As if there were not enough things to learn when you are doing foreign exchange trading. The forex broker you choose is one of the most significant trades that you will ever make. You are giving all your trading capital to them, expecting that you will be able to trade with your investment and withdraw it when it is time to get your profits.
You might have an excellent foreign exchange strategy, but if the broker you hire runs off with all your money, all your hard-earned money, hard work, and researches were for nothing. If you want to find an active forex broker, you have to follow some in-depth tips and tricks to make sure that you will end up hiring the right broker that suits your needs, without giving scammers an opportunity to take advantage of you.
What are Forex brokers? Visit https://www.investopedia.com/terms/forex/c/currency-trading-forex-brokers.asp to know more.
You have to consider what you need
Before you have to look for any brokers, you need to assess yourself, assess what you need. Here are some things you can consider:
Are you going to trade a lot or a little?
Are you trading small moves or more significant moves?
If you want to trade a lot and capture small, you need to consider a specialized broker. You will receive a commission on trades, but you need to know that the spreads are a little tighter, which matters when you are trading for small moves.
If you think that you do not need a specialized broker, then you need to look for a broker that suits your need. If you are going to scalp trade, you will need a broker, fast. How much are you willing to invest as a capital? With small amount capital, you can trade, micro lots.
For example, if you have $5,000 and above, you can start by trading mini lots. Do not open a standard account unless you have $50,000 or more. Choose an account type and a broker that matches your financial capital. How are you going to withdraw and deposit money from your account? Different trade brokers can offer various payment methods. You need to make sure that the broker you choose suits your needs.
What can the broker offer you?
Now that you are finished assessing the things you need, and you want, as well as narrowing the list of potential trade brokers, you need to look for following from the brokers in your list. No dealing desks. If you are a day trader, you want to deal directly with the market and not getting orders from a trading desk, which can launch it in the market.
That can take a lot of time, and the results are often in “re-quotes.” It is when the price will be changed, and since you place the orders, and the trading brokers can ask you if you want to proceed. Because of sometime delays, the trade opportunity that you are going to get is likely gone.
You need to make sure that your broker has a license in the country, with a well-established, and a good financial system. For example, if an online foreign exchange broker like XTB have permission to operate in the United States, United Kingdom, New Zealand, Japan or Australia, you need to choose them instead of shady brokers that can’t provide any regulation papers. If you are a day trader, you need to demand competitive spreads.
Take for example, you are trading U.S dollars or Euros during a session, expect the range to be as close to point in percentage as possible with a non-Electronic Communication Network account. Two PIPs are too high. You need to eliminate that trading broker from your list. With ECN account, your spread should be less during a major session or half a PIP. You have to hire a broker that is available when needed.
Open an account with the brokers that you trust or interested in and send the emails with a question in it. You have to monitor how thorough and how fast they work and respond to your queries. If their customer service is not that good, you need to eliminate that broker from your list.