How to choose a broker for Forex trading
The first thing a trader who wants to try his hand at forex trading has to deal with is choosing a reliable intermediary - a broker. Unfortunately, in the financial markets, as well as in everyday life, there are companies with a "tarnished" reputation, with a lousy quality of services, or even fly-by-night companies, which, after all-pervading publicity, collect money from potential traders and immediately disappear.
All these points are unpleasant, and in this article we will try to choose a broker solely for practical reasons multiplied by a dose of skepticism and experience.
First of all, you should limit your search to brokerage companies that have been on the market for a long time and have positive responses on thematic forums, websites, personal blogs. You should not be lazy and ask questions to the authors of posts. As a rule, people are always eager to share this kind of information. You can start with a small thing - ask about the quality and cost of service. As a rule, the larger the company, the cheaper the cost. By the way, it's better to avoid new companies, even if they offer better terms.
Then it is necessary to correlate the brokerage company with the amount of potential deposit. If a trader plans to open a cent account for one dollar, in this case financial requirements to the broker may be minimal. And a big amount of money is a different matter. Here again banks and large international brokers have an advantage.
Keep in mind that dubious companies can't operate with consistent quality. In order to make a profit, they will need to zero out their clients' accounts from time to time. They do this in different ways, most often by throwing quotes. In addition, Internet access is not stable everywhere and in case of a heavy load on the company's server, which occurs, for example, during news releases or economic statistics, the Internet can just "drop" and when it is restored many traders find out that they were left without a deposit, because they missed big movement against themselves and just could not close positions or place protective orders. Serious money should certainly be deposited with reputable companies that are not known for this kind of "shenanigans".
Some brokers try to impose additional fee-based services on traders that they simply do not need. Naturally, they are concerned first of all with their own profit and not with the high-quality service to their clients.
Another "slippery" moment is different restrictions or obligations. Usually they are not disclosed openly, and the trader faces this problem after opening an account. More often an unscrupulous broker forces the trader to make a certain amount of deals during a certain period of time. For example - a deal per day. It is not always consistent with trader's trading strategy and, consequently, leads to the drawdown and loss of the deposit.
The broker's assistance is also of great importance. A serious brokerage company has analysts on its staff, who, of course, can give you advice on the near future, paying attention to emerging trends and pointing out the risky moments.
You should pay attention to the possibility of different types of communication with the broker, in order to be able to manage your positions not only online, but also by using a landline and mobile phone if necessary.
Additional services will also speak in favour of the broker - various training, informative, analytical and other materials will facilitate the trader's work and make it more profitable.