In the USA, a forex broker reputation for being a member of the National Futures Association (NFA) and registered with the Trade Commission Commodity Futures US (CFTC) as a Futures Trader Commission and the Foreign Exchange Dealer. The NFA is a self-regulatory organization of the entire industry for the futures industry in the United States. Elaborate rules, programs and services to protect the integrity of the market, traders and investors, and help members to comply with regulatory responsibilities. The CFTC is an independent government agency that regulates futures markets and commodity options in the United States. The mission of the CFTC is to “protect market users and the public from fraud, manipulation and abuse in connection with the sale of futures and options commodity and financial futures markets and encourage and open, competitive opportunities and economic fast”.
A striking or professional looking website does not guarantee that the broker is a member of the NFA or CFTC under the Regulation. A broker who is a member of the National Futures Association and is subject to the rules of the CFTC declare this and NFA membership number on your website, usually in the “about us” and each web page. Each country outside the United States has its own regulatory body. Because of potential safety concerns deposits and integrity of the corridor accounts should be only be open to companies properly regulated.
2. Account Details
Each Forex broker has several offers on the account, including:
Leverage and Margin: Forex participants have access to a wide range of amounts of leverage depending on the broker, such as 50: 1 or 200: 1 leverage is extended to holders of margin accounts by their broker loans. For example, with a leverage of 50: 1, a trader with an account size of $ 1,000 to maintain a position that is valued at $ 50,000. Leverage works for a trader to win positions because the profit potential has been greatly improved. Gearing can quickly destroy a merchant account because the potential losses are also magnified. Gearing should be used with caution. (For more information, see Forex Leverage: a double-edged sword and increases the impact of your forex trading.)
Commissions and Spreads: A broker makes money through commissions and spreads. A broker may charge commissions that use a certain percentage of the spread, the difference between the buying price and selling currency pairs. Many brokers advertise, however, that do not charge commissions, but instead make their money with wider spreads. For example, the spread be a fixed spread of three cores (one pip is the smallest unit of price change in forex) or spread can be variable depending on market volatility. A EUR / USD at 1.3943 Quote – 1.3946 has a three pip spread. This means that as soon as a market participant buys 1.3946, the position has already lost three cores value which could only be sold without delay to 1.3943. The wider the spread, the harder it can be to make a profit. The most popular trading pairs, such as EUR / USD and GBP / USD typically have more fine traded peers tighter spreads.
Initial deposit: Most forex accounts can be funded with a very small initial deposits, even as low as $ 50, with leverage, of course, the purchasing power is much greater than the minimum deposit, which is one reason why currency trading is attractive to new companies and investors. Many brokers offer standard accounts, mini and micro with different initial claim deposit.
Easy Deposits and withdrawals: Each Forex broker has specific retirement accounts and financing policy. Runners may allow account holders to fund online accounts with a credit card payment via ACH or via PayPal or bank transfer, bank check or personal or business check. Payments can be made typically by check or bank transfer. The broker may charge a fee for any of the two services.
3. currency pairs offered
While there is a lot of coins available for trading, just get the most attention, and therefore act with greater liquidity. The “oldest” is the Japanese dollar / Japanese Yen (USD / JPY), Euro / US Dollar (EUR / USD), Swiss American / franc dollar (USD / CHF) and pound / dollar US (GBP / USD). A broker can offer a huge range of currency pairs, but most important is that they offer the pair (s) where the trader or investor is interested. (For more information on the major pairs, see our tutorial on Forex.)
4. Customer Service
Currency trading is done 24 hours a day, so the customer support from a broker should be available at any time. Another consideration is the ease with which you can talk to a live person, rather than a time-consuming and often frustrating, auto attendant. When considering a corridor, a quick call to give you an idea of the kind of customer service they provide, timeouts and the ability of the representative to answer questions concisely on spreads, leverage, regulations and company information. These details include how long they have been a forex broker and the size of its trade volume (usually larger brokers have access to better prices and execution).
5. Trading Platform
The trading platform is the gateway to the markets investor. As such, traders should ensure that the platform and the software is easy to use, visually appealing, you have a number of technical analysis tools and / or fundamentals, and that traffickers can come and go easily. This last point is particularly important: A well-designed trading platform will clear buttons “buy” and “sell”, and some even have a button “panic” that closes all open positions. A poorly designed interface, on the other hand could lead to costly mistakes order entry, for example accidentally add something to a position which closes it, or go short when you meant to go far. (For more information, see What should I look for when choosing a forex trading platform?)
Other considerations include customization options, types of order entry, automated options trading strategies builders, backtesting and trading reports. Most brokers offer free demo that traders can test the trading platform before you open and fund an account.
The bottom line
If you trust your forex broker, you can spend more time and attention on analyzing and developing strategies currency. A little research before committing to a runner goes a long way, and can increase the chances of a successful investor in the competitive Forex market. (For related reading, also take a look at the top 10 rules for successful trading.)