Forex brokers can either be individuals or agencies who will do their best to help you profit from the market and cover the risk of the investment that you made. You Forex trading will largely depend upon your broker as he or she will help you to succeed in the Forex market.
The broker does several things: helps you to manage your accounts, executes your orders and keeps you informed of market trends. You will need to take a look at the forex broker rating before you decide to choose a broker.
If you have Internet access, then you will find many website that suggest forex broker ratings. Some of the important things to know is what the minimum amount is to open an account, will there be any commission charges, etc.
You must make sure that your Forex broker has the right qualifications. Now that your list has been narrowed, it is time to research your choices. One good idea is to send some e-mails out to your customer service people and see how long it takes for them to respond.
When considering a forex broker, find out just how fast it takes him to execute an order. You should also find out how much slippage you can expect.
Here are some other key points to consider when looking for a forex broker:
1. Available currency pairs – Each forex broker will have, at the minimum, the seven major currencies.
2. Transaction costs – The forex broker is paid based on the bid ask spread. There should be no other hidden charges or fees. If the spread is smaller, that means it is better for you. Pip spreads vary from broker to broker so do some competitive shopping.
3. Free analysis tools – You will need to have some charts and technical analysis tools to be able to spot trends and plan your entry and exit points. Most brokers offer their basic services at no charge. If you require something over and beyond the basic service, there may be an additional charge.
4. Immediate execution of orders – You will need a broker who will be able to consistently execute your trade swiftly.
5. Superior customer service – If you need assistance, your forex broker should respond quickly and efficiently to any question that you may have. Representatives should be available around the clock either by telephone or e-mail.
6. Margin requirement – If you want to have more leverage, choose a low margin requirement. You can use margin to your advantage to produce huge profits.
7. Minimum account balance – Since you are a small individual investor, you must try to find a forex broker who does not require a hefty balance to open an account.
8. User-friendly trading platform – Before deciding to go with one particular broker, choose a few forex brokers and ask to sign up for a free demo account.
You would do well to trade with play money while you are deciding which broker and which program works best for you.