Placing your money in someone else’s hands is a serious matter, thus you have to be extremely selective. The first thing that you must make sure is how good their services are; secondly, you must ensure that they do their business honestly. The same considerations applied when you need to select a forex broker to put your money. In this case, you have to make a forex broker comparison, so make sure you already have the candidates on your mind.
Check out these points in your fx broker candidates and see who provides the most beneficial services:
Check out their leverage
Bigger leverage means bigger opportunity to make more profits, but it also means greater risk when your analysis goes wrong. Leverage is certainly an essential factor, but don’t opt for a broker given that they provide bigger leverage than the others.
I believe 1:200 leverage is sufficient. Several foreign exchange brokers even offer as much as 1:400. Well, it is your call. Just make sure to do a basic calculation before taking a position and put your stop loss appropriately to avert being wasted by the market movement.
See their spreads
If your main strategy is long term trading, another 1 or 2 pips in spread probably means next to nothing to you, but if you’re a day trader or even a scalper, it becomes a huge concern. Based upon their spreads, fx brokers can be divided in 2 categories:
– Fixed spread; this type of broker employs fixed spread and get profits from that.
– Floating spread; this sort of forex broker give you real spread (which constantly changing) and ask for commissions for each of your trade.
Floating spread may seems lower, but it isn’t always more profitable. Get a demo account and test them yourself. How many times do you get spread below the conventional fixed spread? Does the floating spread worth the commissions?
Test their trading platform
Trading platform is a solid reason to pick a broker and dump the other. Some trading platforms are more dependable and more sophisticated than the others.In this case, you need to prioritize fx brokers that offer such trading platforms.
It’s impossible to find out until you try them, so I suggest you open up a practice account and test many of them. I recommend the well known MT(MetaTrader) as my primary choice, but several broker’s trading platforms can be very convenience to use.
Minimum deposit
While I don’t think that $25 will get you anywhere in forex trading, a number of people may have different opinions. They might think it is good for practice or training purpose where you have actual money on the line. That way, you can learn a bit about trading psychology and stay calm when the market goes on the wrong way. Needless to say, you might not be as calm if it was $1,000 at stake, but it’s a good start anyway.
More about forex broker and how to recognize a scam brokerage on forex broker with online service . Be sure to read selecting best trading system to discover how to get yourself a profitable system (of course, after you discover your broker).
There are many aspects in comparing forex brokers, but I think these 4 are the biggest concern. Find out the one that can accommodate your need the most and your trading life will be easier. Of course, don’t forget to run several tests to make sure that they aren’t scam brokerage.
