Looking For A Forex Broker
Posted at by ifydcat on category UncategorizedOf all the financial markets that you can trade, the currency market probably has the most market participants. Banks, finance houses, governments, reserve banks, and individual traders all comprise the market ? pumping through trillions of US Dollars each and every day.
To cater for the individual traders, Foreign exchange brokers offers a varying range of service, products, and trading platform, as well as a varying range of services and fees to each trader. If trading was not hard enough? Choosing the right broker is just another daunting task facing the newbie trader.
So how do you do it? Should you go with the broker offering a 1 pip spread, or another with a 2 pip spread and a free charting application?
Assessing Each Broker
The main thing to note when choosing the right Fx broker is that each one is different. Many of them look like they are offering the same commissions and fees, software platforms and news services, however ultimately? No two brokers are the same.
When you compare brokers, it is prudent to judge them on the following things:
* Price, commission, spreads, overnight interest.
* Services offered, included software, trading platform.
* News, analysis, members only content.
* Reputation, reliability, slippage policy.
Each one of these things will no doubt hold a different weighting for each client. For instance, someone who does Currency trading as a part time profession (or on the side) will probably not be too worried about slippage (the difference between a quoted price and an executed price).
However, for someone who trades from home all day, and who needs exact entry prices to be executed at the same level that they are quoted ? the slippage policy will be a huge focus.
Minimizing Your Trading Costs
Obviously, the goal of any successful trader is to make as much money from Forex as is humanely possible. To do this? part of the equation is to minimize costs.
Usually, brokers don’t charge you for each trade you place, like a stock brokerage firm would. For instance? You will not have to pay $9.95 for every buy and sell order which is filled.
Instead, brokers in the Forex industry charge a “spread”? which is the difference between the bid and ask prices at any one time. Therefore, if you are looking specifically to lower your trading costs, finding a Fx broker with the lowest “spreads” will definitely be your key objective.
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