Every day more than $4 trillion dollars in average are traded on the foreign exchange market. This makes this market the biggest financial market in the world. However, there is no central marketplace for the forex and this is why all traders have to choose their own broker.
Good news is there are lots of brokers out there offering different possibilities and services to traders, however, you will have to be sure that when you make this decision, it will be the best possible. Here are some things you will need to take a look at while choosing your forex broker.
1. The regulatory compliance is one of the first and most important things you need to take a look at. Usually, a reputable US forex broker will be a member of the NFA (National Futures Association) and will also be officially registered with the CFTC (Commodity Futures Trading Commission) as a merchant and dealer. Make sure that the broker you have chosen will actually cover those things, because this means it is reliable and will do the work for you. Any compromises with this point are not good.
2. Pay serious attention to the details of the account because any forex broker has different ones such as:
Margin and leverage – all forex traders have access to different leverage amounts depending on the broker, the leverage can vary from 50:1 to 200:1 or even more. The leverage is a loan extended to margin account holders by the brokers.
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Let’s give a brief example with 50:1 leverage. You have 1000$ in your account and thanks to this leverage it is valued to 50 000$. Usually leverage works in favor of the trader, but you have to be very careful because losing money is as fast as winning. Remember to use leverage with caution!
Spreads and commissions are the next thing on the list. Any broker out there wins via those spreads and commissions. Usually any broker that uses commissions charges specified spread percentage. This is why you have to take a look at this point, you don’t want a broker with too high spreads and commissions because you will have to spend lots of money on this.!
Customer service is another aspect you need to take care for. Usually the forex trading occurs 24 hours a day and this is why the broker you have chosen has to have 24/7 customer support. Another thing is that the staff has to be professional so that a person will not have any problems communicating with them. When considering your future broker, make a quick call and check the customer services. It tells a lot of the broker.
Last but not least – the trading platform. This is the portal to any markets and due to this fact it has to be really great and user-friendly. As such, traders should be able to customize the platform in the best way possible and in way that fits their needs and expectations. Remember that well-designed trading platform is the one of the most important things that attracts the attention to people. Don’t underestimate the power of the trading software because it might be crucial for your future forex trading.