More recently, more and more people regard transactions as forms of investment and business forms. Forex trading or foreign exchange trading is rapidly becoming one of the most popular forms of investment transactions today.
With a minimum start-up capital requirement, the threshold for entry is quite low, which makes it easier for people in the street to start trading the foreign exchange market.
However, unless you are a bank or a large financial institution, you will need broker services to trade currencies.
Fortunately, with the increase in demand for foreign exchange trading, the number of foreign exchange brokers has also increased accordingly.
However, with so many brokers to choose from, the problem most potential foreign exchange traders face is not how to trade, but how to choose a reliable broker to begin trading.
Unfortunately, not all market brokers are the same. You will need to find a suitable broker to meet your specific needs as a trader.
From an experience point of view, this may prove to be a tricky part because not all agents provide the same services or have the same fees and policies. Differences in fees, such as spreads, can have a major impact on your profits. Bottom line.
Seriously, if you want to make a living as a Forex trader, you need to focus on the market without worrying about the brokers in trouble. Therefore, choosing a reliable forex broker should be one of the first tasks you need to do before you start trading.
In fact, there are several factors that can make Forex brokers better. Here are my top ten recommendations for choosing a good currency trading broker.
1. Reputation
In this industry, reputation is very important because there are many "nightly" actions in the market. Basically, the rule of thumb is to stick with more accomplished foreign exchange brokers who have good records.
An important factor to note is that all of their business transactions must be verifiable. Do they have a legitimate office and many satisfied customers? Have they been operating for years, or did they just pop up overnight?
You can get a lot of information from unbiased review websites and discuss their experiences with brokers. If someone was torn before, you should avoid it.
Reliable brokers should be transparent in their transactions and operations. Information about how they work must be provided online so that potential traders can easily find out more about their reputation and performance.
2. Regulations
No matter which country you live in, be sure to choose a foreign exchange broker that conducts business in the country where the regulatory agency oversees its activities. A reliable foreign exchange broker must be supervised and accountable by the relevant authorities.
For example, the Swiss bank system is one of the world's most closely managed ships managed by the Swiss Federal Ministry of Finance, while the US foreign exchange dealer should be a full member of the National Futures Association (NFA) and registered as a commodity futures trading committee. (CFTC) Futures commission merchant (FCM).
In other words, they must abide by and abide by industry rules and regulations. The last thing you want is for some unregulated brokers to hold your money everywhere. If they go, I wish you good luck back to your money.
If the broker is not regulated by any monetary authority, it is better to choose another broker.
3. Differences in spreads
Unlike stockbrokers, currency exchange brokers do not charge fees or commissions, but instead earn commissions from the difference in spreads of currency pairs at the time of the transaction.
Unlike other financial markets, money markets are not traded through central exchanges, but are determined by brokers you use to determine spreads.
Most forex brokers publish real-time or delayed prices on their websites so that traders can compare spreads and some brokers can even offer variable spreads.
At first glance, due to the volatility of the foreign exchange market, the concept of variable spreads may seem tempting. When the market is calm, the spread is relatively small, but when the market really warms up, the spread may widen enough to eliminate profits.
Unfortunately, many of the brokers there are known as "betta fish shops." They do not have the greatest interest. Some people already know the advantages of changing interest rates.
Regardless of market trends, the bottom line here is still finding forex brokers with fixed and low spreads.
4. Execution speed
In my book, this is something that most novice traders pay little attention to when registering trading accounts.
Most brokers do publish real-time prices on their trading platforms, but the problem here is that once you click the "buy" or "sell" button, they can execute orders quickly.
The speed of execution of orders is essential, especially if you are a gold holder who trades a 5-minute chart, it is not possible to sit down and wait for another 5 minutes just to confirm that the order is correct?
Fortunately, the best solution to this problem is to open a demo account with a broker and give them a test drive. This will allow you to test the execution speed of their trading platform.
5. Minimum trading account size
Now, the leverage of brokers is getting higher and higher to cater to small retailers who have limited capital but want to trade forex.
Micro and nano accounts are available, but most brokers offer two standard types of trading account sizes, usually standard accounts and mini accounts.
The main difference between a standard account and a mini account is that the standard account transaction volume is 100,000 units, while the mini account trades only one-tenth of that size, or 10,000 units per unit transaction.
In other words, the size of a mini account is only one tenth of that of a regular account. This allows you to take one-tenth of the risk in your regular account.
6. Margin and Leverage
Margin is the basis of the Forex Trading Framework, so make sure that you fully understand the broker's margin terms, and then the last thing you want to hear before you open a live trading account The broker added margin.
Make sure that you fully understand how your broker calculates margin requirements and changes according to the currency pair of the transaction? Is it fixed or variable at different times of the day or week?
Please note that some brokers offer different margin requirements for standard accounts and mini accounts, so be careful.
When it comes to leverage, most traders are familiar with the 1:100 ratio, but they do know that some currency trading brokers can now even provide up to 1:400 leverage.
If you have a caution, it is a novice trader. Do not use too much leverage, because this is one of the key reasons why many novice traders are eliminated so quickly. Remember that the key to winning the forex game is to increase small, sustained profits.
7. Rolling Interest Rate
Rolling interest rate is the cost incurred when a trader moves a position to the next trading day.
If you are a cattle trader or a day trader, this interest rate may not affect your trading account, but if you are a swing trader or long-term trader, if you do not know this seemingly small number It may turn into snowballs.
This is why it is important to find out how to earn a minimum margin requirement on an overnight position. This is just a 0.5% or a staggering 2% to do math.
8. Trading platform
A good trading platform should not only show real-time real-time prices for traders who can "buy" or "sell," but should also display many other features, such as charts and technical analysis tools.
Some platforms even offer more advanced features such as trailing stops, mobile transactions, and even automated trading software called expert advisors.
Most brokers will have their own proprietary trading platforms, but many brokers use the Metatrader 4 platform because it is a fairly easy-to-use system that can cater to traders at all levels from novice to expert.
In my book, the type of trading platform used can make Forex trading easy or really troublesome, so make sure you learn about the platform by signing up for a demo account.
9. Technical support
Typically, support types come in the form of phone or email support, and even in some cases "live chat."
Since the foreign exchange market is a global 24-hour trading market, the corresponding support provided by brokers should also be 24 hours a day.
Remember, the afternoon may be 3pm, but it may also be 3am, another trader in the world, so please make sure the broker's office is picked up. If something goes wrong, please call.
An important aspect of support must be high-profile, that is, be able to shut off the "open" position on the phone in the unfortunate event of a computer pause or Internet connection failure, and beware if Murphy's law begins.
10. Additional value-added services
The vast majority of better foreign exchange brokers offer free webinars, technical tools, e-books, articles and even daily market analysis and updated content consultants.
This may come in handy if you are the type of trader for trading fundamentals.
Well, when looking for a reliable Forex broker, this is my 2 cents and I hope it will provide you with enough information to help you get a good start in all forex trading.
There is a safe and profitable trading day.
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Orignal From: Top Ten Tips for Choosing a Reliable Forex Trading Broker
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