If you're new to forex you need to know that forex brokers can vary
tremendously in what they offer. I have listed 5 important things that
you need to look for in making your choice:
1) Low Spreads
FOREX brokers don't charge a commission, so the spread of the currency
pair is how they are going to make money. The spread, which is
calculated in pips, is the difference between the price at which a
currency can be bought and the price at which it can be sold at any
specific point in time. Examine these spreads as they very from broker
to broker and can save you money.
2) Account Types
Forex brokers will offer you several different account size and type
options. The mini account is the smallest and it requires you to trade
with a minimum of typically $250. The mini account is good for new
investors testing the forex waters and offers a higher leverage. The
standard account will give you the option of trading at a variety of
different leverages, but it also requires a minimum initial capital of
$2,000 to get started.
3) 24 Hour Customer Service
The Forex market is open 24 hours a day, 5.5 days a week. Because of
the decentralized clearing of trades and overlap of major markets in
Asia, London and the United States, the market remains open and liquid
throughout the day and overnight. Because of these hours, it is
important that your forex broker offers 24 hour customer service.
4) Charting and Research Tools
FOREX brokers offer many different trading platforms for their clients
just like brokers in other markets do. Many forex brokers even offer
free one on one mentoring services to new forex traders, so before you
decide on a broker do some of your own research and see what tools the
broker offers.
5) Quality Institution
Forex brokers are usually linked to large banks or lending institutions
because of the large amounts of capital required. Check to see if the
broker is registered with the Futures Commission Merchant (FCM) and
regulated by the Commodity Futures Trading Commission (CFTC).
tremendously in what they offer. I have listed 5 important things that
you need to look for in making your choice:
1) Low Spreads
FOREX brokers don't charge a commission, so the spread of the currency
pair is how they are going to make money. The spread, which is
calculated in pips, is the difference between the price at which a
currency can be bought and the price at which it can be sold at any
specific point in time. Examine these spreads as they very from broker
to broker and can save you money.
2) Account Types
Forex brokers will offer you several different account size and type
options. The mini account is the smallest and it requires you to trade
with a minimum of typically $250. The mini account is good for new
investors testing the forex waters and offers a higher leverage. The
standard account will give you the option of trading at a variety of
different leverages, but it also requires a minimum initial capital of
$2,000 to get started.
3) 24 Hour Customer Service
The Forex market is open 24 hours a day, 5.5 days a week. Because of
the decentralized clearing of trades and overlap of major markets in
Asia, London and the United States, the market remains open and liquid
throughout the day and overnight. Because of these hours, it is
important that your forex broker offers 24 hour customer service.
4) Charting and Research Tools
FOREX brokers offer many different trading platforms for their clients
just like brokers in other markets do. Many forex brokers even offer
free one on one mentoring services to new forex traders, so before you
decide on a broker do some of your own research and see what tools the
broker offers.
5) Quality Institution
Forex brokers are usually linked to large banks or lending institutions
because of the large amounts of capital required. Check to see if the
broker is registered with the Futures Commission Merchant (FCM) and
regulated by the Commodity Futures Trading Commission (CFTC).