One of the first decisions a new Forex trader must make is which broker they will use for their trading. They all sound good according to their website, but how do you know where to trust your money? Here are some guidelines to help you choose a good Forex broker.
Look at the amount of capital they require for you to open an account.
If you are new to trading, you may want to work with micro lots.
You will need to find a broker that deals in these small lots.
You should look for a broker that only requires a few hundred dollars
for the initial deposit until you become comfortable with the Forex market.
Consider Customer Service
Since the Forex market is open twenty-four hours a day,
the broker should respond to issues or questions at all times.
They should have a staff that you can contact regardless of
what time it is locally. Though trading is done through the internet,
you should be able to contact the broker's office by phone if you
have a question or problem.
A good Forex broker will offer a platform that is easy to use and reliable. You should be able to open a demo account to practice before trading with real money. This allows you to try it out and see if it works for you.
Make sure the broker offers the currency pairs you want to trade. They should offer a variety of pairs so that you don't have to find a new broker when you want to expand into new trading pairs.
Check Their Reputation
Do your research when you find a broker you like and check them out before you open an account. Put their name in a search engine along with the word "complaints" to see if anything comes up. Ask about them on Forex message boards. If anyone has had problems with the broker, they will most likely be very vocal about it.
At the same time, you must be selective about the reviews you pay attention to, since most brokers will have some complaints unless they are new to the business. Look for reviews from professional traders that have been in the business for some time.
Ask for recommendations from veteran traders. They will be more knowledgeable about who to trust and who to avoid. Once you find a couple of names you like, open demo accounts with both of them and make sure they offer the features you are looking for in your trading.
Find a Regulated Broker
Even though Forex trading is not regulated, brokers are. Make sure you choose a broker that is regulated with the official regulatory agency in your country.
Most important, take your time in choosing a broker. Don't get in a hurry to begin trading and pick the first name that comes up. You want to find someone you can develop a long-term relationship with and can trust with your money.