Choosing a Forex Broker
By: Adrian Friggieri
Choosing a Forex broker might seem something easy however selecting the right broker for Forex trading is a must. This will start with your trading plan as the broker will be able to handle your trading styles in order to work best for your daily needs. Let me give you an example here, some Forex brokers have spreads of 4 to 5 pips on some trading pairs, if you are going to do very short time framed trades or scalping then a 5 pip spread or even a 4 pip spread would mean that the trades will require more setup in order to be profitable for you.
The tighter spreads of 2 pips or even some Forex brokers offer a 1 pip spread on major currency pairs allows you to turn a trading setup on shorter time frames faster into profits and be able to collect a few pips more and faster. Apart from the spread some Forex brokers are not dealers but act very similarly to a gambling company where they accept bets on the market, simply the bet is against you! So they will be trying their utmost to make you loose all the time.
Some Forex brokers also may change their rules or their internal systems if they see you win a considerable number of trades just because they are paying the dealing not the dealing desk.
In my opinion a Forex broker should not be in competition with you and should not be on the other side of the trade as you are. Their profit should come from the spread or something similar and not from your losses.
Other things to take note of is the capital that these companies have, the last thing you want is for this company to be very unstable and small and not be able to pay you back your trading profit, so look for legal notes and market capital of these companies. Look for the online reputation, the Internet is a great source of information available 24 hours a day so you have no excuses as you did not know about any scams, you can find information on almost all the brokers on the market. This website is a great source of information for example, browse through well the various brokers and make a sound decision not on just the first broker in front of you but the one which most fits the trading style, tools and information you was looking for. Location is also an important factor when selecting your broker to trade Forex, if you live in UK you should not look for a broker in USA since the time zones will not be the same and if you need to contact the help desk you will not be able to while trading because they might be closed during night time in US! Might sound funny sometimes but you might need to call your broker at some point and you need to be able to know you can rely on their help.
Make a sound decision about your broker since you will need a good relationship for sure in order to grow your trading knowledge and profits.