Gold Trading: Partnering With The Right Broker
Trading gold is far more expensive compared to trading any forex currency pair this
is because the minimum pip spread requirement for Gold is from 40-60 pips. The Gold pip spread is different from every broker and getting the correct broker is vital in succeeding in trading gold.5 simple steps in choosing your correct broker
Process 1: Identify your Broker Needs
Set your standard on what kind of services you need from a broker. Here are some basic questions that can guide you on identifying your broker requirement.
1. Are you trading forex only or also gold? Forex, Gold, Silver, Stocks, Commodities.
2. How much are you willing to invest? Start up and additional funds you will put up.
3. How are you going to fund you account? Some brokers offers bank wire transfer, credit card, paypal and manual checks.
These should have helped you set up your broker standard. You then move to step two.
Step 2: Study brokers profile available
There are a lot of brokers offering different services and products available online and this guide can help you streamline your research to finding qualified brokers based on your need and requirement. Here are some points you should consider.
1. Broker registration. Here are the regulating authorities your broker should be accredited or a member of with good standing.
a. United State based brokers
i. National Futures Association or NFA
ii. CFTC - Commodity Futures Trading Commission
b. United Kingdom based brokers
i. FSA - Financial Service Authority
You should carefully considered their accreditation before sending them your money.
2. Leverage. This will make or break you in trading. If you are winning this will work for you but if you are losing it will work against you also. Look for brokers that have flexible leverage that will suite your trading profile.
3. Spread. This is how most of brokers earns from your trade, some offer fixed spread while others offer variable spread. Gold spread is one of the highest in the industry therefore look for brokers that offer low spread.
4. Trading platform. This is the primary tool you will be using in trading; you should understand how their platform works. You should consider how user friendly their platform and how it suits your trading style.
Step 3: Funding your account
It is suggested that for beginners you should not trade with real money first or at least not using large amount of money. Look for brokers that accept a small amount of money as your initial fund or capital and also offers demo trading. Start with a small fund to try out trading and your broker at the same time.
Process 4: Filtering Brokers that passed your standard
This will be the deciding factor on where you will first open your trading account, whether its for Gold trading or forex trading.
1. Compare their company information like, headquarters, number years in the industry, company size in terms of employee and capital.
Compare also the account they offer like, mini, micro, standard and special accounts. Check spread, leverage, initial capital requirement, deposit options, withdrawal process and options, rollover interest.
3. Trading platform. It should be accurate and flexible to fit your trading style. MT4 - MT5 are a good gauge of brokers that offers a good trading platform.
4. Finally give a high consideration to their customer service.
Step 5: Open a demo account and start trading.
This is the only way you can say that your broker is true match to your requirement. Try their services and provide them feedback on how they can better serve you.
Choosing the right broker in very important in your trading business, make sure you learn how to get the right broker for you
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