Idea5-step guide is to tell you what you need to choose a forex broker

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Step 1: Choose a trusted forex broker


Of course, the first and most important consideration when selecting a forex trading broker involves determining whether or not your funds will be secure in the broker's hands.

There are four aspects you want to examine to make sure your money is safe: Domicile, Regulation, Reputation, and Funding.

Domicile
If the domicile of your forex broker is in a major country with well-developed financial regulation, this legal infrastructure can often help you recover your funds if problems arise. Make sure to double-check the domicile of the company even if the address looks reputable. Sending your money to an online forex broker based in less well-regulated places like the Bahamas or Panama may not be in your best interests. Trying to exert your legal rights in a foreign jurisdiction can be a daunting task, especially if there is no regulatory oversight in the background to support your effort. Avoiding forex brokers with a dubious base of operations will actually help narrow down considerably the search for a reputable broker! And you want to save time, right?

Regulation
The second security signal to check is whether the broker is regulated or not. You should be aware that opening an account with a forex broker who has taken the trouble to register with a regulatory agency - while a very good idea - will still not guarantee that the company is legitimate or that your trading funds are safe.

Nevertheless, by having a regulatory agency involved, a certain amount of recourse exists for a broker's clients if the company files for bankruptcy or if other problems develop that put the return of your trading funds at risk. To conclude, you should always choose a regulated broker.

Reputation
The third point to check out is the broker’s reputation. Be sure to check the Internet for either favorable testimonials or continuing complaints about the brokers you have chosen for consideration. Especially look for reviews and comments where traders have had difficulties in withdrawing their funds. If you see evidence of this, don’t waste any more time on this broker.

Funding
The fourth and last point when it comes to choosing a trusted broker involves the financial security of the broker. Your money will always be more secure in the hands of a forex broker with great financial backing. The broker should be well funded, or have a trusted owner or parent company. These supporting relationships are often disclosed on the broker’s official web site on tabs like “About Us” or “Press Releases”. Although all the top forex brokers represented here should be well funded, it is always a good idea to make sure one extra time. You may also want to visit the website for the regulatory body in the region. Regulators often publish annual statistics on the capital funding for their licensees and whether they are adequate or not. You will also want your broker to hold your funds in segregated accounts at Tier-One banks. Safety and soundness are key factors when dealing with a broker.


Step 2: The broker’s offer and services


After you have found a broker that you think you can trust with your money, it is time to look at the offer and services you should expect from your broker.

My top list of things to check out include the following:

Spread Margins
Execution of orders
Trading Platform
Support


1. Spread Margins
Forex brokers usually charge a commission on deals by taking part of the bid offer spread, so the tighter their spreads, the more money the trader saves. If your preferred trading strategy is more active than most, then spread margins will be more important for you.

2. Execution of orders
Speed is really important when it comes to execution of orders. You should test his speed and effectiveness with a demo account with the broker you have chosen. More on demo accounts later. In some cases, the demo account may not be a good barometer. You should also check other online reviews to find out if there are “slippage” problems or constant re-quotes from the broker. If the speed and effectiveness is not there, then choose another broker!

3. Check out the trading platform
You need to determine the ease of use and reliability of the broker's trading platform, in addition to the quality of the online market information offered by the broker to its clients. Does the platform need to be downloaded, as with Metatrader4, the most popular and widely used platform on the market? Some downloads are easier than others. Is the platform a proprietary design? This situation may be good or bad. Demo testing can help here, as well. It is not always easy to decide the best forex trading platform since it depends on your needs. Are you on the go and need to access your account via an iphone or Android device? Some brokers support mobile trading. Others do not.

4. Support
Remember, the forex market is open 24 hours a day almost 6 days a week, if you count from the opening of the week in Sydney Monday morning until closing in NY Friday afternoon. See the forex market opening times. Different time zones can impact the accessibility of customer support services. If the broker’s support crew is on one side of the globe and you are on the other, you might need support from your broker on a 24-hour basis. We highly recommend that you choose a broker with 24-hour support.


Step 3: What to watch out for


Beware of Unusual Trading Rules
Beware of forex brokers with arcane trading rules, such as giving you a minimum time to hold a position or denying you to “pip hunt”.

Beware Outrageous Marketing Claims
There are unscrupulous brokers that will attempt to attract your interest with marketing claims that seem too good to be true. In most cases, be suspicious of claims of high returns, super tight spreads, and professional support that will help you make a fortune in forex trading. Competition is high, and many brokers will say anything to get your initial deposit. Be wary and skeptical. You are your first line of defense when it comes to preventing fraud.

Avoid Brokers That Requote
Requoting is the situation where your trading platform shows a certain price, and then when the trader goes to deal on it, the platform makes them wait, and then shows them another often worse price.

Excessive slippage on stops
Slippage occurs when an order, usually a stop loss, is not executed by a forex broker at the rate at which it was placed. Instead, the order is filled at a rate that is usually worse than originally intended by the trader.

Front running orders
Front running means that the broker may be holding an order for an especially large commercial transaction and might trade it ahead of or "front run" the order to make money at the client’s expense.


Step 4: Other considerations


You will want to read the prospective broker’s official website and any documents thoroughly to get clear on both their terms and operational rules of the road.

We also suggest you give their customer support a test call. You will want to assess the helpfulness and market expertise of the customer service department when assisting you in getting started trading or in case a problem arises. Brokers that fail to answer questions or that put you on hold when you try to call in are best avoided.

Withdrawals and Deposits
Make sure that the forex broker's withdrawal and deposit policies agree with you. Some brokers charge exorbitant fees for bank or wire transfers, while some will even take PayPal.

Also, some brokers can make you wait an agonizingly long time to withdraw your funds. Make sure you have this information before you give them your money.

Make use of bonuses
Make sure to check out the prospective broker’s bonus offering. Often they will provide you with some kind of extra bonus with your first deposit. Some of them also offer other types of bonuses for you as a loyal customer. Make sure to understand the terms and conditions connected to the bonus.

What type of account to use?
There are demo trading accounts and live trading accounts. always recommend that you start trading with a demo trading account to check out the trading platform.
When you are ready to open a live account recommend that you start trading with a micro account first.


Step 5: Checklist of features


The following list presents many of the more desirable features and services offered by forex brokers. This list will help you prioritize your personal needs.


Competitive dealing spreads
Fast and reliable executions
Mobile phone trading support
Automated trading support
Dependable order execution on stop loss orders
Minimal slippage on stops
Easy deposits and withdrawals
Sign up bonuses and promotions
Trading in a wide array of currency pairs
Trading in other markets such as gold, silver and crude oil
Low initial deposits
Instructional material for novice traders
Personalized trading strategy and market advice
Economic calendars
Reuters or AP/Dow Jones financial newswires
Forex expert market commentary
Calculators and trading tools
Technical analysis tools
Charting software
Size of dealing lots
High leverage accounts
Competitive rollover fees


Most of these services can be obtained through a variety of online retail forex brokers, so it is up to you to determine what services you consider important for your personal trading needs. Your goal is to select the broker that best suits your personal trading needs

Concluding Remarks

As you might expect, the larger the forex broker, generally the more services the broker can make available to their clients, the tighter their dealing spreads, the more reliable their trading platform and the faster their transaction executions are likely to be. Thus, in general we recommend that you choose one of the larger brokers.

Any qualified forex broker will provide you with a reliable trading platform, 24-hour customer support during forex trading hours, charting and technical analysis tools, access to quality forex news and commentary, competent order execution, competitive dealing spreads and a wide choice of currency pairs to trade. Brokers offering any less than this basic package should not be considered in the selection of a forex broker, since today’s market offers a broad blend of online retail forex brokers for your consideration.

Performing adequate due diligence on the front end on your prospective forex broker, before making your first trade, can literally save you thousands of dollars and prevent nightmares from ever happening down the road. Finding the right broker for you and your trading needs is your top priority. Invest the time that this task requires, and you will never regret it.
These users thanked the author bilbao for the post:
zebra1
what we want: 1+1+1+1+1+1+1+1+1=9 <3
what market delivers: 1+2+8+7-4+0-5+8-4-5+1=9 :problem:


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