When you make the decision to look into forex trading brokers you’re going to find a wide variety (Dealing Desks, No Dealing Desks, STP, and ECN) to pick from, each one of this terminologies stands for different ways of dealing with the way orders are placed. Depending on your trading strategy and style it can be better for you to use one or the other.
A lot of questions come to mind when looking for a broker, as forex trading is unregulated you must be careful while choosing your broker. You should conduct serious research before selecting a broker to work with. Here are some main factors to take into consideration when looking for a broker.
Great customer support can be an important factor when choosing a forex broker. You want to know your broker is easy to contact should technical or account issues arise. Experienced forex traders know how costly down time can be, so it’s important to have someone to turn to immediately should any problems occur. The quality of customer support can vary considerably, so be sure to check it out before opening an account. This brings us to another important point, reliability. You want to make sure they’re using a stable and user-friendly trading platform. Are they executing orders as close to the “buy” order as possible? Are the quotes reliable?, in the beginning it’s always advisable to open a demo account so you can try with fake money how the platform works.
The spreads and commissions are also a crucial factor to take in to account. Some brokers offer very low spreads but charge higher commissions per every trade when you enter and when you exit the trade, so after some demo time with the platform check how was the impact in your account after spreads and commissions. They can make a huge difference in your trading performance over time.
If you live in the USA your options are more limited because most foreign brokers will not accept customers from the US, although there are some. Having your Forex broker away from home can be beneficial for some people to be more efficient in the Tax area. Anyway you should check with a Tax consultant if you plan to invest a substantial amount in your trading endeavor.
The next thing to look for when choosing a forex broker is to make sure the broker you select is registered with one of the regulatory boards (Commodity Futures Trading Commission or the National Futures Association). A big profitable broker with a lot of customers is far less likely to go bankrupt than a new broker just starting out. However it’s important to remember that your money is not FDIC insured like in a bank, so you must remember that even the best brokers can have problems at some point. Don’t put all your savings like if it was a bank, and also if you start to make consistent profits try to constantly withdraw some earnings.
The important thing is to research each different forex broker that you can find, ask some questions and then decide which one to use.
Check the website Forex Peace Army for a huge list of brokers and reviews from users.
If you want to help our blog to grow you can try our partner broker and open a demo account clicking here.