Choosing a Forex Broker
After you’ve had enough fun with micro-bids and worked out your own tactics you will probably want to start real trading. To do this, first of all you will have to choose a broker/dealing company amongst the hundreds out there. Unfortunately there are only a few of them that are worthy of your attention.
In order to make the right choice of broker (in other words, your future business partner) you should pay attention to the following statements:
- The website of a dealing company should be trust-worthy and decent, without unnecessary decorations. The website’s wording and use of language should be grammatically and syntactically correct. It should provide a large selection of study-texts, an FAQ page and a simple navigation system. The “About Us” page should be detailed and contain all necessary licenses and permissions.
- The license of a company should cover the trading and investment services of the broker.
- The “Contact Us” section should contain detailed information about the address of the company’s offices and their phone numbers. Don’t be lazy: Call the broker, and if it’s possible, give him a visit.
- You should study the contract very thoroughly – as seriously as your desire to profit from the Forex market. It is very unpleasant to lose in the exchange game but it is much more unpleasant or even shocking to win a fortune and then lose it because of having been inattentive while reading the intial contract.
- Learn what jurisdiction the broker is under in order to know whom to consult in disputable situations.
- Browse through internet forums and news, use search engines and other independent sources to collect all possible information about your potential broker. But keep in mind that many people waste their time gabbing and repeating rumors that are often inaccurate or untrue.
- Find out how many years your potential broker has been in the market.
The list above should be enough for you to go to the next stage.
Trading conditions
Let us imagine that you’ve picked out 10 working brokers out of 100 according to the criteria described above. How would you narrow down the selection further? Very easily: find out their trading conditions and then estimate the profit you might earn based upon them. So, figure out the answers to the following questions:
- How clearly are the trading conditions expounded on a broker’s website?
- To what extent do the conditions appeal to you?
- How large is the range of currency pairs they offer? What instruments do they offer? What is the spread? Are there any additional payments you have to make? Do spreads change and if yes under what circumstances? Will the broker inform you about the change of spread?
- What are the requirements applied to margin leverage, deposit and swaps?
- What will happen in the case of unexpected developments?
- What are the fees for transferring or withdrawing money?
None of the criteria on the list above are so important they would exclude a broker on their own. Except, perhaps, the first one. This is because unclear or fuzzy trading conditions are the cause of unexpected mistakes and problems, and you would be well advised to exclude such a broker from the list automatically. In the end it’s all about your interests.
Ease of use
After looking at the security and profit aspects of the brokers you’ll probably only have 2-4 brokers left on the list. To narrow the list down further you need to think next of your personal
comfort:
- What are the deposit and withdrawal conditions of your account?
- How fast are trades fulfilled?
- What trading terminals and applications are available? How reliable are they? What are their features?
- Does the broker have restricted working hours or can you contact them 24/7?
- What languages does the support team use?
- Do you like the color gamut of the broker’s website?
Use as many factors as you need, and be fastidious until you end up with just one broker. Then start working with him.
