Checklist for Choosing A Forex Broker
Choosing a forex broker is important in maximizing your trading profits and making sure your trading experience is smooth.
Here you will find a checklist so that you can find a broker that will maximize your forex trading experience.
1. Execution Only
Your broker is only there to help you transact your orders and make sure your account runs smoothly – they should NOT give trading recommendations.
Many novice traders think this is a good idea and their broker knows best, however if he could make money trading he wouldn’t be a broker!
Brokers are there to transact orders and that’s all.
If you don’t take responsibility for your trading you won’t win.
2. Look for tight spreads
This is your cost of doing business and the less you pay the more of your profits you get to keep.
Look for spreads from your forex broker of 3 – 5 pips for trading the majors.
There should be no other commissions or fees – make sure the spread is all you pay.
3. Leverage
Look fro leverage of at least 200:1, although many brokers will offer you more and some go as high as 400:1.
4. Trading platform
Check it out and see how usable and reliable it is and that you get 24 hour support, if you need it at anytime for any problems you may encounter – not all brokers offer 24 hour service so beware.
5. Ease of funding and minimum investment
Today, many forex brokers will let you fund an account online with as little as a $100.00.
If you are a novice starting small is a good way to get your feet wet.
These companies also allow small minimum trades.
If there are online payment facilities, you can fund your account quickly and equally get your profits back quickly.
6. Guaranteed stops
If you are a novice trader and worried about the unlimited liability that margin trading presents, you may want to guarantee your stop and there are many brokers who will provide this comfort for a fee.
7. Extras
A forex broker is not there to give you trading advice but it is nice to get extras such as demo accounts, free newsletters, reports and other educational material, which can help you improve your trading – You will find many brokers who offer a lot of extras and if you are new to trading they are well worth having.
Your forex broker is important and if they provide all of the above in terms of service, you should be able to maximize your trading experience and profitability.
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