Choosing a Forex Broker

Choosing a Forex Broker is one of the most important steps in making money with Forex.

There are may things to consider but below are the most important factors to picking the right 4x broker.

The Initial Deposit

How much can you afford to start with is huge. Depending on the broker, initial deposits can be anywhere from a few hundred to a few thousand. If you are just starting out, you want to deposit the least you can with a reputable broker.  If a broker requires a large sum of money just to start, you should question it and maybe keep looking for one that does not.  Normally, a few hundred dollars should be a sufficient deposit to get going.

Relations and Customer Service

This is huge! You need to be able to get a hold of your Forex broker quickly and easily. Remember that the Forex market is a 24 hour market and as so, customer service should be available to help you with your problems. Test their call centers. Make sure the people they have on the phone are knowledgeable and helpful. Keep calling and asking questions until you are satisfied that you are comfortable with the company handling YOUR money.

Make Sure They are Regulated

Yes, we know there is no central agency in Forex, however, that does not meen they are not regulated. In the U.S. Forex brokers are registerd under the Commodity Futures Trading Commission as a Futeres Commission Merchant. They are also members of the National Futures Assoc. Most reputable brokers will be listed in the National Futures Association (NFA). To check if your broker is listed, simply, go to the site NFA web site and make sure your broker is listed and has a good track record with them.

Forex Trading Platform

The trading platform is the computer programs that the broker has created and uses to facilitate the trades and do the reporting for customers. The Forex broker you choose must have a platform that is easy to use and understand. If you have never used the Forex platform supplied by your fx broker, then create a Forex demo account to test it out before commiting in cash.

Currency traded

If you have specific requirements for the currency you want to trade, make sure the broker offers it. What you want to do is find a broker that has a large variety of currency traded so your options are always open and you have the best opportunity to make money.

What others say

Take a look at what other traders are saying about the broker you are thinking of using. Do your homework and check their reputation. You are the customer and customer satisfaction should be a should be a key point of interest in your research of Forex brokers.

The Flow of the Forex Market

The Foreign Exchange Market is open as long as there are banks open in one of the major markets. Since the major markets are spread out accross the planet, you can pretty much trade currency 24 hours a day for most of the week. More specifically from Sunday night Eastern time to Friday night Eastern.

Money in the FX market flows between parties as so…

The Big Boys of Currency Trading: The large banks that trade with each other and other large entities they choose to trade with. Those are large volume trades and not open to the public directly. Unlike other markets, the 4x market has no central body or exchange. Banks form their own relationships with market makers and their quotes may not be easily accessible to the public. The banks use a brokerage system, EBS (Electronic Brokerage System) to make their quotes available to each other only.

The Little Guys: Individuals, retailers, institutions and businesses around the globe do not trade directly with the large banks nor are the quotes from the EBS directly available to them. On their own they do not have the volume needed to interest them.

Come the middle man: As with most business dealings, there is a middle man in the FX Market, companies that developed relationships with the commercial banks and have access to the EBS. These markets pool together trades from many to create the volume needed to trade with the banks. The more volume they can pool together the more banks may trade with them. Most of thesemarkets accessible to the public are available online and do most of their business through their website applications.

Because there is a lack of centralization, it is possible to get different quotes and trade the same currency at a different price at the same time. For that reason, you want to be able to make sure that the broker you are using is established enough and large enough to get you the best rates out of the big banks.