Choosing the right Forex Broker
When new in the Currency
trading market, one of the hardest decisions to make is that of
choosing the right broker. It is difficult to decide on a Forex
broker, whom we can safely open our trading accounts with,
especially when there are so many of them in the market.
Offering features, limitations, pros and potential differing from
there fellow brokers, there are a number of individually suitable
brokers in the market.
Although every individual
trader has its own personal parameters on which they judge the
broker before choosing one, some parameters should be kept in mind
always, before opting for any broker, whomsoever.
Is your broker established and regulated?
It is extremely important to
know whether the broker you want to choose, is established and
regulated or not. Choosing an established broker can confirm you
about his reputation and the amount of expertise he has about the
A regulated broker will
ensure credibility in your trade. This is because of the fact that
every regulated broker has to present his fiscal reports to the
regulatory bodies, such as local regulatory bodies like NFA
(National Futures Association) or FDF (Swiss Federal Department of
Finance) for US traders and brokers.
These reports, if failed to
be presented, can give these bodies the right to penalize them to
the extent of even expiring their market membership as a broker.
Such stringent rules and
orders compel all these Forex brokers to maintain see-through
fiscal reports. Also, such regulations on brokers facilitate the
traders and depositors to trade safely, hence increasing their
overall investor security.
What is the current state of
affairs while trading?
The current state of affairs
at your trading platform along with the features and conditions
offered by your chosen broker are amongst the most important
factors that should be kept in mind while trading. These factors
include within them, certain aspects such as:
Brokerage or commission
Some brokers demand a fee or
a commission from the traders. But it is acceptable if some of
them are charging a fee, as they might be offering a smaller
spread than the other brokers in market.
Clearly, the lesser the
spread on a currency pair, the better is the trading environment
for the traders.
Different brokers guarantee
different targets. Most of them go in for assuring quick and
visible implementations through normal market situations. Trading
implementation deals with keeping a track of how rapid yet steady
are the execution of trades really going on.
Make sure that all your
trading details and finances are kept in a separate account and
are secured with an insurance cover.
Every trader or investor
should have proper knowledge about the lowest sum of funds which
are a pre requisite for opening an account for trading purposes.
If kept in mind before going
in for a full fledged trading, this is a very useful and helpful
feature which will help them to experiment a little and see for
themselves, how well or bad do they perform.
Going by the above mentioned
parameters, must have eliminated a number of brokers from your
pick list. With a few left in hand now, you still have to cut
short to just one or two of them to choose from.
Here is when you need to
check the remaining. Once you have stepped in to the market, you
should now get aware of your surroundings and get vigilant in your
Some of the major aspects for
which you should gain knowledge and get informed are:
Slippage can be known as the
unfavorable difference in the currency’s price movements between
the price when the order is placed and the actual market value of
it. What you need to know is whether your broker respects stop
loss and win profit levels?
This is the most significant
factor to be considered before finally selecting a broker for
yourself. Is your broker courteous to talk to? Do you think you
can openly discuss your doubts and apprehensions with him? Is he
enthusiastic to help his investors and clients?
If your broker is registered
with the local regulatory bodies, it is very easy for you to visit
the supervisory authority’s website or office and get hold of as
much information as you require about your Forex broker.
Go ahead and ask other
traders about their understandings, incidents and experiences with
their own brokers.
Get as much of broker
information as you can. You can take help from certain forums
related to broker information such as ForexFactory, ForexNews.
the above given parameters, it should be much easier for any
trader or investor to now choose a broker, more wisely and