Choose a good forex broker

How to choose a good forex broker. With so many online brokers these days, choosing between them is like choosing an insurance agent: there’s a lot to see, but sometimes it just depends on who you like.

All online brokers in the United States are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Of course, other governments also have their own regulatory bodies.

If you’re considering working with a broker from another country, check their rules and make sure they’re on an uptrend. Computer security has come a long way in recent years and any reputable broker offers the highest possible service, so this shouldn’t be a deciding factor.

Most brokers offer standard and mini forex trading accounts. Some even offer micro accounts (one-tenth the size of a mini account) to allow novice traders to learn without breaking their budget and to feel at ease in the sense of actually making and losing money. So neither one has much choice.

But beware of hidden fees. The best brokers make money from trading spreads and charge a small overnight renewal fee for trades that last longer than a certain time. Some others will do everything they can to charge fees, including an online live feed of the latest charts and quotes, or withdrawals and deposits, or monthly maintenance fees.

Are their spreads competitive? Three to five is the US average; more like a road robbery. Are their spreads fixed or do they fluctuate with the time of day or the amount in your account? Are your trades executed at the stated price or have some slippage?

Knowledge is definitely power in this game. So do they offer training or do you sink or swim alone? Does their free training just teach you how to run their software, or does it cover in-depth topics like basics and technical analysis? Do they have a library of online resources that you can learn from, and similar articles that teach you how to trade?

Do they provide tools to help you analyze the market? These may include a calendar of announcements with dates for different countries to release their economic statistics (unemployment rates, interest rates rising or falling, trade data, etc.). Is their charting service accurate to the second, or is there a potentially fatal delay when scalping? Can you analyze support and resistance points and easily calculate Fibonacci retracements?

The best online brokers offer advanced trading tools. These include trailing stops, which follow the price up or down to lock in your profits. The other is hedging, where you can place two pending orders, one long and one short, for the same currency pair, to take advantage of any direction the market moves; many brokers only accept one trade per currency pair, making a second trade will Cancel the first transaction.

In the end, it’s a small thing, but how convenient is it to fund your account or withdraw profits? Can you link your trading account to your bank or online payment service like Paypal? You will work with a good broker for many years.

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