How to Choose a Forex Broker

Most currency exchange market traders do the trading via some forex broker. A broker is a private person or a company buying and selling assets for and on behalf of investors. Brokers charge commission or fee for provision of their services. You should ascertain that the broker of your choice is registered as a futures commission merchant (FCM) by the Commodity Futures Trading Commission (CFTC).

This is required to make sure that the broker is not involved into fraudulent practices and does not deceive the traders. A forex broker should also maintain business ties with a large financial institution like a bank in order to have funds for margin trading.

It takes a lot of time and research effort for a private trader to choose a right forex broker. It may be reasonable to learn more about brokers from friends, forums and forex ratings, as these ways will most likely direct you towards reliable business entities. You can also be advised which broker to stay away from.

If you are thinking about online investment you can choose several online brokers and contact their support services. You will see and compare how quickly they reply to your questions. Thus you will know how fast they are in meeting the requirements of their customers. If you fail to receive a quick and satisfactory response to your questions, apparently you will feel reluctant about entrusting your money to such brokerage.   You should also remember that, like in other business areas, the pre-sale service may be of a higher quality than the post-sale one.

Before making a choice in favor of an online forex broker give a try to their online demo account. What functions are available? Is the software reliable? Does the broker provide a possibility of automated trading? Are there extra charges for additional functions? Some brokers charge a fixed fee; others ask for commission for their services.

It is recommended to carry out an all-round mini investigation before opening an account with a forex broker. How quickly will the brokers of your choice execute your purchase and sales orders? What is their slippage policy? What kind of spread do they offer: fixed or variable one? What is the cost of operations? What margin requirements do they make and how are they calculated? Is the margin rate equal for various currencies? Is it different for mini accounts and standard accounts?

Do not forget to specify the minimum account balance and interest payments on the account balance. Make certain that security of your assets is ensured.

Related Columns

The Worlds three Most Successful Forex Traders Ever

Whether you are new to trading Forex or an old hand at the currency markets, you are likely to share one key aspiration. One way to improve is to learn by example and to look at some of the most successful Forex traders in the world. In this article, you will learn about what the top Forex traders in the world have in common and how those strengths helped them to make huge profits. While you may have read about the statistics thrown around; suggesting that the ratio of successful Forex traders to unsuccessful ones is small. There are at least a couple of reasons...

The Pound Tumbles in delayed reaction

The Pound Tumbles in Delayed Reaction, as May gets Green Light from Parliament to Trigger Article 50. This has, so far, been a mixed week of good and bad news for Theresa May. The good news was that on Monday of this week she received the green light from parliament to trigger Article 50. The bad news was, however, very bad news indeed, after Scottish First Minister Nicola Sturgeon signalled the start of a legal process for an independence referendum. This quickly resulted in the pound tumbling against all of its Group-of-10 peer currencies...

Forex Awards live updates from iFX EXPO Asia 2017

Here today at iFX EXPO Asia 2017, taking place in Hong Kong, FX industry experts are gathered to answer burning questions. How to market electronic brokerage and succeed in China? What are the hottest trends in todays Forex trading when it comes to technology? How to deal with new regulatory demands imposed on forex brokers? What new opportunities does MetaTrader 5 give to FX business operation? These and many other hottest issues are now being discussed by forex industry professionals at the Hong Kong Exhibition...

Will 2017 be the Beginning of the End of the EU?

The UK is not going to leave the European Union. Of course, not. We are inextricably wound up with Europe. In terms of culture, history and geography, we are a European nation. Nick Clegg, British Liberal Democrat politician - 2010 to 2015 in the David Cameron coalition ministry. A special report on the current state of the EU and what could be in store, for the EU in 2017 - post Brexit and Trump and the rise of the EU populist movements, by Victor Romain, for Invest Ratings....

A Roundup of the Main Business News Headlines of 2016

Our moral economy went bankrupt long before our financial one. - Steve Maraboli, Unapologetically You: Reflections on Life and the Human Experience. A lot of crazy things have happened this year and I believe that I could be right in saying that many years down the road from now - many people are going to be talking about 2016. The history books will surely be looking back at 2016 in awe. This year also saw in some of the most surprising and, at the same time disruptive and seismic changes in the world of politics...

Warren Buffet backs low cost funds

EFTS - Exchange Traded Funds are quickly becoming the darlings of the financial world and are, in fact, even coming to dominate it. What used to be a relatively niche sector, is now rapidly becoming one of the biggest games in town - they now even have Warren Buffet blessing and seal of approval. Trading in Apple shares is worth over 3 billion pounds a day. However, that pales into insignificance with the 14 billion pounds, which is traded daily in the shares of State Street SPDR 500 fund. Today, the buying and selling of ETF accounts for almost 90%...