When beginning in the forex trading market, one of the most difficult decisions to make is that of choosing the right broker. Although most brokers provide the same basic trading platform, there is often a vast difference in what they offer their clients, both in terms of trading conditions as well as customer support. I've listed a few criterion for choosing a good broker.
Minimum Account Balance
As a small investor you will need a forex broker that does not require a large balance to open a trading account. Most forex brokers today will allow you to open a mini account with as little as $200. A good broker that allows a $50 minimum is Easy-Forex .
User-friendly forex platform
Some forex brokers may require you to download an online forex trading platform to your computer in order to execute trades. Others may permit you to make trades directly over the internet. When starting out in forex, it is advisable to sign up for a free forex demo account and trade with play money while testing the brokers system.
Customer Service
Perhaps one of the most important considerations in forex trading and one that is often overlooked is the issue of customer support. Whether you are a forex amateur or an experienced trader, having the support and advice of a reliable, dedicated customer service team is invaluable. The only way to determine the quality of a support team is to contact them and note how they deal with your inquiries. Are they quick to respond to your inquiries, do they give reliable technical and market advice; do you get the feeling that they know the forex industry well enough to advise others, or are they simply good sales people? This may be difficult to determine, but as the only point of contact between yourself and the brokerage, it is important to do so.
Analysis Tools
To analyze spot trends, currency prices and plan your entry and exit points, you will require charting and technical analysis tools for your forex strategy. Most forex brokers offer basic services free of charge with an expanded set of tools for an added charge.
Margin Requirements
The lower the margin requirements, the more leverage you will have available for your forex trading. If a broker allows you to use 200:1 leverage, which means you can use $1,000 to trade $200,000 in currency; you can use margin to produce huge profits. However, do not margin yourself too much because you could also incur huge losses.
Order Excecution
Currency prices are constantly fluctuating and any delay in the execution of your orders can substantially lower your profits or increase your losses. Search for a forex broker that can consistently execute your trades at the price you see on your screen. An occasional delay may be understandable, but if it happens frequently look for a new broker.