How To Select A Forex Broker

By Glenn R. Grundberg

There are a few factors to be considered prior to choosing a forex broker. You can use the shopping list below to help you compare and rate various brokers. There are also numerous forex broker review websites that you can use to find out what different peoples' opinions of individual forex brokers are.

1. Word Of Mouth
 
Of course one of the  safest ways to judge if a forex broker is going to work for you is to find out what others' experiences with the agent were like. Friends and relatives may have a lot of input about their experiences with online trade, and to ascertain the opinions of a significant crowd you may refer to online broker review sites.
By sussing out what others have had to say about their experiences with particular brokers you'll have a better idea about overall customer benefit and support turnaround time. After all, you want to deal with a broker that is going to be handy to answer questions and a company that is going to proffer the best and most timely data.

2. Safety Of Funds

Find out if client funds are insured. If so, by what means are they insured? In the foreign trading sector many brokers will tell clients that their resources are secured by this or that means of backup investments. It's good to comprehend the details before having thousands of dollars entangled in a broker's backup investments.

3. Execution

Find out what a prospective forex broker employs in the way of business models. For instance, are they more of an electronic announcement network or market maker? Does the broker offer automatic execution for trades? If not, how fast is order performance on average? Do they offset client trades? How much can you trade without requesting a quote? These are all good questions to ask a prospective agent.

4. Trading Platforms

It can be paramount for a trade system to be able to handle high volume during a fast moving market. Though a stated platform may run sufficiently on normal days, you're not going to know for certain how it performs on fast days until you see it in motion. Have this in mind while choosing a broker and platform.
Find out how many currency pairs you can trade. Learn about the platforms various features, such as one click trade, mobile trade and the like.

5. Account Size

Find out what the minimum trade magnitude is, as well as whether or not you can correct the standard lot traded. Of course a broker's minimum account opening balance may play an important part in your decision as well. Another thing you may wish to inquire about is whether or not surplus equity will earn interest.

6. Spread

Is a potential broker's spread fluctuating or fixed? How tight is the spread? Is the spread larger for small accounts?

7. Slippage

Find out how much slippage can be probable in both fast and normal moving markets?
8. Commissions

Does the broker charge commissions or are they built into the spread as with most market makers?

9. Margin

Find out what your broker's margin requirement is. Is the margin requirement the same for standard and mini accounts? Does the margin requirement change for different currency groups or days of the week?

10. Rollover Policy

Find out if there are additional conditions or requirements on earning rollover interest. Is there a minimum margin requirement so that you can earn interest on overnight positions?