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Choosing
a forex broker
Before start
trading Forex, you need to set up an account with an online Forex
broker.
Thanks to the Internet, today online trading is so much easier that
before. Most of the Forex brokers are very efficient in cost and
service. The following are important criteria to consider when choosing
a forex trading broker.
1.
Customer Service
Since Forex is a 24-hour market, so, 24-hour support from broker
is important. We have to ensure that the broker's film can be contacted
either by phone, email or online chat at any time. The quality and
knowledge of the representative also a key factor to considerate
before opening an account.
2.
Safety of funds
It is important to use a broker with a strong financial standing
and is regulated by a regulatory authority in the country you are
located.
3.Type
of broker
Is the broker an Electronic communication Networks ( ECNS) or the
Market maker.
ECNs brokers route your order and match them with a trader in the
real market.
Marker makers are the liquidity-providing brokers who fill your
order without routing into the marker.
4.
Spread ( Charges )
What spread the broker charge? are there fixed or variable? The
broker's charges can greatly affect the earning of the trader. We
recommand some where at 3 pips.
5.
Commissions
Do the broker charge additional commissions? In general, most broker's
commissions are built into the spread
6.
User friendly platform
Forex brokers usually allow you to trade over the Internet via their
trading platform. Most trading platforms are either Web based, or
a client based program.
Web based software is hosted on your broker’s web site. A client-based
program which require you to download and install. Usually, this
program runs faster than the other.
The broker’s trading platform should also include:
Instant execution of your orders, this is the outmost important
feature. Secondly, the common technical indicators, the basic order
types, the ability to view real-time currency exchange rate
quotes, your account balance with realized and unrealized P/L. margin
available, and any margin locked in open positions.
Always be sure to open a demo account and test out the broker's
platform before opening a live account!
7.
The Broker Policies
Before selecting an online Forex broker, you should examine their
features and policies. These include:
>Type of
Currency Pairs
The seven major currencies such as AUD, CAD, CHF, EUR, GBP, JPY,
USD should be available.
>Margin Requirement ( How much you have to deposite to start
an account )
The lower the margin requirement the higher the leverage,
mean the greater the chance for higher profits and losses. Be careful
about margins and remember this is a double edged sword. We recommand
USD 250 - USD1000.
>Minimum Trading Size your broker allow
1 standard lot = 100,000 units
1 mini lot = 10,000 units.
1 micro lot = 1,000 units.
Some brokers even offer odd lots allow you create your own unit
size.
Last but
not least. You need a high speed Internet connection in FX trading.The
Forex market is a fast moving market. Make sure you have a high
speed Internet connection.
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