When you decide to enter into forex trading, the biggest trade you have to make is of choosing the forex broker. You give away all your capital to that person or the company and think of gaining profit out of it. You may be having the great strategies in mind, but if the broker spends off your money, then all your hard work and market study will go in vain. Therefore, it is imperative to choose the forex broker wisely. Here are few effective tips which will be useful for you to find the best broker which will satisfy all your needs while protecting you from any type of scam.
- Assess your needs- Before beginning your search for the broker, assess your own requirements. It is necessary to decide beforehand, whether you are going to trade a little or very much. Are you going to capture small moves or trying your hands with bigger moves. If you want to trade a lot by capturing small moves, then consider ECN brokers.You pay commission on each trade and the spreads in the forex trading are much tighter. It is a matter to be considered while trading with small moves.So, in this scenario, search only for forex ECN brokers. However, if you think you don’t need ECN broker, then also you have lots of options available.The capital amount you have in hand is also a thing to be considered while choosing a broker. It is also important to decide how you are going to deposit and withdraw the money as different brokers follow different methods for the same.
- What the broker must offer- Once you decide on what type of broker you want and make a list of few best suited to your need, it is time to see what they offer. There should be no dealing desk in between. As a trader it is important to directly interacting with the market. If the order goes to dealing desk, it takes time for it to get initiated to the market. The price gets changed during this time and you need to re-quote. It is more likely that you will lose the trade opportunity due to this delay. Don’t choose a broker who will introduce you to dealing desk. Forex ECN brokers are the best choice in order to avoid this situation.The broker you are choosing must be regulated by the countries like US, UK, Canada, Japan, New Zealand or Australia as they have well established financial system.Also choose the one who is available for you whenever you need. Open forex trading account for demo and send them emails with so many questions. See in how much time he responds. This will give an idea about their customer service.
- Check the review- When you have shortlisted few brokers for helping you inforex trading online;read the reviews written on various websites and discussion forums by other traders who have worked with him. However, you have to make sure that those reviews are written by creditable sources. Sometimes the losing traders put the blame on the broker. So, try to find the reality behind this.
- Personally assess the broker- Before finalising any broker out of the ones you have shortlisted, take a personal test of them.
- As said earlier, first go for forex trading account demo and take an idea about trading conditions. Make sure your orders are executed instantly, spreads are tight and platform is stable.
- If the demo works fairly for forex online trading, then open a live account with small amount of capital. Continue with this at least for two weeks. This is good opportunity for you to test the customer service of the broker.
- Withdraw some of your funds, although it may cost you some money. It will help you know if the withdrawal can be done easily.
- If you find everything up to the mark, then go ahead with that broker.