There are so many forex trading broker companies advertising their services on the internet, in magazines and on TV, how do you know which one to choose?
Forex brokerage services can be a complex business and many new traders give up even trying to understand and just go for the one that they see advertised most often.
However, this is usually a mistake. Soon, many of these traders are looking around again, a few months older, a few hundred dollars poorer and a little wiser.
Of course it is better to make a good choice the first time around, and the good news is that it is possible. You just have to understand how forex brokers work and what you should or should not expect.
Before the rise of the internet, foreign currency trading was only possible for banks, hedge funds and other large investors. So the brokers that have been established for the longest time expect their clients to invest several thousand dollars in what is called a standard account.
These brokers will deal directly with the market in a similar way to stock brokers. Their charges or spread are usually low in pips or percentage terms because so much money is involved on each deal.
However, as a beginner you are probably going to be limited by your account size and may not be able to choose one of these well established brokers with a low spread.
You will probably wish to open a mini account with just a few hundred dollars, and you will want to have a good range of charts and indicators provided for your technical analysis, a trading platform that is easy to use, and a demo account so that you can test out your systems.
Fortunately, there are now many of these beginner-friendly forex trading brokers on the internet.
A good way to choose between brokers is to read reviews. The internet allows a level of openness that was not possible a few years ago, and you will certainly find reviews of all of the larger brokers online.
Most forex brokers will have both positive and negative reviews. You will quickly realize that beginners tend to blame the broker for anything that goes wrong in their forex trading, so do not be swayed by customers who criticize the broker because they lost money. Look for reviews from people who have more experience of trading, if possible.
Always read the fine print too. Most brokers will have an area of their website where they spell out their spread and other fees, business model and membership of any regulatory bodies. It could be in their terms and conditions or in an FAQ.
All of these points are very important when it comes to choosing a good forex trading broker, so be sure to spend a few minutes on the fine print before you sign up.
I’m still learning forex, needs the guidance of my friends who have advanced in playing forex, a very promising business
I wish more people would write blogs like this that are actually fun to read. With all the fluff floating around on the net, it is rare to read a blog like yours instead.