Finding the Right FOREX Broker is Worth the Effort

When you are trading in the foreign exchange market, finding the right FOREX broker could make, or break you. Your trading depends greatly on the quality of the broker that you trade with. A particular strategy might work great with one broker and terribly with another. Therefore, you need to do everything that you can to find a quality FOREX broker.

Good Customer Service

Trading in the FOREX market is a fast-paced style of trading. Since you are trading with an online platform, sometimes mistakes will happen. Your platform might have errors along the way. A good broker will try to establish a good working relationship and fix problems for you. A questionable broker will lay the blame on you, and move on. 

Having a broker with good customer service will help every aspect of your trading. They can help you with deposits, withdrawals and questions about your trading platform. Many brokers even provide FOREX education for free. 

Low Spreads

Most FOREX brokers make their money on the spread between the bid and the ask price on a currency pair. When you buy or sell a currency, the broker makes their money off of the size of the spread. The lower the spread, the lower it costs you to make a trade. Therefore, you need to find a broker that has a consistently low spread. Many trading strategies rely on finding a broker with a consistently low spread. 

Regulated

The FOREX market is a global market. There is no central location for trading FOREX and therefore, there is not a single governing body that regulates brokers. Depending on what country your broker is located in, it may be regulated by a particular agency. For example, in the United States, most brokers are members of the NFA. This governing body regulates all of the brokers that are members and makes them adhere to certain rules. 

If you are opening a FOREX account, you will want to make sure that the broker you are using is regulated by someone. A FOREX broker could pop up anywhere and have no regulation whatsoever. When they are not regulated, there is nothing stopping them from simply keeping your deposit regardless of whether you win or lose. You will want to make sure that you do your homework on your particular broker and make sure that someone is regulating them. 

Instant Execution

Something else that you will want to look for in a broker is the level of execution that they have. When you are trading some FOREX strategies, your success may depend on how quickly you get in and out of the market. If you click the button to buy and it takes a long time to process your order, you could end up losing money as a result. Find a broker quickly executes trades and it will help you tremendously. 

blog comments powered by Disqus
Scottrade