After knowing and understanding all the possible benefits and risks in a forex trading, the next thing you need to do is to choose a broker. There are many brokers in the market offering different trading platforms. Now, you come to the part where you need to analyze and determine which broker gives you the best benefit. Before you take any decision, here are the things that you need to know in which you can base your decision on.
First of all, you need to check the brokers’ registration. Most of Forex brokers are attached to well-established banks and reputable lending institution. Beside that, make sure that they are also registered in FCM or Futures Commission Merchant and CFTC or Commodity Futures Trading Commission. This official registration is a must have requirement that you need to check on.
After you have checked the registration, now you will need to consider the spread offered by the brokers. You need to remember that the spread has a crucial factor in the forex trading, since the brokers gain profit from this spread difference instead of commission. The wider the spread will be, the more profit the brokers can make. So, as a trader, you need to look for a broker that offers a tight spread. You can save money with this tight spread.
You must be able to narrow down your choices by now, after analyzing both requirements above. At least the options left are the reputable brokers that cost you less. And now, you need to look at their trading platforms. The trading platforms here include charts, technical tools to analyze the data and charts, news and data bulletin and other supporting tools for trading systems. From the options left, look for the one that offers a great system in which you’re convenience with and the one that will give you all the necessary tools needed to succeed.
The next thing that must be carefully evaluated is the leverage. Different broker will offer different leverage. As you have known, leverage is used to express a ratio between the real capital in your account and the total capital that can be traded. For example, your broker offers a ratio of 150:1, it means that for every $1 of your actual account, your broker is willing to lend you $150. Even there are many brokers which offer a ratio of 250:1. The advice here is that when your capital is not too much, you need a broker which offers a high level of leverage. This way, you are likely to gain reasonable profits. However, if you have enough capital, you’d better choose a broker which offers a wide variety of leverage options. It is intended to make you able to vary the risk whenever you take any position. For example, if the market’s fluctuation is high, then a less leverage option will be the most appropriate for you.
After all of the considerations stated, the last thing to evaluate your broker will be the types of accounts offered. They usually offer some different types. There will be a mini account, a standard account and a premium account. The amount of money required in each type of account is of course different. The minimum amount for the mini one is usually $300, the standard one is $2,000, and the premium one is to some extent requiring a huge amount of money. These different types of account are usually different in the leverage levels as well. For example, mini account offers a high leverage, while for the standard account, the traders are offered with a variety of different leverage to choose from.
Eventually, those requirements above are the things that you need to carefully analyze in order to get the best broker for your trading.
Bookmark/share this article with others:First of all, you need to check the brokers’ registration. Most of Forex brokers are attached to well-established banks and reputable lending institution. Beside that, make sure that they are also registered in FCM or Futures Commission Merchant and CFTC or Commodity Futures Trading Commission. This official registration is a must have requirement that you need to check on.
After you have checked the registration, now you will need to consider the spread offered by the brokers. You need to remember that the spread has a crucial factor in the forex trading, since the brokers gain profit from this spread difference instead of commission. The wider the spread will be, the more profit the brokers can make. So, as a trader, you need to look for a broker that offers a tight spread. You can save money with this tight spread.
You must be able to narrow down your choices by now, after analyzing both requirements above. At least the options left are the reputable brokers that cost you less. And now, you need to look at their trading platforms. The trading platforms here include charts, technical tools to analyze the data and charts, news and data bulletin and other supporting tools for trading systems. From the options left, look for the one that offers a great system in which you’re convenience with and the one that will give you all the necessary tools needed to succeed.
The next thing that must be carefully evaluated is the leverage. Different broker will offer different leverage. As you have known, leverage is used to express a ratio between the real capital in your account and the total capital that can be traded. For example, your broker offers a ratio of 150:1, it means that for every $1 of your actual account, your broker is willing to lend you $150. Even there are many brokers which offer a ratio of 250:1. The advice here is that when your capital is not too much, you need a broker which offers a high level of leverage. This way, you are likely to gain reasonable profits. However, if you have enough capital, you’d better choose a broker which offers a wide variety of leverage options. It is intended to make you able to vary the risk whenever you take any position. For example, if the market’s fluctuation is high, then a less leverage option will be the most appropriate for you.
After all of the considerations stated, the last thing to evaluate your broker will be the types of accounts offered. They usually offer some different types. There will be a mini account, a standard account and a premium account. The amount of money required in each type of account is of course different. The minimum amount for the mini one is usually $300, the standard one is $2,000, and the premium one is to some extent requiring a huge amount of money. These different types of account are usually different in the leverage levels as well. For example, mini account offers a high leverage, while for the standard account, the traders are offered with a variety of different leverage to choose from.
Eventually, those requirements above are the things that you need to carefully analyze in order to get the best broker for your trading.
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