One of the foremost questions in a trader’s mind when beginning a journey in the forex market is about the selection of a good broker, and most traders are aware that the broker is an extremely important variable in the equation that determines the success of a forex trading career. As successful, well-thought, well-crafted and well-planned your strategies and analysis may be, if your broker is unwilling to cooperate with you, you’re unlikely to achieve very good results.
To make sure that the broker you choose is a good and suitable one for your needs, there are a number of things that you can do, and in this article we’ll take a look at them.
1. Determine your needs
First of all, in order to make the right selection, you must make decisions about your own needs and expectations. What is your trading style? What is your risk preference? How much do you want to risk in an ordinary trade? What is the minimum level of leverage at which you feel comfortable as a beginning trader? All of these questions must be answered first before you reach the stage of examining the broker list and finding a firm that is suitable to your expectations.
2. Read some reviews
Once you have a clear plan and a refined idea on what you expect from the broker, it is time to read some broker reviews online at credible websites, and also to visit forums where experienced traders share their knowledge. You don’t need to perfect your own awareness of your needs before beginning this process but you do need to have a plan. Many of the things will become evident as you examine the information available and learn about what is praised and what is condemned.
3. Test the broker’s software, reliability, stability, connection
Once you have completed the previous stage and are in a position to ,make a selection, decide on a small list of firms, and scrutinize them much more closely, visiting their websites, installing their software, contacting them, demo-trading, and so on. In short, try to get a good idea on what they are offering you. Are the claims on paper match their actual performance? Are they reliable, is the platform stable? These are the questions that you should look to at this stage. Also make sure that the firm is regulated by the relevant authorities.
4. Contact customer support
Finally, you can contact customer support to have an idea of how helpful they will be in case there is a problem. Some firms have a weak customer support department, but have excellent services. Others have great customer service, but poor execution in practice. It is up to you to find about these by contacting them.
5. Ask questions (regulation, firm’s capital, etc
Don’t hesitate to ask questions about anything that interests you. The firm’s capital, owners, managers are never secret, and asking questions about them is always legitimate. If it turns out that they are less than accommodating, just seek another broker. Competition is very stiff in this industry, and what one firm losses, will be eagerly sought as a customer by another
The forex broker is your connection to the market. You cannot afford to ignore examining him thoroughly before making a decision. Take some time, and study the firm. It may take a bit of your time to do so now, but it will save you a lot of headaches in the future.
However, do I HAVE to have a broker to trade online? After I learn about Forex trading, can’t I just open an account, do the practice trading for months or even a year, and do the trading myself online? Is this a common practice, or do majority of investors hire a Forex broker to do the trading for them?
LASKA
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MCCUISTON
