choosing broker

How to choose Broker

There are many of forex brokers to choose from. You must have your own set of guidelines in selecting a forex broker. Here are a few thumb rules in forex broker selection.

 Location

It is key to select a broker who has clearly stated in the website the location of the Company’s head office. This is very important. Keep away from brokers with an offshore dispensation because you might find it hard to withdraw money from your accounts with them.

Regulatory Approvals

Your broker should be registered with the suitable regulatory authority in the country of its basis. This decrease the possibility of your trade with fake brokers. Your trading funds will be far safer if your broker has right regulatory certificate.

Type of account

If a broker offers you only a standard account with a minimum deposit of $2000, it’s of no use to you particularly if you don’t have the money to sponsor that account. In that case you should be looking for a broker who could offer you a mini-account with say $300 or $500 or a micro-account which requires just $10 or $25. Start small, get comfortable with the volume of trading and then change to one standard account.

Leverage

If a broker offers you a leverage of 100:1 or 400:1 it simply means the broker will lend you $100 for every $1 of your own capital and $400 for every $1 of your capital respectively. In other words leverage is the money your broker is willing to lend for your trading activity.

Spread

While selecting the type of accounts you should be looking at the spreads too. The better is to go in for a broker that offers you a fixed spread. If you were a day trader spreads should be a point you should be looking at carefully. But if you were planning to keep your forex positions open for a long term trade then a few more points in spreads will not matter much.

Trading Platform

You can decide which is better trading platform for you by trying out the demo first and then asking the broker if it really corresponds with the real version. You should got  check up for few points about the platform itself. Firstly how quick is your broker’s order execution system? Second is to make sure that the platform offers you an automatic order execution process. That means that once you set the “limit” price or a “stop” price the trade should really close at that price. The final analysis the choice of a trading platform depends on what sort of platform you are comfortable with.

Support

Forex is a 24-hour market 5 days a week. So you must select a broker who is accessible to you at all times during this period. If the broker has multilingual support services its simply great.

Conclusion

Remember that the decision to execute a forex trade is your own unique decision. The accuracy of that decision depends on the inputs provided by your broker.

 

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