Tips for Choosing the Right Forex Broker

Tips for Choosing the Right Forex Broker

There are hundreds of Forex brokers out there these days and it isn’t easy for anyone eager to start trading Forex to know where to start. The competition is fierce among brokers and you can get lost among the different features offered by each one. So before opening an account, it is worthwhile doing a good amount of research and comparison in order to be able to select the one that is just right for you.

Here are some tips for newbie traders: 

  1. Decide what is important to you. Will you be opening a demo account so you can practice trading using virtual money and not risk losing your own funds? If so, how long do you feel you will need to practice before moving over to a real account? Some brokers do not offer a demo account while others offer them for different lengths of time. The shortest time span is a month; the longest is 6 months and some even allow trading in the demo account for an unlimited period of time.
  2. If a demo account is not important to you, perhaps you are looking for a mini account. Mini accounts are real accounts but require a very small deposit and a smaller amount of trades than a regular account. Very few brokers offer mini accounts so if this is what you want, you will have to look carefully for one who does.
  3. Some brokers offer traders 80, 90, even 100 different assets to choose from. As a beginner in Forex, this should not be a principal feature. In fact, the smaller the choice, the easier it is for you. You can focus on the major currency pairs and the most popular stocks and commodities.
  4. Customer support is an essential feature for all traders but especially so for new traders just entering the market. Most brokers offer 24/5 chat and telephone support. There are some, however, that provide help 24/6 and include email and Skype as additional selections. The more support you can get, the more confident you will feel from the moment you try opening a brokerage account to the point where you place your first trade.
  5. Most brokers today make the application process pretty simple. Applying for an account can be done from the landing page and is usually just a three-step process. Placing a trade is the next step and that too is never very complicated and can be done in just a few minutes. Confirmation is sent by email.
  6. Look for the broker’s educational material. Most brokers offer basic tutorials in video form but there are others that take it one step further and provide full texts and courses that cover much more than the basics. In addition, some brokers offer e-books and seminars to their account holders and webinars have become a new draw for all Forex traders. You should most definitely be looking for as much free education as you can.
  7. Advanced traders look for additional features: economic calendars, technical analysis, market reports and more. These are key features that can make the difference between a profitable trading experience and a losing one.
  8. Commissions and spreads differ from one broker to the next and it is certainly worth checking and comparing several brokers before deciding on one.
  9. The design and composition of the broker’s website can also determine your comfort level. Many sites are very busy with ticker tape numbers flashing across the screen and loud sounds accompanying each page. Look for quieter websites with just the information you need to get started and nothing more. It puts less pressure on the newbie traders and also helps the experienced trader.
  10. Always choose a broker that falls under the supervision of a recognized regulatory organization. Without this certification, you have no legal recourse should the broker go bankrupt or run off with all your money.

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