7 Ways To Compare Forex Brokers
The foreign exchange market is a competitive one; you are not battling against others, but against price action. There are a lot of things that need to be taken into consideration when trading, but before you start, you need to compare Forex Brokers to ensure that you are one step ahead.
Here are 7 of the best ways to make a judgment on the best setup for you as an individual.
Location, Location, Location
When choosing, make sure they provide you with plenty of information, rather than going with the one that offers the best spread. If you choose based on the best deal and nothing else, you are likely to get scammed.
If a company is based offshore, then it will be extremely difficult to get hold of your cash!
Rules and regulations
When you compare Forex Brokers, make sure you do all the necessary research. They should all be regulated by the associated body in their home country. A company residing in the UK should be regulated by the FSA, where as the FCM is the regulator for US based companies.
Types of account
There are hundreds of different accounts out there, so make sure you pick the right one for you. There are micro accounts starting from $10, mini accounts from $300, standard accounts from $2,000 and of course, there are corporate accounts.
Leverage amount
Different Foreign Exchange companies will offer their clients different leverage ratios. A lot of companies start with 100:1, although many companies will offer anything to 400:1. That means you could be leveraging $400 for every $1 you have in your account.
Size of Spread
When you come to compare Forex Brokers, always look at the spread size. The size of the spread is essentially your cost, so the higher it is, the more it will dip into your profits.
Trading Platform
The software used by a broker is essentially the trading platform. Each trading platform will offer a range of different features, so get to know a few different pieces of software to determine what features you really want a need to become successful.
Types and quality of support
The foreign exchange market does not operate on weekends, but 24 hours a day, 5 days a week.
This means you are likely to put in a lot of trades, so it is inevitable that something will go wrong. When something does go wrong, you need to contact support, so compare Forex Brokers based on the quality of their support systems.