7 Tips For Choosing Forex Brokers - Ratinah

7 Tips For Choosing Forex Brokers - The more we live the more we know that we depend on many things other than our minds. Intelligence will only take us so far, but unless we use a system set up for our convenience, we are likely to fail. So is the case with the Forex market

7 Tips For Choosing Forex Brokers - Ratinah

7 Tips For Choosing Forex Brokers - Ratinah

The way the market works means that we have to work through a broker or market maker to initiate and complete our trades. You can find Forex brokers in every part of the world just as you will find currencies traded in almost every corner of the world. However, you should consider a few points when you go shopping to find the right broker to help you with your trading.

1. Qualification

Perhaps the most important thing of all is to make sure the Forex broker you use is properly qualified. Therefore, choose a broker registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). This means that you have legal protection against abusive and fraudulent trading practices that may arise.

2. Is the broker regulated? 

This means that when you sign up to use their service, you will have protection and insurance against any internal fraud. Also, your funds will remain separate from the broker's operating funds.

3. What business model does the broker use? 

Some brokers are market makers while others are ECN brokers, providing a trading desk for multiple traders.

4. Check out the types of spreads they offer

The spread is the difference between the bid and ask prices of the currency you are trading. The broker doesn't make a commission on your trades, instead they take the spread as compensation. Your broker may also offer fixed or variable spreads, and those spreads can be different for large accounts and mini accounts.

5. Slipping

Can they give you details on what slippage they expect to occur during a normal and fast moving market?

6. Margin requirements

What are their margin requirements. That is, what percentage of the investment in your trade they expect you to pay to open a trade. You'll also want to know about their margin calls, and the time it will take you to respond to those calls.

7. What is their Rollover Policy? 

Do they have a minimum margin requirement that they use to earn interest on each overnight position? Plus, do they have any other terms or conditions about you earning interest on every rollover.

After you've done your research and chosen one or more Forex brokers, then it's time to set up your trading account. When your funds are clean, you can start trading. Remember to read

Look carefully at the trading instructions to find out how the broker can help you manage your trades. If you neglect some relevant details, you could lose money on your first trade. So take the time to read the details and ask the broker or their support staff any questions you may have before you open your first trade.

That's 7 Tips For Choosing Forex Brokers - Ratinah


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