Before you can trade Forex, you will have to have a broker. There is a myriad selection to choose from. You have brokerage firms from all around the world, from the US from Europe, Asia even Africa! The trick to a successful trading venture is to choose the right broker from the start. In order to choose that though, you will have to know a few things and learn what to look for. It will also be necessary to compare the different characteristics of each to see which one is most suitable to you. Like any good partnership, a relationship with your broker must be based on trust and good quality. Keep in mind the tips below when you make your selection.
Without a Forex broker you will not be able to make any trades. There are many different brokers, all of who claim to be the best for you and making a decision for one over another is not easy. There are some standard criteria that should be used for comparing and choosing.
First: The pips spread. This is a sensitive chord in the hearts of all traders and brokers. We traders feel that the lower the spread the better, while brokers seem to feel that a higher spread is better. Well the truth is that the spread is not as important as you think it is. What is truly important is that the spread is fixed and does not change! A change in the pip spread when you least expect it is disastrous for your trade. Imagine that you are in the midst of a trade and you placed your stop loss at 5 pips from your entry, suddenly there is a sharp movement in your charts and before you know it your loss has been hit. You blink your eyes a couple of times, and you see the price back where it was seconds ago. Has that ever happen to you before? It has hit me so many times when I first started that it stopped being funny. After I did a quick switch to a new broker all these strange sudden stop loss hits disappeared. A fix spread gives the trader room to plan a strategy that will increase the probability of a successful trade. You can nail down all the uncertainties and focus on the important things like making more money.
Second: Speed of order fills. Another area that you have to look out for as the last thing you want to do is that when you see a set up and decide to trade, the broker sits on your order. Your set up comes and it goes, and with that goes your chance at profits! Unless you are scalping a few seconds wait is acceptable, anything more than 20 seconds is totally out! You want your orders filled and if your broker can't do that it doesn't make any sense for you to actually pay them a commission at all does it?
Third: Reliability. A lot can be said about bad brokers with lousy reputations. In fact if you do a study on the different brokers you will realize that many professional traders do not use the charts that good brokerages provide. Most prefer to use other charting software and then place their orders with the broker. Of course we will still use their charts as an entry point indicator but frankly a broker is there to focus on filling trades not provide great charts. This leads us to our last point of reliability, you want to be with a brokerage that will pay you your profits you want to be able to access your account and fund it easily. If you choose to withdraw YOUR money then there shouldn't be a hassle at all. It is your money after all! Watch out for brokerages that demand you place a minimum amount in your account at all times before they allow you to withdraw. If you fall below that minimum the only way to get your money back is to go through a lengthy process of closing down your account before you see your cash.
Most online brokers provide good service and often it is when a new trader not understanding the terms and conditions which causes all these misunderstanding. Make it easy on your pocket, read all the fine print and should the brokers pull a fast on have no fear, go to the regulatory offices and seek redress. But if you had done your research before signing up you will not be in that spot in the first place!
Dr. Joshua Geralds is a successful Investment Specialist with over twenty years experience increasing the income of people world wide. Visit http://www.pipsalot.com to learn how to make steady profits through safe trading and down load your FREE e-book "Money Management" for a limited time only! |
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