Choosing a Forex Broker

Posted by admin 21/01/2014 Comments are off 711 views

Forex Broker

When choosing an Forex broker, it is important to keep in mind what you are hoping to achieve in the long term. You are about to embark on a partnership that could last many years, so a high level of trust and a good rapport are absolutely essential. Carefully consider what your main objectives are. The following check list should help you choose the most suitable broker for your needs.

Types of Account.

If you are hoping to trade using smaller deposits, you will need to find a broker who offers mini accounts. These accounts are also great for those who are just starting out in forex trading, as deposits are typically below $300.

Support Services.

As you can trade in the foreign exchange markets 24 hours a day, five days per week, it is really important to choose a forex broker who offers support all the time the markets are open. Also consider whether positions can be closed over the telephone in case of any issues with your internet connection at critical points in transactions. In addition, it may be worthwhile conducting a test to see how long potential brokers respond to help desk enquiries. Look for a broker who is willing to answer any number of questions and readily provides advice where necessary.

Leverage.

When choosing a forex broker, look at what leverage options they offer. Leverage, referred to as a ratio, describes the difference between actual capital and the trade allowance made available. For example, a ratio of 400:1 would see $400 available to trade for every $1 dollar capital invested. Remember however, that trading with high leverage doesn’t simply provide opportunity for big wins; it also significantly increases the risks of losing on a grand scale. It is sensible therefore, for leverage to be kept at a manageable level.

Recommendation.

Finally, as with any service, asking previous clients to share their experiences will help you to determine exactly how successful a particular broker has been in the past. Recommendation counts for a lot. Take time to ask around and find out why others have chosen their specific forex broker and any problems they have encountered. Ultimately, you must choose a forex broker you completely trust, especially given the nature of the foreign exchange business. The level of experience a broker has is quite significant as it indicates how knowledgeable they are likely to be. Traders are perfectly within their rights to request references from their potential brokers.

 

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