GET MORE VISITORS AND DRIVE MORE TRAFFIC:

Choosing a Forex Broker

Before trading Forex you need to set up an account with a Forex Broker. So what exactly is a broker? In simplest terms, a broker is an individual or a company that buys and sells orders according to the trader's decisions. Brokers earn money by charging a commission or a fee for their services.




                  • Find out if the broker is regulated

                  When selecting a prospective Forex broker, find out with which regulatory agencies it is registered with.


                  Traders are recommended to deal only with authorized currency traders. If you are trading in United States, make sure your Forex brokerage firm is registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Also, most large brokerage firms are connected in some way to a bank or financial institution. Since the majority of Forex business is based on credit, the partnership with financial institution is crucial to offers their clients better in Forex investment.

                    • Customer Service
                    Forex is a 24-hour market, so 24-hour support is a must! Can you contact the firm by phone, email, chat, etc.? Do the reps seem knowledgeable? The quality of support can vary drastically from broker to broker, so be sure to check them out before opening an account.

                    • Online Trading Platform
                    Trading software is very important. Get a feel for the options that are available by trying out a demo account at a few online brokers. Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it. And the most important feature of all - can you actually understand the platform? Having all the bells and whistles is of no use if you can't use them, so again, get a demo account and give it a go.

                    • Spreads
                    Currencies are normally traded in pairs of ask-bid price. The difference of the selling (bid) and the buying (ask) is known as spread. For example of EUR/USD 1.2435/1.2440, the Forex quote here means you can buy 1 Euro Dollar with 1.2440 USD or sell 1 Euro 1.2435, and the spread is (1.2440 - 1.2435) = 0.0005. As Forex brokers do not charge commissions on their client trades, they are making money off the spreads. If the spreads are low, this means they are offering a cheaper service and thus traders have better profit value. Thus, Forex brokerage that offers lower spread is more preferred.
                    • Leverage
                    Some brokers offer 1:50 trade margins and some offer 1:200. The fact is leverage level might varies a lot for different brokerage firm. While higher trade margin does not guarantee your profit in Forex market, higher trade margin however will give you a better chance to win big when the opportunity comes. High leverage level is especially important when you have little capital outlay.



                    AddThis Social Bookmark Button

                    20 comments:

                    car loan said...

                    Forex broker really plays an important role when it comes to the success of the forex trader.

                    I had experienced when my trade failed and it cost me $600 because of the lack of the order execution.

                    So pick your broker wisely. Great post! I have added the snippet of your post to my blog:

                    Forex Trading Cafe Free Resources And Information For Millionaire Trader

                    jack said...

                    good post, really so wise, that helped me a lot you can visit my forex blog at :
                    http://sigmaforextrades.blog.com/

                    jack said...

                    nice post, good info, i really found real advises, you could judge my forex blog at :
                    http://sigmaforextradings.jeeran.com/

                    forexgen noswap said...

                    wonderful post and i like it, i hope you see my blog its about Forex Mission And Broker Vision

                    http://successfultradingwithforexgen.blogspot.com/

                    WARSHOCK said...

                    maybe i'll learn a little forex trading by constantly visiting and reading articles here.

                    jack said...

                    i found some new info,& it helped a lot, you can view my forex blog at :
                    http://sigmaforextradings.jeeran.com/

                    izmild said...

                    I don't know anything about Forex but someday I would it could be good to me... Cheers!

                    http://uniquetvcomm.blogspot.com

                    Diane Scott said...

                    Valuable information if you want to really get it right! Thanks!

                    MorgansMummy said...

                    I agree that costomer service is a MUST! No matter what business your in, people need to know how to service and things for online, 24 hours is awesome!

                    corrin said...

                    We came into a little extra money, and my husband is really pushing to do some small investments, but I'm not convinced it's a good time to play with that money.

                    Sadie said...

                    wow - great info! I've seen people talking about Forex a lot, but didn't know much about it. I'm still a little lost on it, but that really helped! Thanks. :)

                    cady said...

                    i really don't know anything about forex trading, but i would imagine that it would be beneficial to have a broker.

                    Karen said...

                    Excellent advice!

                    Owen Cutajar said...

                    Thanks for the info. I've never done forex trading, but usually watch exchange rates with interest

                    Maureen said...

                    Forex scares me. I've looked into it a few years ago. It just seems to be too volatile. I know of people who have lost big time in forex. However, I'm sure many have done very well-

                    Julie said...

                    A lot of good information here! I'm learning so much about Forex Trading from your site, thanks!

                    BarbaraRae said...

                    Great advice. I like the fact that you can try it out before you spend your real money!

                    Connie said...

                    I've heard of Forex before but didn't know much about it until reading your blog. Thanks for the information.

                    Mike said...

                    Just because high leverage is available, doesn't mean it should be used. In fact, using anything more 10:1 is a road to disater, which will happen, no if's and's or butt's. Period. Just a matter of time. Making statements like "high leverage is especially important to those with limited capital" is a sign of lack of experience or outright ignorance. Nobody who has traded Forex for any length of time would even make such claim. That's how accounts go bust.

                    daria369 said...

                    You could publish your own dictionary with all the terms listed on the top of this page... :)
                    Choosing a broker seems to me like an easier way to do the forex trading.

                    Copyright © 2008 - Forex Trading Guide - is proudly powered by Blogger
                    Smashing Magazine - Design Disease - Blog and Web - Dilectio Blogger Template