|
How
To Choose A FOREX Broker
Most investors
who trade FOREX stocks use a broker. A broker is an individual or
a company, who buys and sells stocks according to the investor's
wishes. Brokers earn money by collecting commissions or fees for
their services.
You should check
that a broker is registered as a Futures Commission Merchant (FCM)
with the Commodity Futures Trading Commission (CFTC) as protection
against fraud or abusive trade practices. A FOREX broker also needs
to be associated with a financial institution, such as a bank in
order to provide funds for margin trading. Picking the right FOREX
broker for you will take some work on your part. There are brokers
who charge a flat fee and some that charge commission. It may be
a good idea to talk with friends and business associates about their
brokers. You may get some good leads, and you're certain to hear
who to stay away from. There is nothing like word of mouth advertising.
If you are thinking
of investing online, you could choose several online brokers and
contact their help desks. Seeing how quickly they respond to your
questions could be key in how they will respond to their customers
needs. If you don't get a speedy reply and a satisfactory answer
to your question you certainly wouldn't want to trust them with
your business. Just be aware that as in other types of businesses,
pre sales service might be better than after sales service.
Before you choose
an online broker get a copy of their online demo account. What features
are included? Is the software reliable? Does it offer automatic
trading? Are there extra software features that cost more?
Before setting
up an account with a FOREX broker you will need to do further investigation.
How quickly will these brokers execute your buy/sell orders? What
is their policy on slippage? What are the transaction fees? What
is the spread, fixed or variable? What are the margin requirements
and how are they calculated? Does the margin change with currency
traded? Is it the same for mini accounts and standard accounts?
Don't forget
to ask about minimum account balances and interest payments on account
balances. Make sure that your funds will be insured.
About the Author:
Mark Freeman
This article provided courtesy of http://www.forex-order.com
|