The Best Online Forex Broker
If you are a forex trader, one of the questions that is necessary to be answered
is "who's the best online forex broker?" There are certain criteria to consider when you are in the search for your broker but the term "best" is relative to what situation you are in and what your requirements are as a trader. Here are some pointers you can use as you look for the best forex broker.
First of all, you should do a test drive. This is comparable to purchasing a car. It makes sense that you take it for a test drive first before buying it, right? In forex trading, it is highly recommended that you begin first a practice account with a particular broker you are thinking of becoming your main broker. A lot of brokers are now offering practice accounts so that you can get a feel on how it's going to work with the broker before you commit your money. If the broker doesn't offer practice accounts, you should not waste time transacting with them. It is safer and much better if you look for brokers that provide practice accounts and do not put time constraints.
Make sure that you utilize your time to this practice account in making mistakes, contact the customer service about different issues and get the general view of how the broker is going to work for you. One note of caution, though. Since there are a lot of brokers, the process will be quite different from a practice to an actual and live account. However, if the failure of practice account is so significant, you should expect that a live account cannot be far better.
The next thing you do is to do a research and find out the legitimacy and financial steadiness of your target online broker. Some of the things that you should find out about brokers are the following:
- Their compulsory registration with regulating bodies such as National Futures Association.
- Their longevity in doing forex trading.
- Their current standing based on records of Better Business Bureau.
- The stability of the company's financial situation.
Generally, brokers earn profit from fees trader's pay so you should be aware of these fees. The major source of profit of your broker and an operating expense on your part is the spread which is actually the difference in amount between ask and bid prices. You should be aware on how you broker handles these spreads. At least, find out whether the spreads are variable or mixed, what are the maximum and average spreads for every currency pairs and if the commission is per trade aside from the spread.
It is also your job as a trader to find out how a broker works on rollover credits and debits. Some forex brokers rollover both the debit and credit account of the trader while others only debit your forex account which means that you won't gain any credit for carry trades.
It is quite a tough task to know everything about a specific online forex broker and it's almost impossible to have all the information you want. However, knowing these pointers can help you in doing your research to get very important information so you can have the best forex broker.
The Best Online Forex Broker
By: Jared D. Ingram
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