FOREX BROKERS

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Choosing the Best Forex Broker

It’s impossible to invest all of your time and energy in the foreign exchange market, but at the same time, you want to increase your personal equity by participating in this profitable market. For that reason, getting the assistance of a forex broker is a good starting point because these are full-time professionals who can offer you advice and handle the trading process for you. To trade forex you need to open an account with a forex broker. The global nature of forex markets means that you have a wide choice of forex brokers to choose from, right across the world. The forex trading business runs differently to equity broking, where trades are made through a clearing house and stock exchange and where money is made from fees for every trade, often referred to as the “brokerage”. It is important to choose a forex broker you can trust because large amounts of money is involved. So to prevent yourself from unnecessary fraud and scams, it is important that you check out your forex broker before investing any serious money into a live trading account.

Sometimes it's hard to make a decision on which Forex broker to open our trading account, there are just too many of them. Most of them have different features, capabilities, weaknesses and advantages, for this reason I have created a checklist that can help you decide the broker to use in your Forex adventure.
1. Is it regulated? The first question you have to ask yourself is: is the broker I want to use Regulated ? There must be no doubt about this first point. All regulated brokers must submit financial reports to regulatory authorities, and when they fail to do it, authorities have the right to fine them or terminate their membership. This enforces Forex brokers to keep transparent financial reports. The brokers must be regulated by their local regulatory authorities, for instance, for brokers based in the US , they must be regulated by the NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission), Swiss based brokers must be regulated by the FDF (Swiss Federal Department of Finance) and so on. Also when a Forex broker is regulated allows investors to dispute any resolution, increasing the investor protection.
2. Trading Conditions This point refers to the features of the trading platform and the trading conditions with the chosen broker. Amongst the most important factors are: Spread - Obviously the smaller the spread on currency pairs the better the conditions are for investors and traders. Platform execution - Trading execution refers to how fast and consistent are the execution of trades. Some brokers guarantee fast and transparent executions during normal market conditions. Fractional trading - Some brokers allow investors and traders to trade on a fractional basis, instead of trading full lots "100,000 units" or "300,000 units", they allow you to trade "163,345 units" or "325,911 units". This is very helpful for trades risking certain percentage of their balance on each trade. Safety of funds - We need to make sure our trading funds are kept in a segregated account or at least insured.
3. Trading Tools Some forex brokers include valuable trading tools with some of their accounts that would otherwise cost you to subscribe to. These include real time data from the markets, charting tools and access to industry leading financial media, commentary and analysis.

Avoiding Scams

Unfortunately, there will always be a minority of unethical brokers trying to scam their customers. A bucket shop does not always enter trades into the general market by finding an opposing position. Instead, they take the opposing position, relying on the fact that most forex traders lose. Not only do they get the spread, they also keep their clients losing trade. Because that trade exists only on their internal systems, they can distort the market by widening in the spread. In a country with poor regulations, brokers could simply prevent trades from getting closed, to ensure that they don’t lose. Most trading platforms will allow you to put in “stops”; when a currency hits a pre-determined price, your trade is sold out. This is a helpful tool to minimize losses. However, an unscrupulous broker can see your stop and move the price to that point, sell out your trade, make a quick profit and then return the price to the previous position. To avoid this and other pitfalls, do your research, make sure your broker is credible and get the account and trading platform that suits your needs.

forex brokers Reviews

Try searching online for reviews on the particular firm you plan to use. If the broker you’re interested in claims to be a professional, chances are other people will give good feedback about them.