An account with a forex trading broker is something that you must have when you are beginning currency trading. You need access to the markets to be able to trade, and the software provided by the top brokers will allow you to have this access. They will also give you leverage so that you can trade on margins and control much larger sums that you have yourself. Depending on the brokers’ software, you may be able to use a trading robot, like the Forex Megadroid robot on your account.
There are a few very important points to look at when deciding on a broker, let‘s take a look at them:
1. Reliability
Not all brokers are trustworthy, and finding one that is isn‘t that simple. The forex market operates worldwide and there is no global regulatory body, so some brokers are unregulated. Find out where a broker is located and what local associations they are members of. American brokers should be registered with the Commodity Futures Trading Commission (CTFC) and/or the National Futures Association (NFA). Other countries have other associations.
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Go to online forums and search for the name of a broker, to see if people have had problems with them. However, be sure to get several views. Do not accept one person’s point of view as fact. That person may have personal or financial reasons for praising or criticizing a broker.
2. Services provided
Because the forex markets operate 24 hours a day on weekdays, make sure the bokers service is available all through this time. You may also want to check if they have 24 hour customer support Monday through Friday.
Make sure your broker allows trading on the big currency pairs, that is USD against EUR, JPY, GBP, CHF, CAD, AUD. The should also allow some currency pairs that do not involve the USD, such as GBP/EUR.
All brokers will offer charts and technical analysis. Check that these meet your needs. You should also make sure that they execute orders immediately, and that you will get the price displayed at the time.
3. Charges
Forex trading brokers generally do not charge a fee or commission. Instead they make money from the spread, which is the difference between the bid and ask prices of a currency pair. Spread is usually in the range of 1-3 pips, depending on the broker and the currency pair, but it can vary at times of volatility. The size of the spread can make a big difference to whether you make profits in the long term.
4. Minimum account and lot size
The minimum investment will be an important factor. Brokers that only have standard accounts may require $10,000 or more to be deposited. Other brokers offer mini accounts which can require as little as $250 to open, which is obviously the better choice for a new trader.
5. Leverage
Using margin trading, you can control much cialis review online cialis no rx more money than you actually have in your account. It is possible to control up 100 times the money you deposited, the rest your broker will guarantee for you. Some brokers offer even higher leverage but be aware that the higher the leverage, the more you are risking on each trade.
Whether a broker will allow you to trade with a robot such as the Forex Megadroid download is another point you may want to consider. However, the 5 points mentioned above are those that should be your primary concerns when deciding which broker is right for you.
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Posted under Currency Trading
This post was written by admin on August 31, 2010
