The forex marketplace has a daily volume of over $4 trillion, and brokerage firms act as the middlemen in this huge marketplace. A vast number of brokers connect clients to the interbank feed. The choice of a forex broker is a daunting task, considering that there’s an army of forex brokerage firms with different strengths and drawbacks.
|Broker Name||Visit||My Thoughts||Minimum Deposit||Next Step|
|Visit XM||I advise people to trade with XM because they make everything easy for the newcomer and the expert.||5 USD|
|Visit Etoro||Etoro’s OpenBook allows traders to see what others are doing in real time and what strategies are working, allowing you to learn from them and follow trends. Follow the best traders and profit from their strategies||50 USD|
|Visit Easy Forex||Easy forex allows very small trading amounts and low leverages, and mini accounts for newcomers with one-on-one consultation to get you going.||25 USD|
How to Choose a Forex Broker
There’s an overwhelming number of advertisements on the internet, sport commercials on TV, magazines, etc. offering investors varying options when it comes down to choosing a forex broker. Here are some factors to consider when trying to pick a forex broker.
An intuitive and professional looking website does not mean the broker is regulated. Different countries possess different regulatory bodies as well as requirement in view of financial firm registration. This implies that a trader should endeavor to choose a forex broker that is licensed by a regulatory body in countries with dedicated regulatory agencies. In the United States for instance, a registered broker will be a member of the National Futures Association (NFA) and will be listed with the United States Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant and Retail Foreign Exchange Dealer. Other countries with dedicated regulatory agencies includes Japan, Australia, UK, Eurozone, Switzerland, et al.
The safety of funds deposited with a forex broker is of paramount importance to every investor, which is why their market capitalization should be of utmost concern. The minimum capitalization requirement for brokers in the United States currently stands at $10,000,000, and this is indicative of the company’s strength. Forex brokers who fail to publish information on capitalization or regulation could signal a red flag.
Brokers offer different account types, but most commonly they include standard, mini, micro and practice or demo accounts. These different account settings represent varying trade size, which differ between brokers. Some brokers do not offer a free demo account, and you must fund your live trading account with them directly. If you are an experienced trader this may not matter, but for new traders, the use of a demo account is recommended.
Some account types require heavy deposits but often have institutional investors in mind. Fees may also vary depending on the account type selected.
Broker fees come in the form of commission and spreads. In most cases the fee structures are divided into three i.e. variable spread, fixed spread and commission charge in relation to a percentage of the spread, which is the difference between the bid and the ask price for a forex pair.
Your brokers’ trading platform can make or mar your forex trading experience. Most brokers will offer a downloadable platform, and many will offer a web-based version. If both are offered, examine them and test them out if can before deciding which to use.
Note!!! Due diligence is crucial before investing funds with a broker. If you check funds safety, account types, fees and platforms, you can avoid common pitfalls and make your trading experience more. This definitely has a way of increasing your winning odds in the forex trading business.