How to Choose a Forex Broker

Choosing a Forex Broker

According to me you must have spent days learning about forex currency trading. You might have also spent few bucks on forex trading course in order to acquire an exhaustive knowledge. Well, I would say that you are on the right path to becoming a successful forex trader.

Once you have finished your forex trading training the next step is to open a forex trading account with a forex trading broker.

With wide spread awareness of advantages of trading forex, the markets have witnessed a huge influx of investors like you and me who are eager to grab their share of pie from forex currency trading. In order to cater to the growing demand, the forex markets are flooded with ever increasing number of forex trading brokers.

Choosing a right forex trading broker is though not a very daunting task but it does require some basic research on the various parameters. I have discussed few important factors to guide you through selecting a right forex trading broker.

Online or Offline

First of all make up your mind about the suitability of online or offline forex trading. Most of the points discussed here are applicable to both online and offline forex currency trading. However, If you intend to do offline forex trading then you may not bother much about forex trading software and demo account. Make sure that sufficient support services for offline forex trading are in place at the end of the forex trading broker.

Forex Trading Software

This is the backbone for online forex currency trading. Ensure that the forex trading platform is state of the art. Look out for the following important feature.

1. IT infrastructure and user friendly features.
2. Real time quotes, multiple windows, types of orders, number of currency pairs and speed of execution of orders.
3. Charting, technical analysis and other analytical tools.
4. Research and Analysis: There are ample value add on services like tips on entry and exit points, forex indicators, real time access to fundamental and technical research reports and global news broadcasts. Find out are there any extras for these services?

Demo Account

Most of the forex trading brokers offer you a free practice account or a demo account for at least 30 days. However if it is not offered then insist upon it. Demo account enables you to get an in-depth idea about forex trading platform.

Account Related

Read and understand all the paper work before signing any documents. Find out (1) What is the minimum balance requirement (2) What is the margin and leverage and (3) Whether the back office is fully online. Nowadays you can start with as low as 250$ account and leverage ratio as high as 200:1.

Trading costs

There is only once cost – Bid/Ask spread. Pips charged by the forex brokers vary from 2 to 5 Pips, lower the better. Ensure that there are no other hidden costs and charges.

Customer Support and Reputation

I will not deliberate much on this factor as it can be ascertained only after the experience. However you can take the reviews from friends or internet bloggers community.

Regulatory

Forex market is not regularized. Safeguarding the interests of the investors is the done by the statutory financial authority of the respective countries. In USA, the forex trading brokers registered with CFTC and NFA should be preferred.

Take a look at our Forex Broker Reviews and Comparisons.

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