Thing to
Consider When Choosing a Forex Broker
The first particular step to your successful trading is to
choose a Forex broker. There are many questions that must be answered before
you are able to decide responsibly. Brokers' revenue and available information
will not facilitate this decision. Below you will find information on the basic
issues you may encounter when choosing a Forex broker and how to overcome those
issues.
You cannot move forward without a Forex broker, and choosing the
right one is essential and highly important. This is the reason why this topic
is one of the most discussed throughout Forex forums.
Before you start trading Forex, you need to set up an account
with a broker. The broker is essentially a mediator, individual or company that
buys and sells orders according to the retailer. Brokers profit either from
charging a fee for their services, or (and this is more often) from the spread.
Considering the huge number of brokers offering their services online, it's
likely you may feel helpless and overloaded by lots of information you may do
not know what to do with. And it is not easy to choose the right broker.
There are thousands of brokers, from the solid and reliable ones
to the crooked and dishonest trying to pluck their clients. You should take a
look on published references and stick to the advices to protect you from the
sophisticated marketing brainwashing. Broker is a necessary mediator between
you and the market. Its main task is to fulfill your orders to buy and sell a
currency on the Forex market. Services, such as the fast transfer of money to
him and back as well as a reliable platform should be standard of all brokers
above the average.
When selecting parameter, it is appropriate to give preference
to those that are related to your style of trading (fees, spreads, etc.),
instead of peripheral ones like language support, assistance on what to buy and
sell, etc.
Keep in mind one thing - before you start your search, it is
good to take note of the fact that terms like "best, cheapest, most
reliable, etc." make little or no sense in the industry of Forex brokers
and usually, the real interest of brokers who use those terms is solely to let
you trade currencies as often as is possible regardless of whether you earn or
lose money.
Criteria for selecting a Forex broker
There are several criteria that are worth considering before you
fill in the registration form with a broker. Competition among Forex brokers is
huge, which guarantees a neat chance for a good choice. It pays to take the
time to choose a broker that will best fit your needs and you will be able to
use their services for your benefit.
Regulation and References
The first thing you may want to take a look at when selecting a
Forex broker is the issue of security. You have to find out if the selected
broker is registered with any regulatory authority. In the United States, a
broker should be registered as Futures Commission Merchant (FCM) with the
Commodity Future Trading Commission (CFTC) and should be a member of the
National Futures Association (NFA). The two authorities - the CFTC and the NFA
are on the market in order to protect the public against fraud, manipulation
and illegal trading practices.
On the website of the National Futures Association's you can
check the registration of a particular company or individual with the CFTC and
the NFA. Focus on that the company you choose has a clean regulatory records
and solid financial background. And watch out! It is not recommend using
services of unregulated companies or individuals in any case.
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