The choice of your broker is one of the most important decisions in currency trading. A good and bad broker can make a lot of difference in your FOREX trading experience, therefore it is very important that you select a right broker. Like stockbrokers, currency brokers provide the trader a trading platform, market information, research and various trading tools to enable the trader to make the best decisions. Here is a quick guide to selecting the best FOREX broker in the market.
Reputation is the most important thing to look out for when choosing a FOREX broker. You want to deal with a reputable and experienced broker that can provide you with the best support and services possible. A long and proven track record is the best testimonial of an efficient and reliable service. Oanda and CMS FOREX are examples of some of the more reputable brokers in the market.
Another important criteria are the spreads and service charges imposed by the brokers. Generally, you should pay no more than 2 - 3 pips per transaction on any major currencies. This factor should be balanced against the tools and the information provided by the broker. If the broker offers a good range of trading tools, up-to date news, and advice that are very helpful to you, it may be worth it to pay a little more for the extra support.
The margin provided by the broker is another popular consideration when choosing a broker. Brokers provide leverages anywhere from 100 to 400 times of the capital in your account. Marginal trading is only recommended for experienced traders due to the high risks involved. For beginners you may want to find a broker that offers a great FOREX demo account. This account will allow you to practice your techniques and strategies before you start to trade with real money.
Many brokers in the market offers free trial offers that allow you to test out their trading platform and support services before committing. You can make use of these trial offers to test out the services of various FOREX brokers before selecting the broker that suits you best.
