How To Choose A Forex Broker By Fxstay
This decade has witnessed rapid increase of the traders and investors in the Forex Trading all around the world. More than a trillion USD trading is done everyday in the Forex market but the successful traders are not more than 10%. The main reasons of the failure of rest of traders and investors are trading without analysis or incorrect analysis, trading with high risk, no practice of demo account and incorrect selection of the broker. The best way to save yourself from high risk is don’t open a position that you cannot hold for the longer period. Before trading from a live you must practice Forex Trading from a demo account as that will help you to understand all the pros and cons of this business.
Trading without analysis may earn you some money in one or two events but it cannot be helpful all the time and finally you will lose the earned money. So do the fundamental or technical analysis before trading. If you are a beginner then you can also take help of experts or brokers for analysis. The counting of brokers has also increased this decade and now there are many brokers offering brokerage services. Selection of a wrong broker can have an adverse effect on your capability to trade effectively. The difficulty in selection of the broker lies in the fact that all the brokers do not offer same services and same policies. So you should select a Forex broker that have the policies you are comfortable with and offer the services you need. Follow some steps to select your Forex broker.
Regulated Forex Brokers have fixed regulations to follow and they are also accountable to the responsible authorities. If you are trading with these Forex Brokers, maximum information is available on their website. You can also check their past performance. You can also check if a Forex Broker is regulated or not. First find out the country where the broker is registered and then find if any regulatory agency is monitoring in that country or not. Select a broker from that country only where its activities are monitored by any regulatory agency.
Selection of the right trading platform is next important step in selection of the Forex broker. After you have checked that the broker is regulated or not, check the software offered. The best way to check it is create a demo account and start trading in demo mode. Trading in demo mode does not need your real money to get knowledge about the broker and the software. Trading in demo mode is done from your virtual money. Never go with a Forex broker who is not offering a demo account for practice. You can practice in demo mode from all the trading platforms that you listed after sorting out the regulation of the Forex Brokers . Following links will be helpful in selecting a broker.
24 Hours of Support
Trading in the Forex market do not stops for a second in first five days of the week starting from Monday so your broker should also provide support for 24 hours. Don’t prefer to go with a broker that is not offering 24 hour support. All the reputed brokers offer 24 hours of support. Then check out the mode of support. Is the broker offering support through direct telephone or only through an email address? Don’t go with the broker offering support through direct telephone because it may increase telephone expenses unnecessarily and also don’t trade with the Forex Broker that support only through an email address because support from an email address cannot be trusted. Prefer to trade with the Forex broker offering 24 hours of support through live chat function on their website. All the reputed Forex brokers offer 24 hours of support through the “Live Chat” on their website. Finally, you should also check if your broker offer services on the Phone or not. For example, if your computer crashes or you are busy in some other event then can you close the position over the phone or not. An ideal broker offers phone services also.
Different types of account
Check out if your broker offers different types of account or not. The two mostly used accounts are the standard account and the mini account. Standard accounts are bigger accounts more useful for the experienced traders or investors whereas a mini account are smaller accounts useful for the beginners. The main difference between the standard account and the mini account is that in a standard account, trader can trade in the lot of 100,000 units but with a mini account trading in the lot of 10,000 units can be done. A standard lot is 10 times of a mini lot. Both the accounts have difference in payouts also. 1 pip in a standard account values $10 whereas 1 pip in the mini account is equal to $1.
Profit potential in a mini account is less but still it is more useful for the beginners because the risk involved is also less. So if you are beginner then you should start trading with a mini account and select the broker that offers mini account. Don’t go with the broker who only registers standard accounts and places your money in high risk.
Brokers offer leverage anywhere from 100:1 to 400:1. Remember higher the leverage you take, higher will be the risk of your funds. Trading with high leverage is the main reason why many novice traders ruin themselves. Don’t prefer to go with those brokers offering leverage of more than 10:1 or margin of 1%.
If you are willing to trade successfully in the Forex market for years, then you will also need to withdraw your money again and again. So this is the last step check withdrawal fees of your broker. Find out what they charge to wire your money directly to your account.