Choosing a Foreign Exchange (Forex) Broker - Top Ten Tips

By: Jim S Smith

Top Ten Tips To Find a Forex broker - These are the crucial questions you need to ask yourself when choosing a broker:

1. Customer Service
- How easy is it to contact the Forex broker's customer service?
- Does the Forex broker have online chat, email, and/or telephone customer service?

2. Account Size
- What is the required minimum balance to open a trading account?
- What is the minimum trade size required by the Forex broker?
- If there is unused equity, does it earn interest whilst in your trading account?
- Is it possible for you to trade a different standard lot size traded?

3. Transaction Execution
- How quickly does the Forex broker execute orders?
- Can the Forex broker provide you with automatic execution?
- At what point can you request a quote?
- If the Forex broker does not agree with your trading style will you be placed on manual order execution?

4. Forex Broker Regulation

- Will your trading funds be insured and kept separately from the Forex broker's operating funds?
- Is the Forex broker regulated? Which authority regulates the Forex broker?

5. Trading Margin
- What is required margin of the Forex broker?
- Is the required margin different for standard and mini accounts or the same?
- Does the margin ever change? For example, is the required margin different at weekends or dependent on the currency pair being traded?

6. The Spread
- How tight is the spread?
- Is the spread larger for mini accounts or the same as the spread for standard accounts?
- Is the spread variable or fixed?
- Does the spread change when news announcements are made? If so by how much?

7. Forex Broker Commissions
- Does the Forex broker charge commissions or is the spread alone how the broker makes their profit?

8. Transaction Slippage
- What is the usual slippage in a normal and a fast moving Forex market?

9. Trading Platform
- How many different currency pairs are you able to trade with the Forex broker's platform?
- If you want to use an automated trading system doe the platform include an Application Programming Interface (also known as an API)?
- Does the Forex broker's trading platform operate reliably and consistently during news announcements or when a market is moving fast?
- What additional features does the trading platform include? For example, trailing stops, mobile trading?

10. Trading Rollover Policy
- In order to earn interest on an overnight position does the Forex broker have any additional conditions or requirements?
- Is a specific minimum margin required by the Forex broker for you to earn interest on an overnight position?

Yes, it is a lot of information you need, but it is certainly worth the effort once you become a profitable Currency Trader.

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* Jim S Smith is a professional researcher and writer.

Article Source: EzineArticles.com