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.