It is easy to find a Forex broker, but choosing which one to use is not so easy, especially because the choice you make can significantly affect your success in Forex trading. Here is what you should look for in a Forex broker.
Word of mouth is the best way to find the best Forex brokers. Join Forex forums and talk to members about their brokers and whether they are happy with the services they are receiving. You can also look through many of the Forex broker review sites which outline the various services offered and the reputation of the brokers.
Before you sign on to a Forex broker, always contact the customer service team with a few questions. A reputable Forex broker who will provide you with quality services should always have a good customer service center that will promptly get back to you (no more than 24 hours). Ideally, a Forex broker should have live customer support, not just email. If a broker isn’t able to give you good service even before you sign up, then it is a pretty good sign that you aren’t going to be getting good service afterwards either.
Find out if the Forex broker is regulated or not. You would be surprised how many Forex brokers are working with absolutely no regulatory oversight. Make sure you find out with which organizations the broker is registered and what protection that offers. Also, find out how the Forex broker protects your investment from fraud and in cases of bankruptcy.
It is crucial that you find out how your Forex trades are getting executed. For example, does the broker use ECN or no-dealing desk brokerage? You will need to find out exactly how quickly the orders are executed and whether they are automated or manually performed.
Spread and Slippage
The amount of spread and slippage that a Forex broker has can greatly affect the amount of money you make or loss in a transaction. For the spread, find out the size of the spread and whether it is fixed or varies. As for slippage, it is common for brokers to lose a few pips. However, there are some Forex brokers who will lose you up to 30 pips. You can ask in Forex forums or check with review sites to get a more accurate idea of the slippage before you sign up with a broker.
What is the Margin?
The margin can vary greatly depending on the Forex broker you choose. You will need to find out what the margin requirements are and whether these requirements are the same for each currency pair or each pair has its own set requirements. Find out when the broker issues a margin call. If you want to open a mini Forex trading account, find out if the margin requirements are different.
Read the details of the broker’s Forex rollover guidelines. Do you have to have a minimum margin amount to get rollover interests? Ask about the swapping rates for currency pairs when going long and short. Find out if there are any other terms related to making interest on rollover with your Forex trading.
Platform for Forex Trades
A good Forex broker should be using a secure, steady platform which moves quickly and rarely has any disruptions, like getting disconnected. Many of the best Forex brokers offer their traders various tools and special features to help them maximize their profits, such as automated features, one-click deals, trades from charts, and mobile features.
The account guidelines must meet your specific Forex trading style. See what the minimum amount is for opening accounts, the minimum trade size, whether traders can change the lot sizes, and whether traders can make interest on any unused margins on their accounts.