The Forex Broker Game
By: Charley Warady
Go into Google and type in the search, “Forex broker”. You have now received over two million results. The best way to choose an appropriate Forex broker for yourself is to go to around page thirty-five, close your eyes and place your finger on a name on the screen. That company will then become your broker.
Choosing a Forex Broker
It sounds like a strange way to choose someone that's going to handle a substantial amount of your money, but oftentimes it seems that this is the way the novice Forex trader is making his choice. Before you even start trading you have to make an important choice, and that's who is going to be your Forex broker. You would think that a decision like that would make a person do research, ask questions, and be careful. You would think. The fact is, however, so many people fall into the trap of Forex scams and shady Forex brokers that it has given the entire industry a bad name, and it shouldn't. The Forex market is a wonderful, legitimate way to make a living; but like any industry, it has its crooks and scam artists. The first rule of thumb is the obvious one: “If it looks too good to be true...it probably is”.
The easiest way to choose a broker is to trust Daily Forex and their ratings of brokers. Read our Forex broker reviews, that’s what they’re there for. But let's say you'd like a little more scrutiny in your decision. There are a few ways to weed out the good ones from the bad.
The first thing you want to do is to make sure the broker fits your needs. Make sure it offers a demo account; find out their minimum balance and trading; whether or not they have real-life support or is it all done through email. Things like that. All very basic stuff, and most Forex brokers will take care of that. Even the shady ones.
Regulated Forex Brokers
But here's something you might not have thought of. Make sure your broker is regulated. Find out which regulatory agencies he is registered with. They should be registered with the Commodities Futures Trading Commission (CFTC) as a Futures Commissions Merchant (FCM). The CFTC and the NFA (National Futures Administration) were created to protect the little guys (and the big guys) from fraud, scams, and other unsavory practices of ne'er-do-wells. Use their services and information. They have websites, and phone numbers if you have any questions. The Forex broker you choose is going to have your money in their hot little hands. You should feel completely comfortable with that before you give up a dime.
Don't get sucked in by flashy web sites and bold promises and print. This isn't a casino you're going into. This is a business, and like any business, you want to do due diligence. Take some time and get all your questions answered. Then, after you've had all your questions answered, find out from other Forex traders what questions you might have missed. There is no such thing as being too careful when choosing the right Forex broker for yourself.