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How to Find an Online Forex Broker to Explode Your Forex Profits

By James Roshwood

Republish: EasyPublish™ Published: 25Jun2009 Word count: 1000 Viewed: 588 time(s) Get Free Content For Your Site

One essential ingredient that you must have when starting on line foreign currency exchange trading is an account with a forex trading broker. The currency trading broker is your connection into the markets and they will provide the essential cover that allows you to trade with margins.

The question is how do you select the best forex brokers. There are at least 7 criteria points to be considered when you are deciding where best to shop for a forex currency trading broker.

1. Dependable

This works on multiple levels. You need a broker that you can rely upon to be trustworthy and who will not all of a sudden vanish like a puff of smoke from the internet taking with them all of your hard earned money. The FX market is surprisingly devoid of regulations so there are a vast number of forex brokers to choose from and as is like with many things in life some forex trading brokers are more honest than others.

The first step is to check up on the reliability of the currency trading broker and to confirm your online forex broker is regulated. In the USA this means that you want a forex trading broker that carries a current registration with the Commodity Futures Trading Commission (CFTC) and also the National Futures Association (NFA).

Check for a forex currency trading broker with an unblemished record regarding any complaints logged against them on the National Futures Association website. Other countries have their own regulatory bodies for example the same function is performed by the Financial Services Authority in the UK.

Another consideration is whether the online forex broker's trading platform is reliable. The forex trading platform is the financial software that will connect you to the FX markets whenever you want to trade. If the online forex trading platform is often offline then this will cause you some major problems. For example you could miss out on either opening or closing a trade at the optimum time.

It would be best to check a number of online forex trading forums for feedback from individual users regarding the amount of downtime that they have experienced. Remember it is like with all online forums do not listen to the loudest voice as they may have a vested interest either way in recommending or not recommending who in their opinion are the best forex brokers

2. Services Provided by the Best Forex Brokers

The forex markets trade 24 hours a day from Sunday night to Friday afternoon EST. You will need to check that your forex broker's trading platform is available all of this time, and certainly the best forex brokers are and they will also offer 24 hour customer support on forex trading days.

Check that they cover at least the seven major currencies USD, AUD, CAD, GBP, EUR, CHF, JPY and again the best forex brokers certainly will.

The best forex brokers should offer you financial trading charts, technical analysis charts and instant execution of your forex trade at the price displayed.

3. Forex Broker Costs

Online forex brokers do not make commission charges but will make their income from the forex trading spread. The forex spread is the difference between the buy and sell prices on any currency pair. The forex trading spread can be anything from 1 pip or less and up to about 3 pips although this will depend upon the online forex brokers terms of service and the currency pair being traded.

The piece of the pie taken by the spread can make the difference between achieving a profit or making a loss in your forex trading account over both the immediate and also the longer term so you will need to check closely at what level the spread is calculated. If you can decide which pairs you are likely to trade most often, for example I prefer the USD/GBP trading pair which is known as cable, the spread on those pairs will be more important to you than on others.

Beware of special marketing tricks like special offers of lower forex trading commissions that may not last long once you have committed your funds.

Consideration need to be given on how much is the minimum amount of capital you can invest. Good advice given to most new traders is to start small so look for a forex broker who will let you open an account with $250 or less.

4. Margins which are also known as Deposits

Margin requirements vary from forex broker to forex broker. A lower margin requirement means higher leverage, and higher leverage gives you greater profits or losses on the same fund size. So low margins seem great when you are doing well, but losses will be bigger if things go badly.

5. Lot size

Lot size varies from one broker to another. Generally 100,000 units of currency is a standard lot, 10,000 is a mini lot, and 1,000 is a micro lot. Some brokers offer fractional lots which give you more power to set your own lot size. This could be perceived as a bonus or just an added complication depending on your point of view.

There are other considerations including the interest paid on your margin account, rollover charges and other FX trading policies. However, these are the main points that you should be looking out for when choosing the best forex trading broker.

6. Customer Service

This is very important especially when you have just started out using a forex trading platform. Like with all new things there will inevitably be teething troubles and you will want to be able to speak or email someone and get an instant response. The best forex brokers will provide this service.

7. Forex Exit Strategy

There will be a time when you want to realize some of the profits that you have made and be able to withdraw your money quickly and easily. Make sure that you are able to get your money within a couple of days as some online forex brokers insist on a 14 day delay which is totally unnecessary

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