Tips for Selecting the Best Forex Brokers
When you trade forex you have to use a broker to access the market. The broker you use can actually have a large impact on how successful your trading is. This is why you have to find the best forex brokers and choose the one that best suits your needs. To do this you need to consider a few points regarding the broker.
Compliance to Regulations
While the forex market is largely unregulated there are certain countries that do have regulatory bodies. When you look for a forex broker you need to see where their offices are. The location of their offices will tell you which regulatory body they fall under. You should then visit the body’s website to ensure that the broker complies with the regulations they have set forth.
Any brokers based in the US have to comply with regulations set down by the CFTC. If they are registered with the body and adhere to all the regulations they should be listed on the website. The CFTC also has a list of brokers that do not comply and this should also be viewed to determine whether or not your potential broker is good.
Details of the Account
Each broker offers different things with their accounts and you need to verify what these are. One aspect to look at is leverage. Leverage is regulated in many countries, but in loosely regulated countries brokers are able to offer very high leverage amounts. These amounts can range from 20:1 to 200:1 depending on the broker and the regulations.
You also have to look at the spreads being offered. Most retail brokers do not charge a commission fee rather making their money from the spreads. There are two types of spreads which are fixed and variable. Variable spreads change depending on the market liquidity and volatility. Fixed spreads remain the same throughout the year.
The initial deposit amounts also have to be considered. Some brokers allow you to open micro and mini accounts with very small deposits. However, there are other brokers that do not offer these accounts and require large deposits for standard accounts.
Best Forex Brokers and Currency Pairs
The forex market trades just about every currency currently in use. However, not all forex brokers offer trading of all these pairs. All brokers should have the commonly traded pairs, but you have to verify that they offer the pairs you want. This is particularly important if you are thinking of trading exotic pairs or ones that do not have any of the major currencies in them.
The broker you use should have 24 hour customer service that actually works. As the market is open all the time you are able to trade at any time. This also means that something could go wrong at any time. Having the option of contacting customer support is important, but only if you are going to get help. You should test the customer support before you sign up for an account or you should find out what other people have to say about the support offered by the broker.
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