**Ultimate Tips for choosing forex brokers**

[jonathon]

The more we live the more we find out that we are dependent on many things besides our wits. Smartness will only get us so far, but unless we make use of systems set up for our convenience we are apt to fail. This is so with the Forex market. The way how the market works means we have to work through a broker or a market maker to get our trades started and completed. You can find Forex brokers in every part of the world just as you will find currencies traded in almost every corner of the globe. However, you should consider a few points when you go out shopping for the right broker to help you with your trades.

1. Qualifications. Probably the most important thing of all is ensuring the Forex broker you use has the correct qualifications. Therefore, choose a broker registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). This means that you have legal protection against any abusive trading practices and scams that may arise.

2. Is the broker regulated? This means that when you sign up to use their services you will have protection and insurance against any internal fraud. Also, your funds will remain separate from the broker's operating funds.

3. What business model does the broker use? Some brokers are market makers while others are ECN brokers, providing a dealing desks for many traders.

4. Look at the types of spreads they offer. The spread is the difference between the bid and ask prices of the currencies you trade. Brokers do not make a commission on your trade, instead they take the spread as compensation. Your broker may also offer fixed or variable spreads, and they can be different for large accounts and miniaccounts.

 

[okon2much]

Your points are very clear, thank you. I have always emphasized on reasons why must not choose a broker because it is popular. Once a broker gets a pass mark on the factors you've stated above, I think a trader can freely trade with it. When I was looking for a broker I really made my search. At last I came across Profiforex. There were so many positive reviews about profiforex despite it not being as popular as the big brokers. When I checked the site myself, I then knew why. Profiforex is superb; considerable spread, fast execution, fast withdrawal, online support, just name it. I am glad I found this broker cus I know what I went through trading with one of those so-called big broker.

 

[jonathon]

Glad that it helped you

 

[jonathon]

Following three are more such tips, which may help

1. Slippage. Can they provide you with details of just what slippage they would expect to occur during normal and fast moving markets?

2. Margin requirements. What is their margin requirement. That is, what percentage of the investment in your trades do they expect you to pay to open a trade. You also want to know about their margin calls, and the time you need to respond to such calls.

3. What is their Rollover Policy? Do they have any minimum margin requirements which they use to earn interest on any overnight positions? Plus, do they have any other requirements or conditions about you earning interest on any rollovers.

Once you have done your research and have selected one or more Forex brokers, then it is time to set up your trading account. When your funds clear you can begin trading. Remember to read
carefully the trading instructions to know how the broker can help you manage your trades. If you overlook some relevant details, you can lose money on your first trade. So take the time to read the details and ask the brokers or their support staff any questions you may have before you open your first trade.

 

[Fxpipper]

Just one point, on ECN accounts, brokers do not take in the spread but do charge a commission on the trades..makes sense since the spreads on ecn accounts are quite small.

 

[okon2much]

Just one point, on ECN accounts, brokers do not take in the spread but do charge a commission on the trades..makes sense since the spreads on ecn accounts are quite small.

I am so much afraid of ECN brokers. They can be tricky at times.

 

[Fxpipper]

Why? The commission they charge is quite small and the spreads they offer, very small. Can you explain more..so that I can clarify any questions you may have..

 

[4fxeatrader]

The more we live the more we find out that we are dependent on many things besides our wits. Smartness will only get us so far, but unless we make use of systems set up for our convenience we are apt to fail. This is so with the Forex market. The way how the market works means we have to work through a broker or a market maker to get our trades started and completed. You can find Forex brokers in every part of the world just as you will find currencies traded in almost every corner of the globe. However, you should consider a few points when you go out shopping for the right broker to help you with your trades.

1. Qualifications. Probably the most important thing of all is ensuring the Forex broker you use has the correct qualifications. Therefore, choose a broker registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). This means that you have legal protection against any abusive trading practices and scams that may arise.

2. Is the broker regulated? This means that when you sign up to use their services you will have protection and insurance against any internal fraud. Also, your funds will remain separate from the broker's operating funds.

3. What business model does the broker use? Some brokers are market makers while others are ECN brokers, providing a dealing desks for many traders.

4. Look at the types of spreads they offer. The spread is the difference between the bid and ask prices of the currencies you trade. Brokers do not make a commission on your trade, instead they take the spread as compensation. Your broker may also offer fixed or variable spreads, and they can be different for large accounts and miniaccounts.

Thank you for a very much for your post.
Which broker can you recommend?

 

[Rambo35]

I am so much afraid of ECN brokers. They can be tricky at times.

That statement makes no sense to me. ECN brokers are used by professional traders and the true ECN brokers are very transparent which is why I think your response makes no sense.

 

[Nyan]

That statement makes no sense to me. ECN brokers are used by professional traders and the true ECN brokers are very transparent which is why I think your response makes no sense.

However there are some bucketshops that use the word ECN to confuse traders. They don't let your money enter the interbank market while still charge you fees and commissions that normal ECN-brokers usually charge.

Of course we should avoid that companies.

 

[Rambo35]

However there are some bucketshops that use the word ECN to confuse traders. They don't let your money enter the interbank market while still charge you fees and commissions that normal ECN-brokers usually charge.

Of course we should avoid that companies.

I have come across so many who claim they are ECN brokers and after asking them a few questions it is obvious they are not.

 

[Fxpipper]

Oh yes, while the commissions charged may be small, since the broker is not an ECN, you get screwed - royally. This is why traders need to research the broker and determine whether they are ECN for real or not..

 

[tabalo]

Thanks for your post. I think regulation is the most important thing when consider a good broker because one good economic association has reviewed that broker. However, we need to see other factors.

 

[michael77]

I would like to give just one advice to all newbie regarding choosing a broker Forex. I do not like to mention any name over her but you should only choose reputable and trustable brokers and make sure they been maintaining their reputation for very long period of time.