normal account. This allows you a tenth of what you would risk venturing into the regular account.
6 Margin and Leverage
Margin accounts framework forms the basis of forex trading, so make sure that you are fully aware of the broker's margin terms before rushing to open a live trading account is the last thing you want to hear , a margin call from your broker.
Make sure you fully aware of how your broker calculates the margin requirements and changes it for the currency pair traded? Is it fixed or variable at different times of the day or week?
Take note that some brokers offer different margin requirements for standard and mini accounts, so be careful.
And when to use it is, most traders with the 1:100 ratio, but did you know that some forex trading brokers offer even today uses up to 1:400.
A word of caution, if you are a novice trader, you do not use too much influence, as this is one of the main reasons why so many novice traders to be wiped out so quickly. Remember, the key is worse to win the Forex game for small consistent profits.
7 Rollover Rates
Rollover rates are fees incurred when traders to move their positions to be the following trading day.
If you are a scalper or a day trader, this sentence could not, these seemingly small figure might sometimes snowball if you are unaware of your trading account, but if you are a swing trader or long term trader.
Therefore, it is important to find out to earn the minimum margin requirements on a position overnight? Is it a mere 0.5% or a staggering 2%, go do the math.
8 Trading Platform
A good trading platform will not only show you real live prices, which allows dealers to "Buy" or "Sell", but also a variety of other functions like charting and technical analysis tools.
Some sites even offer more advanced features such as trailing stops, mobile trading and even the use of automated trading software called expert advisers.
Most brokers have their own proprietary trading platform, but many are using the Meta Trader 4 platform since it can use to meet a fairly easy-to-use system that extends to all levels of traders from novice to expert, is.
In my book, the nature of the trading platform can be used either to trade the forex market a breeze or a real hassle, so make sure that you get a feel of the platform by itself. Demo account for a
9 Technical Support
Normally, the type of support comes in the form of telephone or e-mail support, and even "chat live" in some cases.
Since the Forex market is a global market 24 hours, also provided the necessary support by the broker should be 24 hours around the clock as well.
Remember, it could in the afternoon for you 3.00, but it could also be in the morning so sure for another dealer all over the world 3.00, that someone from the broker's office to take the call when things go wrong going to be.
An important aspect of support that high-lited have is the ability to "open" position over the phone in the unfortunate event that your PC stalls or does not close the Internet connection do not match, anything can happen when Murphy's Law kicks in.
10th Additional value-added services
Most of the better forex trading brokers provide great value added services in the form of free webinars, technical tools, e-books, articles and even daily market analysis and updates of their own panel in the house consultant.
This could be useful only if you, the basics are type of trader trades.
Well, that's my 2 cents worth when it comes to reliable Forex trading broker, hope it gives you enough information for a good start to your Forex trading venture.
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